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Help Ireland Or It Will Exit Euro, Economist Warns

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This is war: countries have to defend themselves," said David McWilliams, a former official at the Irish central bank.

http://www.telegraph.co.uk/finance/globalb...mist-warns.html

The idea that Germany and France can just hang us out to dry, as has been the talk in the last couple of days should not be taken lying down," he said.
"The economic disaster we are facing is unlike anything which has happened in my lifetime. It is a national crisis and needs a government of national unity," Mr Fitzgerald said.
By keeping with the current policy, the state is ensuring that Ireland turns itself into a large debt-repayment machine. Is this the sort of strategy to win wars

Would hurt ireland if they left, and would the EU care? nope lol, seems like its rock and roll over there.

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Would hurt ireland if they left, and would the EU care? nope lol, seems like its rock and roll over there.

If Ireland leaves the Euro, it will be gone (or, at least, limited to Germany and France) within a year, and if the Euro goes, the EU may not last much longer. The Euro was always a political project, and now we're seeing quite plainly why it makes no economic sense.

Of course all that would be a good thing, but the politicos on the EU gravy-train might have different opinions; buying off the Irish may be the easier option.

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If Ireland leaves the Euro, it will be gone (or, at least, limited to Germany and France) within a year, and if the Euro goes, the EU may not last much longer. The Euro was always a political project, and now we're seeing quite plainly why it makes no economic sense.

Of course all that would be a good thing, but the politicos on the EU gravy-train might have different opinions; buying off the Irish may be the easier option.

The Euro monetary system is workable, too many nations now to leave, your economy would suffer if they left.

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The Euro monetary system is workable, too many nations now to leave, your economy would suffer if they left.

Britain is the only country in the EU whose government would sacrifice its own economy for the Euro, and it's not in there.

If the other EU nations are given a choice between an economic depression or the Euro, the Euro will be history.

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i have no sympathy for the republic of ireland and its self inflicted wound.

had they not got into the house price inflation scam-scandal, they would have been fine.

they are not known for being very bright are they....

saying that, we have an even bigger bubble, so that tells you how thick we are too.

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Guest sillybear2

The Irish government is full of banksters and chancers, they will always play the populist card, that means blaming some external force before they point the figures at themselves (oppressor syndrome?). A couple of weeks ago a minister was bitching about the free floating Pound, and accused the UK of competitive devaluation, which is exactly the sort of get out of jail free card Ireland, Spain, Italy and Greece now needs.

http://www.davidmcwilliams.ie/

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had they not got into the house price inflation scam-scandal, they would have been fine.

If they hadn't joined the Euro, they probably wouldn't have had such low interest rates and such high house price inflation.

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The Euro monetary system is workable, too many nations now to leave, your economy would suffer if they left.

Do you mean the Irish economy would suffer if they left, or the wider eurozone economy?

Both are going to suffer in any case, the question is whether Ireland would be worse-off in or out. Since the euro was founded on the assumption that there would be sustainable economic convergence between member countries, it seems pretty clear that Ireland and others should be out.

As it is, they are trying to use the common monetary system to do something for which it was not designed, in fact they are using it in a manner that was explicitly prohibited by the designers. No warranty claims can be entertained ;)

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If they hadn't joined the Euro, they probably wouldn't have had such low interest rates and such high house price inflation.

having low inflation rates should be the gateway for a load of speculators to pile into housing.

the irish govt could have (like ours) stopped 2nd home ownership, or taxed it to death.

like us, they used the boom to fuel an decadent pointless tat-home-loan economy. for nothing.

now the fires out of control and they go whinging, yes WHINGING to euroland like sorry ass paps.

they could have had it all so cushy had they not had this simple housing boom.

fools.

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If they hadn't joined the Euro, they probably wouldn't have had such low interest rates and such high house price inflation.

having low inflation rates shouldnt be the gateway for a load of speculators to pile into other peoples housing.

the irish govt could have (like ours) stopped 2nd home ownership, or taxed it to death.

like us, they used the boom to fuel an decadent pointless tat-home-loan economy. for nothing.

now the fires out of control and they go whinging, yes WHINGING to euroland like sorry ass paps.

they could have had it all so cushy had they not had this simple housing boom.

fools.

