New euro 'empire' plot by Brussels

[itsnotoutthere]

...Yes, because that was totally my question.*snorts and rolls eyes*

If the British want out, then they should be allowed too. Howeve,r if they want to stay. Would you and yours agree that it was the will of the people?

Of course. But just being given the option would be nice.

[itsnotoutthere]

Lets do to our elected representatives (tossers) what the E.U. did to Ireland. And keep asking until we get the answer we want.

link:- https://submissions.epetitions.direct.gov.uk/petitions/20133

[Blackwhite]

The sad reality is that Britain is fiscally in about the same boat as Ireland (marginally better by about €2000 per capita), so it hasn't done so well outside of the Eurozone.

Britain is not in the same boat as Ireland. For a start, Britain, unlike the Eurozone members (including Ireland) has the advantage that it is not in the Eurozone and can therefore set its interest rates to suit its economy rather than Germany's. Ireland doesn't have that advantage. That's just one of the tools that the British have to fix their economy which the Irish and other Eurozone members don't have.

Britain is not Ireland, so stop using this false comparison

By Jeremy Warner

October 1st, 2010

The Telegraph

The Anglo-Irish bank has been bailed out to the tune of 30 billion euros. Pic: PA

There they go again. Diane Abbott, the London MP with a love of expense account taxis rides, represented the standard Labour view on BBC's Question Time last night when she cited Ireland as an example of what Britain might become under the Coalition's spending cuts. Instead, she wants to carry on spending until…... well this question is never answered but I guess it is until the markets call a halt. Quite what happens after that scarcely bears thinking about.

This is not an entirely indefensible position. It's held by most left leaning people and would undoubtedly still be the Liberal Democrat view had they not jumped into bed with David Cameron and George Osborne. It's got plenty of support in the media too, and I'm not referring just to left wing polemicists such as The Independent's know-it-all Johann Hari, now apparently an expert on economics along with everything else.

Martin Wolf, chief economic commentator for the Financial Times and not obviously a card carrying member of the Third International, puts the argument as well as any in a column for this morning's edition. Then of course there is Paul Krugman, Nobel prize winner and the self styled "conscience of Liberal America". Krugman's strategy appears to be to bore us all into submission, for his prodigious outpouring of blogs for the New York Times see the entire world through the prism of this debate.

It's a shame really, but he has virtually nothing to say about anything else. If aliens landed from Mars, he'd find a way of explaining it as a "conservative" plot to slash the deficit and destroy the economy. Like Ms Abbott, he wants more spending, not less, and sod what it does to the deficit in the short term.

On this argument, as on so many others when it comes to economics, you pays your money and you takes your choice. Everyone agrees that eventually the defict has to be tackled; the dispute is instead about how quickly this is done, and in particular whether by front end loading the medicine, before the economy has properly recovered, you end up undermining growth and therefore doing more harm than good. The Krugman argument is classic Keynesianism – that if you spend your way back to growth the deficit will eventually take care of itself.

So what's the answer; does fiscal consolidation undermine growth, or as George Osborne, the UK Chancellor, would argue, support it? A simple question perhaps, but one to which there is no conclusive answer. The IMF takes a stab at it in one of the pre-released chapters to next week's World Economic Outlook. You won't be surprised to learn that – er – it completely fails to provide a convincing answer one way or the other.

Yes, concludes the IMF, fiscal retrenchment typically has contractionary effects in the short term, with lower output and higher unemployment than otherwise. Well there's a surprise. But in the long term, there are benefits. “In particular, lower debt is likely to reduce real interest rates and the burden of interest payments, allowing for future cuts to distortionary taxes,” the authors say. "By boosting private investment, this increases output in the long term".

The IMF is quite precise about this analysis. Within two years of cutting the budget deficit by 1 percent of GDP, domestic demand—consumption and investment—is about 1 percent lower, according to the authors, and the unemployment rate is about ⅓ percentage point higher. Because net exports––exports minus imports––tend to rise when budget deficits are cut, the overall impact on GDP is a decline of ½ percent.

