Change of currency?

SillyMcCarthy

I was just wondering what would happen if we defaulted
upon the Euro & adopted the £ or Sterling as our
national currency? As England is one of our largest customers
& we do import quite an amount of produce from the UK
surely this would make sense?

meglome

This question is asked just about weekly at this point. Any currency changes backed by the country which is close to bankruptcy, i.e. us, wouldn't go too well on the international markets. So my guess is it would make things far worse. Only my opinion but I'd be moving my money if we tried to leave the Euro and I think I wouldn't be alone.

Have a search for the other threads.

nesf

Do a search for other threads. Basically, bad stuff would happen.

johnnyskeleton

SillyMcCarthy wrote: »

I was just wondering what would happen if we defaulted
upon the Euro & adopted the £ or Sterling as our
national currency? As England is one of our largest customers
& we do import quite an amount of produce from the UK
surely this would make sense?

the eurozone is our largest trading partner, so perhaps we should adopt the euro. Joining sterling is politically and economcally foolish.

nesf

johnnyskeleton wrote: »

the eurozone is our largest trading partner, so perhaps we should adopt the euro. Joining sterling is politically and economcally foolish.

Well by joining Sterling I assume he means have our own currency and maintain a one to one relation with Sterling. A la what we used to do with the Punt for decades.

johnnyskeleton

nesf wrote: »

Well by joining Sterling I assume he means have our own currency and maintain a one to one relation with Sterling. A la what we used to do with the Punt for decades.

Since Silly McCarthy posted at 20 to 1 this morning and hasn't rejoined the conversation, I guess it will be up to the internet historians of the future to pontificate over what he really meant.

But if that is what he meant, it would be politically easier for the Irish people but economically worse.

nesf

johnnyskeleton wrote: »

Since Silly McCarthy posted at 20 to 1 this morning and hasn't rejoined the conversation, I guess it will be up to the internet historians of the future to pontificate over what he really meant.

But if that is what he meant, it would be politically easier for the Irish people but economically worse.

Well it would be entirely impractical for us to join the Sterling or Dollar and wouldn't benefit us at all in terms of independence since we'd be adopting their interest rates. The only beneficial one would be our own currency on a one-to-one basis with one of the other major currencies and that brings its own problems with the need for massive currency reserves and whatnot.

johnnyskeleton

nesf wrote: »

Well it would be entirely impractical for us to join the Sterling or Dollar and wouldn't benefit us at all in terms of independence since we'd be adopting their interest rates. The only beneficial one would be our own currency on a one-to-one basis with one of the other major currencies and that brings its own problems with the need for massive currency reserves and whatnot.

Why not then our own currency on a one-to-one with the Euro?

The reality is that the advocates of a new currency or at least a break from the Euro are looking for a magic monetary solution at best or a blank slate at worst.

It's a funny topic though, because it is so immensly impractical and foolhardy as an idea, yet it has gained massive traction in the public conscience.

Lockstep

Main problem with a currency board is that we'd run into the same problems that Argentina did when they backed their peso to the dollar. Fine at first but the minute anything bad happens and the run on sterling happens (for a 1:1 currency trade, every punt in circulation would need to be backed by a sterling held in the banks) the entire system would collapse with the inevitable hyperinflation.

Plus it wouldn't change the inherent structural problems in the Irish economy.

meglome

johnnyskeleton wrote: »

It's a funny topic though, because it is so immensly impractical and foolhardy as an idea, yet it has gained massive traction in the public conscience.

We seem as a nation torn between blaming the EU/IMF and some magic solution where our previous actions have no consequences. We seem incapable of looking hard at ourselves and our political system.

Slozer

SillyMcCarthy wrote: »

I was just wondering what would happen if we defaulted
upon the Euro & adopted the £ or Sterling as our
national currency? As England is one of our largest customers
& we do import quite an amount of produce from the UK
surely this would make sense?

Adopting a new currency is not defaulting. Its only when you devaule the new currency it becomes a partial default. The problem here is that if we left the euro, our debt would still be payable/demanded in euro. If currency adoption were to happen I believe that Greece would adopt a new currency before we do. Then it would be our turn and if you have 2 defaulting nations leaving the euro it would more than likely make the euro much stronger and our position much worse. Germany's decisions are pretty much key here as I think it is they who will ultimately decide the fate of the euro.

Personally I think adopting the Queen sheets or pegging our currency to the sterling is a bad idea. Irish men fought, were captured and shot dead in a firing range to prevent things like this from happening. We have given so much of our freedom away over the past years, this would just be another nail in the coffin.

Inverse to the power of one!

We could start our own blockchain.....

meglome

Slozer wrote: »

Personally I think adopting the Queen sheets or pegging our currency to the sterling is a bad idea. Irish men fought, were captured and shot dead in a firing range to prevent things like this from happening. We have given so much of our freedom away over the past years, this would just be another nail in the coffin.