Edited by the-sign-jacker

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Guest sillybear2
Do you mean the Irish economy would suffer if they left, or the wider eurozone economy?

Both are going to suffer in any case, the question is whether Ireland would be worse-off in or out. Since the euro was founded on the assumption that there would be sustainable economic convergence between member countries, it seems pretty clear that Ireland and others should be out.

Convergence can only ever be possible if fiscal policy is centrally controlled too, the Irish state isn't helping itself by planning to run a 12% deficit in a year or two, what happend to the rules?

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having low inflation rates should be the gateway for a load of speculators to pile into housing.

the irish govt could have (like ours) stopped 2nd home ownership, or taxed it to death.

I'm not persuaded that that would have stopped the boom ... it wasn't just 2nd home owners that bid up prices, was it? (I'd have thought it was mainly owner-occupiers or landlords).

And even if you limit one sector such as 2nd home ownership, a flood of cheap money entering an economy will inevitably drive up asset prices. The solution is to stop the flood of cheap money, not to try to plug specific legislative gaps to keep it out. Stopping the flood is hard enough to do even if you have your own currency (because in a globalised financial system, cheap euros or yen can still flood into your economy, putting local borrowers at even greater risk).

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Convergence can only ever be possible if fiscal policy is centrally controlled too, the Irish state isn't helping itself by planning to run a 12% deficit in a year or two, what happend to the rules?

Then the whole project was doomed from the start, because sustainable convergence was a pre-condition of EMU (it's what the ERM testing period was meant to prove).

The 12% future deficit is surely a symptom of the lack of convergence, not a cause of it.

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I'm not persuaded that that would have stopped the boom ... it wasn't just 2nd home owners that bid up prices, was it? (I'd have thought it was mainly owner-occupiers or landlords).

And even if you limit one sector such as 2nd home ownership, a flood of cheap money entering an economy will inevitably drive up asset prices. The solution is to stop the flood of cheap money, not to try to plug specific legislative gaps to keep it out. Stopping the flood is hard enough to do even if you have your own currency (because in a globalised financial system, cheap euros or yen can still flood into your economy, putting local borrowers at even greater risk).

i think the idea behind the cheaper interest rates was aimed at business users.

mans greed got in the way and so the business users of this money went for the shortest route - property speculation.

some banks went at it hell for leather, and the government got short term popularity over it, but like all pyramid schemes it reaches a breaking point. and property speculation is a pyramid scam. heres the breaking point, though i love the british govt try to add one more tiny layer of underlings to the scam at the cost of almost £350 billion to date, and still cant fix it to save theor own political arses.

a landlord is a 2nd home owner. without them, and just social housing to let there would not have been a boom.

if you stop building social housing to a 4 year waiting list, and fuel the sheep with cheap credit

and 24hr media brainwashing.

profit tis sure ter follo'......

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Then the whole project was doomed from the start, because sustainable convergence was a pre-condition of EMU (it's what the ERM testing period was meant to prove).

The 12% future deficit is surely a symptom of the lack of convergence, not a cause of it.

I agree, and investors are dropping their Irish/Spain/Italian/Greek sovereign debt in exchange for German bonds, just look at the spreads, which means the ECB are repo'ing the unwanted bonds and the German tax payer is then left holding the liabilites for the entire block. It's a stealth bailout, that's not going to be popular with the German public. International investors are basically playing the same game as those irrational German's that refused Euro bank notes with Latin serial numbers, except when it comes to the bund markets this actually matters.

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Convergence can only ever be possible if fiscal policy is centrally controlled too, the Irish state isn't helping itself by planning to run a 12% deficit in a year or two, what happend to the rules?

Didn't most of the Euro nations lie about meeting the 'rules' in the first place?