What's more, in today's climate, fiscal consolidation will have more negatitive impacts than normal, the IMF says. This is not just because when all advanced economies are trying to consolidate at the same time it becomes a lot more difficult to find sources of growth, but also because in many economies central banks – and this is the crucial point – can only provide limited monetary stimulus to counteract the fiscal tightening.

On the face of it, Ireland seems to support the case for slower consolidation. As I explained in a long read on the Irish meltdown for this morning's print edition of The Daily Telegraph, Ireland went the masochistic route to economic correction and was one of the first to attempt to address its problems with draconian public sector spending cuts. Yet it all seems to have been in vain. Far from being rewarded with higher growth, the economy is once more contracting, the banks have required yet another bailout, and the deficit is continuing to widen. Ireland seems stuck in a vicious cycle of economic decline, where paradoxically, attempting to cut the deficit only makes it even worse.

Is this not the fate that now awaits Britain? Fortunately, Britain is not Ireland. We didn't have quite the same loose money policies as the eurozone in the run up to the crisis, so our boom wasn't so extreme. By the same token, the UK has been able to counteract the bust with devaluation and quantitative easing, a path denied to Ireland by membership of the euro, where policy is set to suit the needs of the core German economy, not the periphery.

Comparisons with Ireland are therefore completely invalid. One member of the Bank of England's Monetary Policy Committee, Adam Posen, has this week made the case for doing even more, and engaging in another programme of quantitative easing.

Personally I think he's wrong about this. Just as Britain isn't Ireland or Greece, nor is it Japan, which is essentially Mr Posen's argument. Indeed, the assumption that Britain is going to follow Japan into a lost decade of stagnation unless more is done to stimulate growth is in many respects bizarre. Nominal GDP growth in the UK is already back at trend levels, an outcome that few thought likely a year ago.

What's more, unlike Japan, which constantly had to fight an ever firmer exchange rate, we've got a substantially devalued currency, which both boosts competitiveness and imports inflation. It's perfectly true that the Coalition must articulate a better strategy for growth than we've seen so far; simply cutting the deficit won't persuade companies to invest. But it is an essential starting point. It's leaving the deficit unaddressed that will condemn Britain to years of stagnation, not the other way around.

http://blogs.telegraph.co.uk/finance/jeremywarner/100007924/britain-is-not-ireland-so-stop-using-this-false-comparison/

Edited October 26, 2011 by Blackwhite

[Blackwhite]

However none of this changes the fact that the bulk of Britains exports go to Europe

Rubbish.

The Rotterdam Effect makes it look like Britain exports more to the EU than she actually does.

A lot of our world wide trade goes via Holland (including much of that which goes to places outside the EU), as you get very good shipping links there. But because that involves goods being moved from the UK to Holland (even though they only stay there for a few days), some pro-EU commentators use that to bulk up Britain's trade figures with the EU and make it look like there’s more genuine trade with the EU than there really is.

All Trade passing through Rotterdam and Antwerp is included in the United Kingdom Balance of Payments data and will be shown against the Netherlands and Belgium, respectively, where they are the originating country of dispatch (for UK imports) and/or the country of ultimate destination (for UK exports).

Complications can occur in EU trade when dealing with the "Rotterdam Effect". Some goods might be declared at an earlier than (final) country of dispatch and/or destination. Principally, the "Rotterdam Effect" causes imports and exports to be attributed to the country of transit as opposed to the "real" partner country.

http://yourfreedomandours.blogspot.com/2011/09/trade-and-rotterdam-effect.html

Or, in other words, we are given erroneous figures about trade with at least two other member states of the EU and the Single Market because the the imports and exports are attributed to the countries of transit (Holland and Belgium) as opposed to the real partner country, the country, often outside the EU, that those exports are actually going to.

Edited October 26, 2011 by Blackwhite

[Blackwhite]

Interesting. I didn't know that, thanks QM. You learn something new every day*smiles*

It's just a pity that much of what he wrote in that post was factually incorrect.

I'm still waiting for his proof that the vast majority of Scots support being in the EU.