You might not be aware but there is a huge difference between seeding some control in some areas for mutual self interest and that control being taken by force.

Slozer

meglome wrote: »

You might not be aware but there is a huge difference between seeding some control in some areas for mutual self interest and that control being taken by force.

Tactics have changed but the outcome will be the same.

irishh_bob

meglome wrote: »

You might not be aware but there is a huge difference between seeding some control in some areas for mutual self interest and that control being taken by force.

war is waged differently nowadays

Scofflaw

Enough with Conspiracy Theory "Fourth Reich" rubbish.

moderately,
Scofflaw

meglome

Slozer wrote: »

Tactics have changed but the outcome will be the same.

irishh_bob wrote: »

war is waged differently nowadays

Huh?!? You've lost me. Ireland has benefited massively from the EU. It scares me that in your little conspiracy theory you see the control we share with the EU as a bad thing. Have you not noticed just how bad our own government have messed things up? I hate to think what this country would have been like over the last 20 years without the EU.

Thespoofer

I'd have to agree with Meglome.

Initially I feared losing our 'sovereignty' or 'control of our own destiny' so to speak but looking at who we have ''running the place'', I just wish now at this stage someone with a bit of c/kop?-on came in and sorted this place out once and for all.

Take the knife, make the cuts and lets get back to business.

Slozer

meglome wrote: »

Ireland has benefited massively from the EU.

Really, 14% unemployment, homeowners in negative equity, finances run by the IMF, cheap credit, decimated fishing industry, profitable industries closed etc. We are financially in the worst situation since the state was founded.

meglome wrote: »

It scares me that in your little conspiracy theory you see the control we share with the EU as a bad thing

We are not allowed discuss conspiracy theories in this forum.

meglome wrote: »

Have you not noticed just how bad our own government have messed things up?

Yes I have. They have fuelled the situation very much so.

meglome wrote: »

I hate to think what this country would have been like over the last 20 years without the EU.

We will never know the answer to this, we can only speculate. Financially, possibly something like Iceland but on a larger scale, with a thriving fishing industry and an open Sugar beet factory.

Slozer

Thespoofer wrote: »

I'd have to agree with Meglome.

Initially I feared losing our 'sovereignty' or 'control of our own destiny' so to speak but looking at who we have ''running the place'', I just wish now at this stage someone with a bit of c/kop?-on came in and sorted this place out once and for all.

Take the knife, make the cuts and lets get back to business.

Loosing our sovereignty is loosing our freedom and that can never be a good thing. I would agree that we need someone who can sort out the mess we are in and get us back on the road to recovery.

meglome

Slozer wrote: »

Really, 14% unemployment, homeowners in negative equity, finances run by the IMF, cheap credit, decimated fishing industry, profitable industries closed etc. We are financially in the worst situation since the state was founded.

What you done there is given me a list of things our own government caused. And by extension (since 'we' repeatedly voted them in) we did it to ourselves. So what you appear to be telling me is I shouldn't trust or believe in our politicians, which would seem to be the opposite of what you contend.

Of course if you have any evidence to show the EU did any of these things I'd be happy to read it.

Slozer wrote: »

Yes I have. They have fuelled the situation very much so.

Worse our own government created and fuelled the situation.

Slozer wrote: »

We will never know the answer to this, we can only speculate. Financially, possibly something like Iceland but on a larger scale, with a thriving fishing industry and an open Sugar beet factory.

I get the feeling from some people they think the fish in our waters are made from gold or something. The EU have given us over €40 billion for free up to the recession. How much fish have we given to the EU states? And if you're going to use that nonsense figure of €200 billion you'd better have some evidence for it. Because I do have the real figures if you'd like them, and it's considerably less than €40 billion.

So fish and sugar beet, my my aren't we just so resource rich.

Slozer wrote: »

Loosing our sovereignty is loosing our freedom and that can never be a good thing. I would agree that we need someone who can sort out the mess we are in and get us back on the road to recovery.

What 'freedom' have we lost exactly? We voted for the EU treaties and we can vote in the future to leave whenever we like. I've seen many times in here the word sovereignty means whatever the people posting seem to think it means. Sharing some control in our mutual self interest is a good thing, and a much better plan that some magical idea of sovereignty, in a country with little natural resources.

Slozer

meglome wrote: »

What you done there is given me a list of things our own government caused. And by extension (since 'we' repeatedly voted them in) we did it to ourselves. So what you appear to be telling me is I shouldn't trust or believe in our politicians, which would seem to be the opposite of what you contend.

Of course if you have any evidence to show the EU did any of these things I'd be happy to read it.