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i think the idea behind the cheaper interest rates was aimed at business users.

It was aimed at stimulating the German economy; the fact that Ireland's economy -- which was not in lock-step with the German one as the shared currency/interest rate system required it to be -- was bound to cause overheating there.

a landlord is a 2nd home owner. without them, and just social housing to let there would not have been a boom.

if you stop building social housing to a 4 year waiting list, and fuel the sheep with cheap credit

and 24hr media brainwashing.

A certain amount of credit will lead to a certain level of asset prices, I don't believe it makes any difference whether the players have one of the asset, or many. Owner-occupiers (or tulip buyers, or South Sea shareholders) are just as able to borrow to outbid one-another, as landlords.

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Guest sillybear2
Didn't most of the Euro nations lie about meeting the 'rules' in the first place?

Yes, Italy pulled an Enron, they entered into off balance sheet derivative contracts in order to make it appear they fell under the entry criteria :-

http://www.guardian.co.uk/business/2001/nov/05/theeuro.emu

The Euro is of course just a political exercise, which is precisely why this sort of "bail me or else" blackmail will bring the lot crashing down if it's permitted.

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I agree, and investors are dropping their Irish/Spain/Italian/Greek sovereign debt in exchange for German bonds, just look at the spreads, which means the ECB are repo'ing the unwanted bonds and the German tax payer is then left holding the liabilites for the entire block. It's a stealth bailout, that's not going to be popular with the German public. International investors are basically playing the same game as those irrational German's that refused Euro bank notes with Latin serial numbers, except when it comes to the bund markets this actually matters.

Interesting, that stealth-bailout hadn't occurred to me. Presumably the ECB is not obliged to repo these bonds and might at some point refuse?

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i think the idea behind the cheaper interest rates was aimed at business users.

mans greed got in the way and so the business users of this money went for the shortest route - property speculation.

some banks went at it hell for leather, and the government got short term popularity over it, but like all pyramid schemes it reaches a breaking point. and property speculation is a pyramid scam. heres the breaking point, though i love the british govt try to add one more tiny layer of underlings to the scam at the cost of almost £350 billion to date, and still cant fix it to save theor own political arses.

a landlord is a 2nd home owner. without them, and just social housing to let there would not have been a boom.

if you stop building social housing to a 4 year waiting list, and fuel the sheep with cheap credit

and 24hr media brainwashing.

profit tis sure ter follo'......

Thats the whole issue social housing was dropped and became shared ownership, government got too greedy they knew it was coming.

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If they hadn't joined the Euro, they probably wouldn't have had such low interest rates and such high house price inflation.

The Euro and low interest rates was their golden goose, which they fornicated from both ends before cooking it. The failure was with the banksters getting greedy, just like everywhere else and lending massive amounts, willy nilly to every punter wanting to bid up the price of housing.

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Yes, Italy pulled an Enron, they entered into off balance sheet derivative contracts in order to make it appear they fell under the entry criteria :-

http://www.guardian.co.uk/business/2001/nov/05/theeuro.emu

The Euro is of course just a political exercise, which is precisely why this sort of "bail me or else" blackmail will bring the lot crashing down if it's permitted.

If it is not permitted and member states have to drop out of the euro then would that not have the same effect of causing the collapse of the euro?

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i

they are not known for being very bright are they....

saying that, we have an even bigger bubble, so that tells you how thick we are too.

The Irish bubble inflated far beyond the UK one - think house prices increasing seven times in the last ten years compared to three times in the UK ...

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The Irish bubble inflated far beyond the UK one - think house prices increasing seven times in the last ten years compared to three times in the UK ...

Indeed, the irish were complaining the euro IRs were too high, they would have been lower. they even introduced a miras type taxback scheme to throw gasoline on the fire. dodgy housing indexes, massive overbuilding, ridiculous planning restrictions, the irish shouldn't be looking outside the country for people to blame. house prices there are still seriously insane, they even tried to pull the 'shortage of land' con - in a country that is one massive field.

Edited by davidhpc

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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