Unfortunately, I cannot find the results of a poll which showed that the Scots are actually more anti-EU than the English are. As soon as I find it, though, I'll post it here.

Edited October 26, 2011 by Blackwhite

[questionmark]

Lets do to our elected representatives (tossers) what the E.U. did to Ireland. And keep asking until we get the answer we want.

link:- https://submissions....petitions/20133

So sad that they did something to Ireland that Britain could not on its own and Greece could not even with help:

Ireland Recovers as Greece Sinks in Debt Market Affirming Kenny’s Policies

[snip]

Market Reward

Irish bonds with a duration of more than a year returned 17.4 percent in dollar terms since June 17, the most of the 26 government debt markets tracked in indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies.

The yield on Irish two-year government bonds was 9.38 percent yesterday, down from an all-time high of 23.2 percent on July 18. Greek bonds plummeted, with the two-year yield more than doubling to a record 76.73 percent in the same period. It was down to 61.4 percent yesterday.

They got the same help with the request to put their house in order, looks like they are doing just that, at the same time the British government yield gone up. Does not seem too horrible after running the country into the ground a few years ago.

[Guest]

Some British figures;

Over 40% of exports are to Europe.

Debt is 76.5% of GDP.

Unemployment is 8.1%

Total foreign debt is £8.9 trillion

Inflation 5.1% and rising

A great track record for British finacial self governance.

You still cannot get away from the fact that exports would drop precipitously if the UK pulled out of Europe.

And devaluing your way out of a crisis is not such a terribly good idea when you rely so heavily on imports - it leads to domestic inflation which is exactly what you have got.

Br Cornelius

Edited October 26, 2011 by Guest

[questionmark]

It's just a pity that much of what he wrote in that post was factually incorrect.

I'm still waiting for his proof that the vast majority of Scots support being in the EU.

Unfortunately, I cannot find the results of a poll which showed that the Scots are actually more anti-EU than the English are. As soon as I find it, though, I'll post it here.

Must be because you are finding the recent poll I posted for the third time recently (*by your challenge) where Scots favor remaining in the EU... which you claim is not relevant.

Edit: But let me quote for you an anti-EU webpage:

"OPINION POLLS SUGGEST THAT SCOTS DO NOT SEE EUROPE AS AN ISSUE."

Europe is not the issue. The issue is the European Union and government by the European Union. If Scots believe that is not an issue then they are saying that government is not an issue; or democracy, or money, or jobs or diversity.

Many Scots are concerned about the European Union. They need to translate that concern into voting for a Party which is standing up and saying that we must get out of the EU and get back into the world again.

Read more

(snicker)

Edited October 26, 2011 by questionmark

[GreatFenris]

It's just a pity that much of what he wrote in that post was factually incorrect.

I'm still waiting for his proof that the vast majority of Scots support being in the EU.

Unfortunately, I cannot find the results of a poll which showed that the Scots are actually more anti-EU than the English are. As soon as I find it, though, I'll post it here.

I'd rather take his word over yours. Especially with his last post.

Of course. But just being given the option would be nice.

Ah, of course you should be allowed to leave if you want. But a referendum or such would be needed first, yes?

Now, question to BW and Its: What do you think will happen when you step out of the EU? A new British Empire? Or will the US just use you as a puppet state in Europe? Is getting out of the EU the only important thing, rather than what lies ahead?

[itsnotoutthere]

Some British figures;

Over 40% of exports are to Europe.

Debt is 76.5% of GDP.

Unemployment is 8.1%

Total foreign debt is £8.9 trillion

Inflation 5.1% and rising

A great track record for British finacial self governance.

You still cannot get away from the fact that exports would drop precipitously if the UK pulled out of Europe.

And devaluing your way out of a crisis is not such a terribly good idea when you rely so heavily on imports - it leads to domestic inflation which is exactly what you have got.

