Wasn’t the UK due to join the Euro (or at least, they were part of the European Exchange Rate Mechanism) until George Soros screwed things up by breaking the Bank of England? If so, I find that… ironic.
Having your currency depreciate is kind of the advantage of being out of the Euro in a recession.
Not exactly, no. It was on the cards from the middle part of the Blair government in a ‘we’ll probably join at some point but that time is not yet’ kind of way. There was talk of a referendum but it was fairly clear to most people that this would fail so it never went anywhere. The red-top tabloids and the right-wing press in Britain are very euro-sceptic and fiercely opposed to monetary union. The only EU news that really gets reported in Britain are scandals, corruption stories and breathless pieces about how bureaucrats in Brussels want to poison your pets and molest your children. As a result popular opinion in the UK is very much against joining the Euro even though most people don’t really understand the actual pros or cons of such a move, it’s just out of reflexive anti-EU sentiment.
Well, it’s official: we are going to formally request that the EU step in and save us from the gobshites who’ve run this once proud nation into the ground over the past 5 years.
I’m affraid that the intention is to prop up the gobshites and make you pay for it.
I don’t know, I’d be amazed if this shower of gombeens are still in power six months from now. Utterly amazed. The anger at all of this is palpable. Broadly speaking we’re an easy-going nation and although we’ve grumbled, most of us have accepted that adjustments needed to be made in order to navigate this (international) crisis, up to now we’ve taken our medicine and I suspect we’ll continue to do so - racist nonsense aside, we’re not stupid. We know we have to take some pain to get through all of this and I’m actually fairly positive that although things will be tough and we’ll have a ridiculous level of national debt for a long time, we’re well able to stage something of a comeback.
But as time has gone by, the extent to which the nation’s banks were mismanaged, the ridiculously short-sighted way in which the government regulated said banks and the fact that the government has been unable and/or unwilling to give us straight answers about how dire the situation was and is has resulted in an electorate that is extremely angry about this whole situation.
I’ve read quite a few articles (for example) arguing that Ireland’s policy of cutting back - rather than stimulating - during the recession has led to the economy’s collapse. It seems a persuasive argument to me.
Exactly. Apart from a few unlucky ‘underlings’, the real plan is working perfectly and the leaders of the banks and banking institutions are proving the best bank robbers compared to anyone/anything you’ll see on a heist movie.
So which country next? Portugal? Spain? Can you hear the chink of your money as it rolls away and disappears into the magical financial black hole? Some people are cleaning up big time. The wonders of deregulation at work.
Hari is shockingly dishonest in that article. He claims Ireland has collapsed as a result of its spending cuts, and that is very hard to argue based on the facts.
Ireland announced its spending cuts in December 2009. Before that its economy was in free fall, unemployment rose from 5 to 13%. It stayed at around 13% all year after the cuts. Before the cuts GDP growth fell almost 8%. This year Ireland came out of recession with two quarters of positive growth.
How can you argue that the cuts have been the cause of Ireland’s problems based on those facts?
The truth is that Ireland was already screwed. Even before the cuts, Krugman, whom Hari obviously idolises, said exactly that: “As far as responding to the recession goes, Ireland appears to be really, truly without options, other than to hope for an export-led recovery, if and when the rest of the world bounces back.”
Whether or not the cuts will hurt or help Ireland in the long run is too early to tell. Anyone claiming otherwise, especially with comparisons of Ireland with China (wtf?), is being dishonest.
The latest buzz going around the various Irish forums I post on is that we should have let the banks (or Anglo-Irish at the very least) collapse. And that the investers in the banks should be forced to take the hit.
And that’s something I have no idea how to even contemplate, let alone address. Is anyone here up to speed with these ideas? It’s very hard to find reasoned debate in European based places at the moment.
Wonder if that attitude will persist when it turns out that a lot of the investors expected to take the hit are Pension funds. If saving the bank means everyone loses x% off the value of their pension is it now time for the government to step in and prevent it or do people still have the courage of their convictions to “punish” the fat cat bankers (and the thousands of ordinary staff on ordinary salaries)?
Do think it’s an interesting question though, what actually are the implications of letting a sizeable bank just go under?
Robert Peston, of the BBC has some detailed thoughts on the issue, including - almost as an aside - an assertion that Anglo Irish is going to be wound up.
The bank most conspicuously in need of additional financial support is Allied Irish Banks. Of course, Anglo Irish Banks is weaker, but the government already put it on a path to being wound up. What’s less clear is whether Bank of Ireland will become largely nationalised in this new round of reinforcing the Irish financial sector.
Did you guys forget about Lehman Brothers and 2008 America?
Aye. Supposedly we’d take a 25% hit, and possibly 40% hit on our investments were they left collapse at this point. The thing is people are saying we should have left it collapse in 2008, when the Irish investment would have been low as they were moved when the banks lost AAA ratings. It has since taken parliamentary votes to put the Pension Reserve Fund into the banks.
Do think it’s an interesting question though, what actually are the implications of letting a sizeable bank just go under?
As for the Lehman brothers aspect, Ireland is far more reliant on the few banks we have. I’d imagine they take up a greater percentage of involvement in the economy than Lehmen brothers did in the American economy.
Exactly. I certainly understand the desire to punish bankers, but just letting the banks fail isn’t a serious option.
Based on the US experience, prop 'em up, but with very explicit rules about getting paid back, since they’ll be making money hand over fist within a year. Then actually regulate them so they can’t play casino with their money, and you’re in good shape.
H.
I’m 99% certain that that’s not just a baseless assertion - AFAIK the government has put the wheels in motion and over the next ten years the bank will be wound up.
Not forget per se, but I was under the impression that Lehman Brothers was largely an investment bank with relatively insignificant retail banking assets compared to, say, Northern Rock over here which I’d suggest would be a much closer parallel.
Once the news starts covering little old ladies queuing outside branches to try and get their savings out, which was the point the government was pretty much forced to step in and nationalise Northern Rock, will there still be the appetite to just sit back and let it go under?
I certainly remember watching employees pretty much strip the Lehman Brothers building, but I don’t recall stories of people queueing outside Lehman branches trying to get to their savings.
One of the tv stations here is reporting (on a rumour) that the Taoiseach will go to the President tonight and call a snap election.
Aye, thanks from Germany. With the loans Ireland will receive, German/GB/etc banks high risks investments and the banks them self are safe again.
Brought to you by the Irish taxpayer that will endure cut backs on all fronts to pay back the credits for decades or until the system finally collapses.
So which country next? Portugal? Spain? Can you hear the chink of your money as it rolls away and disappears into the magical financial black hole? Some people are cleaning up big time. The wonders of deregulation at work.
Portugal.
I’m wondering which country will stand up first to stop this financial aggression and let their banks die, because they are dead already.