QuoteI'd be with David McWilliams at this stage, we need to get out of the euro and either let the banks die or default on our debts.
I read in one of the Sunday papers a couple of weeks ago that the Greeks were thinking about defaulting on their repayments which could lead to a collapse in the Euro and also according to the news today the Spanish position is even worse as the size of Greece's debt could be managed as it is a much smaller country.
What are peoples opinions on the merits or demerits of the single currency falling? particularly from Ireland's point of view?
I'd be with David McWilliams at this stage, we need to get out of the euro and either let the banks die or default on our debts.
He's been saying that, DMcW, since he had his tv show and right now I am more and more swayed. Then again, this is all going to stabilise. I'm more worried about Hungary going down the tubes. The paddython orgy of buying apartments in grotty locations is dead and gone, since even before we went belly up in Ireland. Now 2 leading politicos there say that the country's debt to GDP is rising and it'll need another hand out from the IMF. If the Greeks sort out the pension mess they'll be okay. Hungary has alot more problems to deal with!
If Gov.ie keeps sneaking a billion here and a billion there into Anglo to prop it up, and similiar idiocy, Ireland hasn't a hope of stabilising. If anything, things'll get worse.
Remember, our debts are actually worse than all of the other countries in the horrors.
It;s not stopping Estonia from joining up!
http://www.rte.ie/business/2010/0608/euro.html
If we left the Euro it would bring about an Automatic default IMO as we would not be able to repay loans denominated in Euro from our "new" worthless currency!
The govermant in this country is lucky were not like the greeks with all their rioting. When the greeks took to the streets they were chanting we are not like the irish we fight for our rights..... true story it was on tv3 news couple of weeks back
I agree, but then the Greeks even with all their rioting didnt change a whole lot either for themselves. But they probably felt that little bit better
How were they "lucky"? What difference would it have made to them, their income or their pension?Originally Posted by Kieran Burke
On the other side, strikers would have been out of pockets to the tune of millons and union leaders would have basked in the limlight. All the while, interests payments would be getting bigger and we'd have been getting deeper in debt as we paid overtime to the public sector to catch up when they came back into to earn their crust.
As for the Greeks chanting were not like the Irish..... Thank goodness for that as it works both ways!
Didn't they murder a bank offical or two in the process?
Lucky indeed.
Spot on Fr. Damo.
You can't move from a stronger currency to a weaker one without complete default as your debt is still denominated in the "stronger" currency. If we leave the Euro, we'd need to move to the Dollar, Swiss Franc or Chinese Reminbi. Is that going to happen? If we adopted a "new Irish punt" it would immediately devalue against the Euro, our Euro denominated debt would still need to be repaid in Euro, and we'd need even more "new Irish punts" to repay it. Ergo complete default.
McWilliams is so tied to his position that any credibility he ever had has long since gone. He's firmly in the space of the housewives economist.
Last edited by OneRedArmy; 09/06/2010 at 10:02 AM.
In fairness to McWilliams- he also argues for default, saying in the long term it will be less painful than trying to deal with massive debt levels.
#NeverStopNotGivingUp
Indeed. That was actually the point of the "leave the euro" articles.
If I'm remembering the same article, he couldn't quote one example where a country has benefited from a strategic default. If you look at sovereigns that default over time, a trend emerges: default begets future default.
He also leaves the core question unanswered: after you default, who do you borrow from and at what rate (after the IMF have left town)?
Or do you put the printing presses into overdrive, create inflation and decimate the nations savings?
Some economists I disagree with their analysis (Morgan Kelly being one) but their work is clear, academically rigorous and well presented. McWilliams is different, there is nothing there when you scrape beneath the veneer of the weekly columns and 30min primetime sessions on RTE.
Just for the lay people among us - by "defaulting", are we kind of talking the same thing as Derry and Cork in the league last year?
Yes. Not making repayments on your outstanding loans.
As for you being a "lay person", aren't you an accountant?!
Yes. I work in the motor industry making sure people pay us what they owe and telling the boss man how much poorer he is this month. There's subtle differences between that and the economics involved in running a country.
I wasn't aware a country could basically start again.
The only difference in this situation is that the numbers are bigger!Yes. I work in the motor industry making sure people pay us what they owe and telling the boss man how much poorer he is this month. There's subtle differences between that and the economics involved in running a country.
I wasn't aware a country could basically start again.
Argentina does it every few years. The problem is that people (and the Governments and corporations they work for) have memories and are reluctant to lend to you again without some kind of IMF guarantee or ridiculously high interest rates.....which tend to increase the probability of future default as previously defaulters are the first countries that the financing tap is turned off for whenever any financial crisis erupts anywhere in the world.
Even if you get the IMF to guarantee or provide loans, their fiscal austerity measures tend to decimate any remaining wealth of a country.
It was more than one article, and he did give examples of previous defaults. His website is here.
Most economists were blaming the strong euro for our lack of competitiveness, so at least export trade will improve, which would in turn impact on the balance of payments. Interesting to note that non-eurozone members such as Hungary and Latvia are facing some of the stiffest austerity measures, while the UK economy suggests that we would be little better off if we had kept the punt. As one commentator mentioned when Italy toyed with bringing back the lira, you couldn't imagine California or Florida abandoning the dollar, in 3-5 years time, the cycle will favour the EU once more.
good point and I think they murdered 3 people all together (just put that part in cause my post was to short)
IMO we are better to be in the Euro now than to leave, the UK will find out they are none too smart soon enough (june 22) and could well wish they were in the Euro too. The question of "would we be better off if we never joined up"? is the real one and all the evidence points to yes. In other words, our wealth could well be less than 1999 levels before this finishes. The ECB was bad for Ireland becuase we were not used to having and therefore managing cash, from household, commercial and especially governments
Didn't read the report published yesterday yet, but how is Neary not in jail? At the very least he collected a couple of hundred grand a year for doing nack all. Fraud, no?
Last edited by Fr Damo; 10/06/2010 at 11:35 AM.
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