Br Cornelius

Ireland’s financial disaster shared some things with Iceland’s. It was created by the sort of men who ignore their wives’ suggestions that maybe they should stop and ask for directions, for instance. But while Icelandic males used foreign money to conquer foreign places—trophy companies in Britain, chunks of Scandinavia—the Irish male used foreign money to conquer Ireland. Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do with it was to buy Ireland. From one another. An Irish economist named Morgan Kelly, whose estimates of Irish bank losses have been the most prescient, made a back-of-the-envelope calculation that puts the losses of all Irish banks at roughly 106 billion euros. (Think $10 trillion.) At the rate money currently flows into the Irish treasury, Irish bank losses alone would absorb every penny of Irish taxes for at least the next three years.

In recognition of the spectacular losses, the entire Irish economy has almost dutifully collapsed. When you fly into Dublin you are traveling, for the first time in 15 years, against the traffic. The Irish are once again leaving Ireland, along with hordes of migrant workers. In late 2006, the unemployment rate stood at a bit more than 4 percent; now it’s 14 percent and climbing toward rates not experienced since the mid-1980s. Just a few years ago, Ireland was able to borrow money more cheaply than Germany; now, if it can borrow at all, it will be charged interest rates nearly 6 percent higher than Germany, another echo of a distant past. The Irish budget deficit—which three years ago was a surplus—is now 32 percent of its G.D.P., the highest by far in the history of the Eurozone. One credit-analysis firm has judged Ireland the third-most-likely country to default. Not quite as risky for the global investor as Venezuela, but riskier than Iraq. Distinctly Third World, in any case.

Edited October 26, 2011 by itsnotoutthere

[Guest]

Ireland’s financial disaster shared some things with Iceland’s. It was created by the sort of men who ignore their wives’ suggestions that maybe they should stop and ask for directions, for instance. But while Icelandic males used foreign money to conquer foreign places—trophy companies in Britain, chunks of Scandinavia—the Irish male used foreign money to conquer Ireland. Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do with it was to buy Ireland. From one another. An Irish economist named Morgan Kelly, whose estimates of Irish bank losses have been the most prescient, made a back-of-the-envelope calculation that puts the losses of all Irish banks at roughly 106 billion euros. (Think $10 trillion.) At the rate money currently flows into the Irish treasury, Irish bank losses alone would absorb every penny of Irish taxes for at least the next three years.

In recognition of the spectacular losses, the entire Irish economy has almost dutifully collapsed. When you fly into Dublin you are traveling, for the first time in 15 years, against the traffic. The Irish are once again leaving Ireland, along with hordes of migrant workers. In late 2006, the unemployment rate stood at a bit more than 4 percent; now it’s 14 percent and climbing toward rates not experienced since the mid-1980s. Just a few years ago, Ireland was able to borrow money more cheaply than Germany; now, if it can borrow at all, it will be charged interest rates nearly 6 percent higher than Germany, another echo of a distant past. The Irish budget deficit—which three years ago was a surplus—is now 32 percent of its G.D.P., the highest by far in the history of the Eurozone. One credit-analysis firm has judged Ireland the third-most-likely country to default. Not quite as risky for the global investor as Venezuela, but riskier than Iraq. Distinctly Third World, in any case.

So you wouldn't acknowledge that much the same thing has happened in the UK with the property bubble and buy to let speculation - with almost the same consequences for the UK as for Ireland. Northern rock was the first large mortgage dominated bank to crash in Britain and Ireland. The theres the Bank of Scotland. Things haven't as yet fully unwound in the UK, but the debt bubble you sit on will drag you down in much the same way as it has Ireland. The main significant difference is that there will be no-one capable and willing to help you out of your misfortune. Dark days ahead for us all. I know where I feel most safe though - firmly within the buffer zone of the Euro with at least some liquid countries behind me.

Br Cornelius

[itsnotoutthere]

So you wouldn't acknowledge that much the same thing has happened in the UK with the property bubble and buy to let speculation - with almost the same consequences for the UK as for Ireland. Northern rock was the first large mortgage dominated bank to crash in Britain and Ireland. The theres the Bank of Scotland. Things haven't as yet fully unwound in the UK, but the debt bubble you sit on will drag you down in much the same way as it has Ireland. The main significant difference is that there will be no-one capable and willing to help you out of your misfortune. Dark days ahead for us all. I know where I feel most safe though - firmly within the buffer zone of the Euro with at least some liquid countries behind me.