Worse our own government created and fuelled the situation.



I get the feeling from some people they think the fish in our waters are made from gold or something. The EU have given us over €40 billion for free up to the recession. How much fish have we given to the EU states? And if you're going to use that nonsense figure of €200 billion you'd better have some evidence for it. Because I do have the real figures if you'd like them, and it's considerably less than €40 billion.

So fish and sugar beet, my my aren't we just so resource rich.



What 'freedom' have we lost exactly? We voted for the EU treaties and we can vote in the future to leave whenever we like. I've seen many times in here the word sovereignty means whatever the people posting seem to think it means. Sharing some control in our mutual self interest is a good thing, and a much better plan that some magical idea of sovereignty, in a country with little natural resources.

Yes I am guilty of voting our politicians in again and again, this is obiviously before I knew exactly what was going on.

I certainly dont contend that we should believe and trust our politicians, in fact quite the opposite.

The point I was trying to make regarding fisheries and the sugar beet factory is that we have lost sustainable jobs in these industries. I firmly believe that food is one of the greatest resources we have and that we should focus on this area as a source of job creation and a means of getting out of the rut we are in.

irishh_bob

meglome wrote: »

Huh?!? You've lost me. Ireland has benefited massively from the EU. It scares me that in your little conspiracy theory you see the control we share with the EU as a bad thing. Have you not noticed just how bad our own government have messed things up? I hate to think what this country would have been like over the last 20 years without the EU.

if your refering to the worst descision in the history of the state , the bank guarentee , that wouldnt have went ahead were it not for the huge pressure coming from the big guns in europe , france , germany and the uk were terrified of a bank collapse across europe and more or less told lennehan to guarentee all in sundry or thier wont be any cash in irish ATM,s in the morning

i really cannot understand the naievete of theese people who would happily surrender all key descisions to brussells , i know parish pump politics has been a scurge in this country but do you honestly believe some belgian or french civil servant will give a **** whats happening in leitrim or port laoise , i dont trust german or french politicans anymore than i do south kerry ones , if we cede complete soverignty to europe , we will be no different to what we were for centurys , a colony of a great foreign power

Scofflaw

irishh_bob wrote: »

if your refering to the worst descision in the history of the state , the bank guarentee , that wouldnt have went ahead were it not for the huge pressure coming from the big guns in europe , france , germany and the uk were terrified of a bank collapse across europe and more or less told lennehan to guarentee all in sundry or thier wont be any cash in irish ATM,s in the morning

Er, no. The decision was taken by the inner circle of the Cabinet, and presented to Europe as a done deal, to very widespread disapproval. The ECB and the rest of Europe had no more input than anyone else, something easily seen if you read all the various leaked documents. Even in the run-up, nobody mentions the ECB or other European countries.

They did get a say when it came to the bailout, but not the guarantee. So the responsibility for the "worst decision in the history of the State" rests firmly within the State.

regards,
Scofflaw

View

Slozer wrote: »

The point I was trying to make regarding fisheries and the sugar beet factory is that we have lost sustainable jobs in these industries.

The sugar beet industry survived here as a direct result of protectionism and subsidies (from the EU) for the production of sugar beet. Sugar cane has always been much cheaper than sugar beet as an "input" into sugar production.

Once those protectionist measures and subsidies were removed, the "sugar beet industry" here was doomed. Are you seriously proposing we go back to protectionism and subsidising sugar beet production with tax-payers' money?

What is "sustainable" about an industry that requires protectionism and subsidies to survive? And, yes, that applies equally to fisheries...

meglome

irishh_bob wrote: »

if your refering to the worst descision in the history of the state , the bank guarentee , that wouldnt have went ahead were it not for the huge pressure coming from the big guns in europe , france , germany and the uk were terrified of a bank collapse across europe and more or less told lennehan to guarentee all in sundry or thier wont be any cash in irish ATM,s in the morning

Scofflaw puts it well above but just to mention that it's far more likely to me that FF's buddies in Anglo pushed for this blanket guarantee than Brussels did.

irishh_bob wrote: »

i really cannot understand the naievete of theese people who would happily surrender all key descisions to brussells , i know parish pump politics has been a scurge in this country but do you honestly believe some belgian or french civil servant will give a **** whats happening in leitrim or port laoise , i dont trust german or french politicans anymore than i do south kerry ones , if we cede complete soverignty to europe , we will be no different to what we were for centurys , a colony of a great foreign power

I believe the EU will do generally what's in our mutual self interest. Which is a step up from how we do it here. Here we seem to have an idea that what's important ends at the parish or county boundary. I've seen it several times even in here that people are voting for someone in their constituency because he's from their county, even though they don't like the candidates party or policies.

Lockstep

Why oh why do people seem to think that we can fish our way out of recession?

