Wednesday, Jun 10, 2009
WIll the UK follow Eire?
BBC News: Eire - boom to bust
Where have I heard all this before?c
Posted by chrisch @ 10:45 AM (449 views) Add Comment
2 Comments
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1. uncle tom said...
It all comes down to the Irish joining the euro, and having to accept interest rates that were set in Brussels at a rate that was far too low to stop a massive boom-bust cycle developing.
The UK has a lesser version of the same problem - interest rates were too low for too long; and if we'd taken the advice of Danny Boy Blanchflower, and dropped them even lower, our boom-bust cycle would have been worse.
2. peeping tom said...
It's not simply the Euro, Uncle Tom. If mortgage lending had been restricted to traditional levels then the boom-bust cycle would not have been as large. Unfortunately, the Euro allowed many Irish people to delude themselves that they have a 'continental' mentality when in reality their attitude to land and property has always been pretty similar to that on this side of the Irish Sea. Think of all the Irishmen who have made their living in the building trade, working their way up from brickies to skilled craftsmen to contractors and then developers. The Irish contribution to the 'Anglospheric' bubble shouldn't be understated.