Br Cornelius

Well if you're happy to climb into bed with a loan shark be prepared to pay the consequences. Good luck.

[stevewinn]

Some British figures;

Over 40% of exports are to Europe.

Debt is 76.5% of GDP.

Unemployment is 8.1%

Total foreign debt is £8.9 trillion

Inflation 5.1% and rising

A great track record for British finacial self governance.

You still cannot get away from the fact that exports would drop precipitously if the UK pulled out of Europe.

And devaluing your way out of a crisis is not such a terribly good idea when you rely so heavily on imports - it leads to domestic inflation which is exactly what you have got.

Br Cornelius

please provide the facts and figures for each EU member, be interesting reading. dont forget links of the sources.

[questionmark]

please provide the facts and figures for each EU member, be interesting reading. dont forget links of the sources.

no problem:

https://secure.wikim...f_member_states

But this one is a better laughing matter, Ireland, despite almost going bust in the last two years had a bigger economic growth than Britain over the last 10 years:

http://epp.eurostat.ec.europa.eu/tgm/table.do;jsessionid=9ea7974b30dd8549af6fd90a4215b5a4bd09638f55ac.e34SbxiPb3uSb40Lb34LaxqRb30Ne0?tab=table&plugin=1&language=en&pcode=tsieb020

Edited October 27, 2011 by questionmark

[itsnotoutthere]

So our lovely leaders are all patting themselves on the back having "saved" the Euro and if you believe the hyperbole from the German Chancellor, saved Europe from hearing the ring of marching jackboots again.

What they have done of course is merely kick the can a bit further down the road. There's still no way even a trillion Euros can prop up the failing economies of Europe who bought into the idea you could buy prosperity with other people's money.

A couple of details behind the headlines that your average layman would most likely miss, if they could find them at all, point to what a fudge this is and which will, in all likelihood, make the problem worse. Firstly not only do the banks take a 50% hit on any Greek debt they own they are being asked to "Recapitalise" to the tune of 160 billion Euro in the next 8 months. Essentially this means the banks have to hold cash or other highly liquid asset classes on their books and they can't lend it. Get that bit, they can't lend this money. Now cast your mind back to last year and the credit crunch which was caused by, right, banks not being in a position to lend money.

The other little weasel word I spotted is that word "leverage"...

"The firepower of the main euro bailout fund - known as the European Financial Stability Facility (EFSF) - is to be boosted from the 440bn euros set up earlier this year to 1tn euros. There is about 250bn euros left available in the EFSF, which the summit statement said could be leveraged 4-5 times."

Put simply this means that this much trumpeted 1 trillion Euro is not actually there, what they are going to do is put up the 250 billion they do have (from your and my taxes) and basically borrow 4 or 5 times that amount, that's essentially what leverage means. And of course if you borrow money, you have to pay interest on it.

So they have commited us to, yet more and more borrowing. An endless cycle of debt backed up only by the promise it can be paid back through future tax revenues, that's money out of our pockets.

All Merkel and Sarkosy have done is put us and our children in hock to the Chinese for years and years.

How long will this madness go on because as sure as I have wings and a tail it's gone on too far and too deep for it all to end in sweetness and light and I fear all Merkel and friends have done is make those jackboots even more of a racing certainty.

[questionmark]

So our lovely leaders are all patting themselves on the back having "saved" the Euro and if you believe the hyperbole from the German Chancellor, saved Europe from hearing the ring of marching jackboots again.

What they have done of course is merely kick the can a bit further down the road. There's still no way even a trillion Euros can prop up the failing economies of Europe who bought into the idea you could buy prosperity with other people's money.

A couple of details behind the headlines that your average layman would most likely miss, if they could find them at all, point to what a fudge this is and which will, in all likelihood, make the problem worse. Firstly not only do the banks take a 50% hit on any Greek debt they own they are being asked to "Recapitalise" to the tune of 160 billion Euro in the next 8 months. Essentially this means the banks have to hold cash or other highly liquid asset classes on their books and they can't lend it. Get that bit, they can't lend this money. Now cast your mind back to last year and the credit crunch which was caused by, right, banks not being in a position to lend money.

