Time to pull out of the euro?

Gekko

David McWilliams in today's SBP

We are choosing the most difficult fighting option by our euro membership.

.....

This means that, even with a monetary union, the markets do not trust us. So we are paying twice for the euro.

Time to pull out of the euro?

seanybiker

If we pull outta the euro we would be 10 times worse than we are now.

Makaveli

To pull out of the Euro would make absolutely no sense at all.

seanybiker

Makaveli wrote: »

To pull out of the Euro would make absolutely no sense at all.

be grand if they put a pic of me on the heads side of the coin. Then we would have cooler coins than any other place

Makaveli

Felix the Cat is cool and all but I don't know if his face on our coins would bring about stability in the currency markets. But who knows maybe that's exactly what we need!

PhiliousPhogg

Have you a link to the article? I wouldn't mind reading his arguments. Can't see why there'd be any benefit. We've already gone ten years with low interest rates throwing the economy out of balance, what's the point in quitting now?

Économiste Monétaire

Just no. No, no, no.

Here's the story for those interested.

genericgoon

Crazy, crazy talk.

BenjAii

Économiste Monétaire wrote: »

Just no. No, no, no.

Here's the story for those interested.

I have to say I find his argument pretty incoherent, which surprises me coming from Mr McWilliams.

"Last week, Ireland paid significantly more than Germany for €6 billion that we borrowed. We paid 4.07 per cent, while the Germans are paying 3.3 per cent."

Claiming that situation would be improved if we left the Euro is bizarre.

Thinking all our problems could be solved by having the Punt back to devalue is pretty lazy thinking. There's a whole list of other things we could be getting right at the moment to help ourselves.

silverharp

BenjAii wrote: »

Thinking all our problems could be solved by having the Punt back to devalue is pretty lazy thinking. There's a whole list of other things we could be getting right at the moment to help ourselves.

All I could say is can I have some warning so that I can get all my cash out of the country. Ireland would have suffered the same fate as Iceland. I'm surprised at his attitude. ireland isnt the closed little country of the 70's. If we left now all the external Euro debt would be left denominated in Euros, and interest rates would rocket here.

johnnyskeleton

3 Things:

1) On a personal level, I like the fact that I can use the same currency in any other country, I like that the Euro is a strong world currency (it's not out of the equation that EURO will be the next fiat currency). The long term benefits of the euro are better than the short term economic gains.

2) If we were to withdraw from the EURO now, we would be absolutely destroyed in the short term and money flows out of Ireland and our new unstable currency dives. Meanwhile, hyperinflation will destroy all confidence in the domestic economy. The long term economic effects of leaving the EURO would also be bad, and after Lisbon, if we leave the EURO we may as well leave the EU, never to look back.

3) As silverharp says, if we are leaving the EURO, I want to know in advance so that I can take out all my euros, sell everything I own for euros, and flee to Paris with a suitcase full of cash.

Gekko

Maybe he was struggling for something to write, or just being mischievious.

I guess if we did pull out and then devalue the punt, we'd only pay more for the vast amount of imports we suck in, which as others have said, would drive up inflation.

You also have to wonder whether it would trigger a further exodus of some of the multinationals that are here.

Perhaps the point he's making is that at this stage - and apart from the ECB funding benefits - we're not actually benefiting from having the euro as our currency.

We can't do anything about its value and we're stuck with interest rates set by the ECB.

It seems to me that at this stage, we're pretty much screwed whichever way we turn.

BenjAii

Gekko wrote: »

We can't do anything about its value and we're stuck with interest rates set by the ECB.

It seems to me that at this stage, we're pretty much screwed whichever way we turn.

Interest rates as set by CB's are a bit irrelevant at the moment. They are certainly not having the effect on bank lending they are supposed to have in normal times.

There is one word to illustrate the benefits of Euro membership for us and that's 'Iceland'. Our vast bank guarantee scheme would have had about as much credibility as their efforts were we not in the Euro, it's a huge benefit.

MikeCork2009

BenjAii wrote: »

There is one word to illustrate the benefits of Euro membership for us and that's 'Iceland'. Our vast bank guarantee scheme would have had about as much credibility as their efforts were we not in the Euro, it's a huge benefit.

Well said. The joke doing the rounds a while back was "Whats the difference between Ireland and Iceland? One letter and 6 months" If we were not in the Euro what value would our Punt be now, we would be in the exact same position (maybe worse off even) than Iceland. Just take a look at the non-euro countries now screaming to get in.

10000maniacs

Nostradamous McWilliams of "the property bubble is going to burst" fame.
He predicted this property recession in 1998 on his Agenda programme on TV3.
But seriously folks........
Even a stopped clock is right twice a day.
The Popes children indeed... Arse.:mad:

silverharp

10000maniacs wrote: »

Nostradamous McWilliams of "the property bubble is going to burst" fame.
He predicted this property recession in 1998 on his Agenda programme on TV3.
But seriously folks........
Even a stopped clock is right twice a day.
The Popes children indeed... Arse.:mad:

this is a bit like laughing at a doctor who says that you are going to get a heart attack if you are chronically obese, no?

gurramok

I've normally supported the Ginger one on economic matters but he is wrong on this one. If we did pull out, i along with hundreds of thousands of others will move our money into a euro safe haven instead of letting it devalue to being worthless.

RealityCheck

pulling out of the euro would be economic suicide. we wouldnt be able to manage our own currency. it would end in disaster

thebman

Anyone think this is just said to make people wake up that voting no to Lisbon would be a crap idea and realize how important the EU actually is to us?

I find it hard to believe that this guy who anytime I've heard him has made some bit of sense would come out with this statement which seems like complete nonsense.

asdasd

There is one word to illustrate the benefits of Euro membership for us and that's 'Iceland'. Our vast bank guarantee scheme would have had about as much credibility as their efforts were we not in the Euro, it's a huge benefit.

Who knows if we would have been in this situation in the first place were it not for the Euro. The Irish CB generally kept interest rates pretty high, and we would not have had the same kind of propery boom were it not for the ECB setting rates for Germany in the middle of our boom ( now, of course they are fighting inflation in the middle of our recession).

Interest rates were negative in real terms since we joined up to the Euro and the decision to join was a massive massive mistake. leaving is probably impossible though.

As for devaluation, best thing to happen to Sterling in a long time. Heck I am surprised that Dell didnt move to the UK.

asdasd

By the way, not to defend McW, he is not saying we should leave the euro but intimating that the UK is better off outside.