View

Lockstep wrote: »

Why oh why do people seem to think that we can fish our way out of recession?

I get the impression that they are 24-carat gold fish.

irishh_bob

View wrote: »

The sugar beet industry survived here as a direct result of protectionism and subsidies (from the EU) for the production of sugar beet. Sugar cane has always been much cheaper than sugar beet as an "input" into sugar production.

Once those protectionist measures and subsidies were removed, the "sugar beet industry" here was doomed. Are you seriously proposing we go back to protectionism and subsidising sugar beet production with tax-payers' money?

What is "sustainable" about an industry that requires protectionism and subsidies to survive? And, yes, that applies equally to fisheries...

the sugar industry is booming worldwide at the moment , that sector of our economy had a great future were it not for the shortsightedness of the descision makers

irishh_bob

meglome wrote: »

Scofflaw puts it well above but just to mention that it's far more likely to me that FF's buddies in Anglo pushed for this blanket guarantee than Brussels did.



I believe the EU will do generally what's in our mutual self interest. Which is a step up from how we do it here. Here we seem to have an idea that what's important ends at the parish or county boundary. I've seen it several times even in here that people are voting for someone in their constituency because he's from their county, even though they don't like the candidates party or policies.

i see you buy into this european partners lark , i suppose the usa and the uk are equal partners aswell when it comes to thier various ventures

if you think a federal europe would see ireland with as much say as germany , your naivetee is truly remarkable

Scofflaw

irishh_bob wrote: »

i see you buy into this european partners lark , i suppose the usa and the uk are equal partners aswell when it comes to thier various ventures

if you think a federal europe would see ireland with as much say as germany , your naivetee is truly remarkable

Leaving aside the federal Europe that only a vanishingly small number of people want, the reality is that Ireland hasn't got the same say as Germany in any real world situation. Possibly it's their huge economy, maybe it's that their population is twenty times the size of ours - either way, there just aren't any situations where Ireland's voice is going to carry as much weight as Germany's. The EU does, however, do a reasonable job of levelling the playing field - both Ireland and Germany are bound by the same treaties, and have equal rights before the ECJ. Given the enormous disparity between the two nations, that's something of an achievement in itself.

cordially,
Scofflaw

meglome

irishh_bob wrote: »

i see you buy into this european partners lark , i suppose the usa and the uk are equal partners aswell when it comes to thier various ventures

Well put by Scofflaw so I'll leave it at that.

irishh_bob wrote: »

if you think a federal europe would see ireland with as much say as germany , your naivetee is truly remarkable

I'm not remotely naive. The people I find most naive are the ones who believe this 'sovereignty' they constantly bring up can truly apply to a small resource poor country like Ireland.

View

irishh_bob wrote: »

the sugar industry is booming worldwide at the moment , that sector of our economy had a great future were it not for the shortsightedness of the descision makers

Well, if that is the case, then there is nothing to stop someone from setting up a new sugar factory to join in this booming sugar industry. The fact that no one appears to be interested in doing so would imply that sugar production in Ireland is at best a marginal industry. Unless that is you'd have us believe that people know there is easy money to be made in sugar production but are choosing to turn their noses up at it...

Scofflaw

View wrote: »

Well, if that is the case, then there is nothing to stop someone from setting up a new sugar factory to join in this booming sugar industry. The fact that no one appears to be interested in doing so would imply that sugar production in Ireland is at best a marginal industry. Unless that is you'd have us believe that people know there is easy money to be made in sugar production but are choosing to turn their noses up at it...

There has never been money to be made in the Irish sugar industry, at least in market terms - there has been money to be spent on it. When the Carlow factory was established in the 1920s, it was only viable with a subsidy nearly equal to the cost of all the beet bought by it, and it has been a subsidy-driven industry ever since.

What the EU did to "kill off" the sugar industry in Ireland was remove the EU system of quotas whereby each member state was allocated a sugar subsidy they could then hand on to individual sugar companies. To get an idea of the resulting costs - the intervention price of sugar in the EU in 2005 was €632 per tonne, against a world price of €200 per tonne. That is, the price which the EU set as a market floor below which they intervened to prop up the price was over three times the world price of sugar. A protective tariff wall against world sugar was necessary, which added more than €500/tonne to any imported sugar.

You're looking at a massively sheltered and subsidised industry there. And who makes money from that? Oh, well, Greencore did - it made 20% of its profits from its sugar division. Nice money if you can get it.

So, the idea that Ireland ever had some kind of open-market viable sugar industry, or that our sugar industry would be a net contributor to our tax coffers is another one of these pieces of complete moonshine, I'm afraid.

Source: http://www.tcd.ie/Economics/staff/amtthews/Personal/Papers/Sugar_IT260105.doc

cordially,
Scofflaw