The other little weasel word I spotted is that word "leverage"...

"The firepower of the main euro bailout fund - known as the European Financial Stability Facility (EFSF) - is to be boosted from the 440bn euros set up earlier this year to 1tn euros. There is about 250bn euros left available in the EFSF, which the summit statement said could be leveraged 4-5 times."

Put simply this means that this much trumpeted 1 trillion Euro is not actually there, what they are going to do is put up the 250 billion they do have (from your and my taxes) and basically borrow 4 or 5 times that amount, that's essentially what leverage means. And of course if you borrow money, you have to pay interest on it.

So they have commited us to, yet more and more borrowing. An endless cycle of debt backed up only by the promise it can be paid back through future tax revenues, that's money out of our pockets.

All Merkel and Sarkosy have done is put us and our children in hock to the Chinese for years and years.

How long will this madness go on because as sure as I have wings and a tail it's gone on too far and too deep for it all to end in sweetness and light and I fear all Merkel and friends have done is make those jackboots even more of a racing certainty.

The fact that they have leverage nw does not mean they are going to use those funds, the message to speculators are clear: if you speculate against the Euro there will be a 50% haircut in your bonds. And we have up to 1.2 trillion to make it stick. Now be good boys and pester somebody else...like Britain...

[Blackwhite]

Some British figures;

Over 40% of exports are to Europe.

Br Cornelius

The figures on UK exports to the EU are inflated due to the Rotterdam Effect, as I've already pointed out.

I've also already pointed out that the UK is NOT in the same position as Ireland (your country, I think) and Greece (Questionmark's country, I think).

Unlike both of those two nations the UK has the advantage of being OUTSIDE the Eurozone and can therefore take the necessary measures to get our economy into a much more healthy state. Many of these measures are those which the Irish and Greeks CANNOT perform due to them being inside the euro. Britain, for example, can set interest rates so that they always suit its economy. The Irish and Greeks can't do that. Ireland and Greece just have to make do with interest rates that are set by the ECB, even if they are detrimental to the Irish and Greek economies.

Come out with whatever stats you like, but Britain has the tools necessary to fix its economy that Ireland and Greece don't have.

Edited October 27, 2011 by Blackwhite

[Blackwhite]

Must be because you are finding the recent poll I posted for the third time recently (*by your challenge) where Scots favor remaining in the EU... which you claim is not relevant.

Edit: But let me quote for you an anti-EU webpage:

(snicker)

That webpage is actually an ANTI-European Union webpage which is advocating for Scotland's withdrawal from the EU.

Here is a snippet:

IF SCOTLAND STAYS IN THE EU, IT WILL LOSE ITS OIL FIELDS.

Written into the Treaties which the government has signed is a clause which will be used to claim Scotland's oil as a common resource for the entire EU. Preambles 8 and 10 of Title 2 of the Consolidated Treaty Establishing the European Community (p. 25) state that every member of the EU has "Resolved by thus pooling their resources ... to create a European Community." This will happen if the EU considers it has conditioned the people sufficiently to accept such a move.

Unless we want Scotland's oil to become Europe's oil, we need to get out of the EU, and get back into the world again.

THE EFFECT ON THE PUBLIC PURSE

Britain is a net contributor to the EU purse. We will have more money to spend on public services if we leave the EU.

Money is draining out of Scotland: Money that could be used to fund public services right here, right now. The Scottish taxpayer is subsidising the poorer economies of Europe and that situation is only going to get worse as the EU expands and brings in the even poorer economies of Eastern Europe.

The projects in Scotland which claim to be funded by the EU simply represent our own money coming back to us!

Scotland, and all of Britain, can only stand to prosper if we leave the EU.

THE EFFECT ON GOVERNMENT AND DEMOCRACY

Politically, whether at Holyrood or Westminster, Scotland will be free to develop policies in response to its own particular needs. So long as we remain members of the EU we are required to put the supposed interests of the EU as a whole before the interests of Scotland or Britain. All laws, whether at Holyrood or Westminster, are either set by Brussels, or have to be framed within the limits allowed by Brussels.

That is bad for democracy and it's bad for Scotland. Our democratically elected representatives can't properly represent our particular needs. Scotland could never have got rid of the poll tax if it had been imposed by Brussels.

And when I find the poll which shows that the Scots are more anti-EU than the English I'll post it.

Edited October 27, 2011 by Blackwhite

[Blackwhite]

But this one is a better laughing matter, Ireland, despite almost going bust in the last two years had a bigger economic growth than Britain over the last 10 years:

We realise that. And what was it that ENDED Ireland's economic boom? It was the euro.

The country was enjoying healthy growth, fuelled by investment from high-tech multinationals such as Dell, Intel and Pfizer, attracted by Ireland’s low 12.5 percent rate of corporation tax.

Then, in 1999, the Irish made the mistake of joining the euro (much of the reason for doing so was their anti-Britishness making them want to get rid of the Pound as their currency, so Ireland's current mess is causing much schadenfreude amongst the British people). So they not only adopted the euro but they also turned over their interest rates to the ECB. During Ireland's boom years the Irish could change their interest rates to suit their economy, to allow economic growth to continue.

Instead they gave that up and allowed the ECB to control their interest rates, even though the ECB always sets interest rates to suit Germany, not Ireland. So Ireland now doesn't always have interest rates which are advantageous to its economy.

And the Irish wonder why the British stereotype them as being a bit thick.

What do Battersea Power Station, Claridge's hotel, the Citigroup Tower in Canary Wharf and the Bond Street home of royal jeweller Asprey have in common? Answer: they were all bought by Irish property investors at the height of the Celtic Tiger boom.

Those were the heady days at the start of the 21st Century when the Irish loved to boast they were richer than their former masters, the British - richer even than Germany - and the Economist ran a cover story calling Ireland ‘Europe’s shining light.'

Today swaggering Ireland has gone bust. Spectacularly, dramatically, perhaps irretrievably bankrupt, suffering the deepest recession in the world.

But, tempting though it might be, Britain should not feel any sense of pleasure at Ireland’s humiliation because, as I shall explain, Ireland's crisis could well end up costing families in Britain dear.

So what went wrong? No one in Brussels will ever admit it, but it's the euro that ruined Ireland.

First the Euro-enthusiasts across the EU fostered the idea that, since all the members of eurozone shared a single currency and had promised to adhere to strict limits on debt and inflation, they were all equal in risk.

This fiction led investors to imagine lending to Greece or Ireland was no more risky than lending to Germany or the Netherlands.

So Irish banks were free to suck in billions from Asia and Europe.

These billions - many of which came from the City of London - were what fuelled Ireland’s asset bubble. ECB policy made sure the money was lent on to Irish property speculators at real interest rates that were actually negative.

So in 2007 Ireland built half as many houses as Britain, which has more than 13 times its population.

Waves of immigrants arrived from all over the world, flying in to work in the booming economy which one Irish prime minister promised could only become ‘boomier.’ For the first time since the potato famine of the 1840s, the population of Ireland began to grow.

Believing him and eager to cash in on ever-soaring property prices, the Irish began a credit binge that drove up levels of personal debt to the highest in Europe.

Meanwhile the Irish Government enjoyed a tax revenue bonanza - and responded by letting public sector pay and spending rip so that today Ireland has the highest paid public sector in Europe.

In short, joining the euro has meant almost everything that could go wrong in one country has gone wrong in Ireland.

Then in 2007, the inevitable happened and the property bubble burst. Tracts of land bought for hundreds of millions of euros for commercial development became worthless overnight. House prices crashed to half their value and are still falling.

The Irish countryside is now littered with 2,800 ‘ghost estates’ - populated with 43,000 flats and houses left empty or unfinished.

Irish banks have been destroyed by their bad loans and are insolvent. The bond markets will not lend money to the Dublin government, which is itself insolvent, driven to the edge of bankruptcy by trying to save the banks.

One economist pointed out last week the markets now put Irish sovereign debt in the same risk group as Ukraine and Pakistan.

A bail-out for Ireland now looks inevitable.

While Britain’s national deficit – the amount by which Government spending exceeds annual revenue -- is about 10 percent of national output (called GDP), Ireland’s is 32 percent, possibly the highest in the world outside Zimbabwe.

Ireland’s debt-to-GDP ratio could hit 140 percent by 2012, near the same the level at which Greece was pushed over the edge earlier this year (2010). Yet last week George Papaconstantinou, the Greek finance minister, insisted that his country was in better shape than Ireland because ‘it doesn’t have banking stability problems.’

http://synonblog.dailymail.co.uk/2010/11/first-the-potato-now-the-euro-how-ireland-has-been-destroyed-again/comments/page/2/

Edited October 27, 2011 by Blackwhite

[questionmark]

We realise that. And what was it that ENDED Ireland's economic boom? It was the euro.

The country was enjoying healthy growth, fuelled by investment from high-tech multinationals such as Dell, Intel and Pfizer, attracted by Ireland’s low 12.5 percent rate of corporation tax.

Then, in 1999, the Irish made the mistake of joining the euro (much of the reason for doing so was their anti-Britishness making them want to get rid of the Pound as their currency, so Ireland's current mess is causing much schadenfreude amongst the British people). So they not only adopted the euro but they also turned over their interest rates to the ECB. During Ireland's boom years the Irish could change their interest rates to suit their economy, to allow economic growth to continue.

Instead they gave that up and allowed the ECB to control their interest rates, even though the ECB always sets interest rates to suit Germany, not Ireland. So Ireland now doesn't always have interest rates which are advantageous to its economy.

And the Irish wonder why the British stereotype them as being a bit thick.

Even the author of that article knows that he is telling crap, what ended the growth (by the way, they are growing again now) is the dependence on banks and services, that crashed with the subprime crisis.

No matter what currency they would have had it would have ended exactly the same way... only with the Euro they got help to get out of it. With the Irish pound they would be trying some British monetary acrobatics (that are going to blow sky high soon).

And, the ECB is independent, the board of directors makes the decision, among which there was only one bad one so far: buying sovereign debt when asked by Germany and France.

[questionmark]

in related news:

Markets surge as two-speed plan emerges from euro deal

George Osborne brushed off fears today that Britain would be left behind in a two-speed Europe after eurozone leaders agreed closer fiscal and political integration as part of a landmark deal to salvage the euro. Stock markets around the world - including the FTSE 100 - surged after a marathon summit in Brussels concluded with a deal in the early hours. The three-pronged strategy involves a significant writedown of Greek sovereign debt, recapitalisation of the continent’s banks and agreement to leverage a bailout fund to provide a €1 trillion (£870 billion) firewall to prevent larger economies like Italy and Spain going the way of Italy.

As I said before,there will be the Europe of the willing and the Europe of the stragglers now.

[questionmark]

That webpage is actually an ANTI-European Union webpage which is advocating for Scotland's withdrawal from the EU.

Here is a snippet:

And when I find the poll which shows that the Scots are more anti-EU than the English I'll post it.

You mean that I said it was pro-EU?

[Guest]

please provide the facts and figures for each EU member, be interesting reading. dont forget links of the sources.

If you want the facts and figures they are freely available on Wiki (where I got these from).

The point is that all is far from rosy outside of the Eurozone.

Br Cornelius

[stevewinn]

If you want the facts and figures they are freely available on Wiki (where I got these from).

The point is that all is far from rosy outside of the Eurozone.

Br Cornelius

Its Okay Question mark took the bait.

[stevewinn]

EU with begging bowl in hand - asking China to help bailout the Eurozone. it just gets better and better. Its rather funny how the EU criticize China about Human rights etc .. yet dont mind being indebted to them.

Eurozone seeks bailout funds from China

http://www.bbc.co.uk/news/world-europe-15489202