Bring back the punt? yay nay?

caseyann · 24-10-2010 09:48PM #1

http://www.independent.ie/business/leaving-the-euro-might-well-be-our-least-bad-option-2392372.html
Leaving the euro might well be our 'least bad' option

With the ESRI now predicting that further tax increases and spending cuts of up to €15bn will be needed to meet the Government's target of cutting the budget deficit to 3 per cent of GDP by 2014, Ireland faces the bleak choice of either quitting the euro or facing a decade or more of depression and deflation.

I will for one be delighted when it happens,and cant happen soon enough.

Galway K9 · 24-10-2010 09:49PM

I agree but will lead to another price hike! cause shops gonna round off.

Iwasfrozen · 24-10-2010 09:52PM

It will never happen. The euro is the world's 2nd largest reserve currency.

caseyann · 24-10-2010 09:55PM

Galway K9 wrote: »

I agree but will lead to another price hike! cause shops gonna round off.

The funniest thing is i dont believe so i feel will bring back value.England was smart not changing over.

Iwasfrozen wrote: »

It will never happen. The euro is the world's 2nd largest reserve currency.

And? which is infact falling apart at the sems.And you would like Ireland hanging on the apron strings of collapse.

oppenheimer1 · 24-10-2010 09:56PM

It ignores the huge problem and fact that our debt is denominated in euro.

caseyann · 24-10-2010 10:04PM

I wish we could have a poll on this to get an idea how many for and against it would be.

3DataModem · 24-10-2010 10:07PM

Please please please redenominate my mortgage in Punt.

dontbossme · 24-10-2010 10:09PM

caseyann wrote: »

http://www.independent.ie/business/leaving-the-euro-might-well-be-our-least-bad-option-2392372.html
Leaving the euro might well be our 'least bad' option

With the ESRI now predicting that further tax increases and spending cuts of up to €15bn will be needed to meet the Government's target of cutting the budget deficit to 3 per cent of GDP by 2014, Ireland faces the bleak choice of either quitting the euro or facing a decade or more of depression and deflation.

I will for one be delighted when it happens,and cant happen soon enough.

I AM WIT YOU:::::D

yoshytoshy · 24-10-2010 10:14PM

It's not the euro thats the problem.

They will save our ass in the long run ,so can't see the point in pulling a mooner in front of them now.
It's the spoofers in this country that raped our euro.

coolhandspan · 24-10-2010 10:16PM

lets just give the country back to the queen and apoligise for all the mess......:)

caseyann · 24-10-2010 10:17PM

dontbossme wrote: »

I AM WIT YOU:::::D

I remember my last payment in Irish punt and my first week in Euro(tears of pain) lol,i knew then what is obvious now.The euro and getting deeper in with the EU was going to be ruination of Eire.

caseyann · 24-10-2010 10:19PM

yoshytoshy wrote: »

It's not the euro thats the problem.

They will save our ass in the long run ,so can't see the point in pulling a mooner in front of them now.
It's the spoofers in this country that raped our euro.

Which the euro and weak income tax caused.

Galway K9 · 24-10-2010 10:24PM

Years ago, if ya had twenty euro you were loaded, it was loads and had great value, the euro feels and spends like monopoly money.

oppenheimer1 · 24-10-2010 10:24PM

3DataModem wrote: »

Please please please redenominate my mortgage in Punt.

It would be this that would ultimately fail a return to the punt. Forcing people to buy euro to pay off the massive levels of private debt with a devalued currency would lead to extraordinary inflation. Not only that but there would be a flight of money from the country. Leaving monetary union is simply not an option and I don't know why people still float it as an idea worth talking about. The Punt would be worthless outside of Ireland. Who would want to hold a currency thats under pressure to be devalued? Interest rates would be astronomical.

One thing which we should be thankful of during the crisis is the relative stability of the euro. Sure it makes us take difficult decisions but ultimately these are the correct ones. A devaluation would only lead to stagflation anyway because it doesn't address the major issue being thousands of mainly young men are only skilled in construction or are unskilled.

Unless the developed economy and nation are willing to go back to a semi developed state with associated wages to attract inward investment and create light manufacturing jobs (and compete with the far east) a devaluation would fail in its main objective.

Manach · 24-10-2010 10:26PM

Given that a currency draws its strength from its perceived foundation - which would people rather rely on. Our government or the Bundesbank.

greendom · 24-10-2010 10:27PM

The euro has saved Ireland from ruinous interest rates and inflation. Not to mention the fact that the ECB has completely saved our butts. Thank God we have the euro as our currency. Just a shame we didn't have Europe in charge of our banks.

yoshytoshy · 24-10-2010 10:30PM

caseyann wrote: »

Which the euro and weak income tax caused.

Lets forget about europe ,tulips are all we need.

Now available in Ireland.

caseyann · 24-10-2010 10:33PM

oppenheimer1 wrote: »

It would be this that would ultimately fail a return to the punt. Forcing people to buy euro to pay off the massive levels of private debt with a devalued currency would lead to extraordinary inflation. Not only that but there would be a flight of money from the country. Leaving monetary union is simply not an option and I don't know why people still float it as an idea worth talking about. The Punt would be worthless outside of Ireland. Who would want to hold a currency thats under pressure to be devalued? Interest rates would be astronomical.

One thing which we should be thankful of during the crisis is the relative stability of the euro. Sure it makes us take difficult decisions but ultimately these are the correct ones. A devaluation would only lead to stagflation anyway because it doesn't address the major issue being thousands of mainly young men are only skilled in construction or are unskilled.

Unless the developed economy and nation are willing to go back to a semi developed state with associated wages to attract inward investment and create light manufacturing jobs (and compete with the far east) a devaluation would fail in its main objective.

While reverting to an independent Irish currency, which would trade at a significant discount to the euro, would not be a cost-free option -- far from it -- it is almost certainly the least-bad choice we face.

Leaving the euro would not force us out of the EU. Several prosperous EU members, including the UK, Sweden and Denmark, have retained their own national currencies. Neither would it impair our ability to attract overseas investment as, not alone would we retain access to the Single European Market, the cost of doing business in Ireland would plunge when converted into euro, sterling or dollars.

Finally, with the exception of the banks, who have been forced to sell their overseas operations, leaving the euro would be very good for most of our leading quoted companies. These include CRH, Kerry, Aryzta, Smurfit, Ryanair and Grafton, which do the bulk of their business abroad, as the foreign exchange they earn overseas would be worth much more when converted back into Irish currency.

In the link above.
Punt wont trade less but value will increase and beneficial to Irish trade and people.

caseyann · 24-10-2010 10:36PM

greendom wrote: »

The euro has saved Ireland from ruinous interest rates and inflation. Not to mention the fact that the ECB has completely saved our butts. Thank God we have the euro as our currency. Just a shame we didn't have Europe in charge of our banks.

Saved us? How you figure?Irish economy was racing along Irish punt was of good value and higher value than the euro before change over.You think you got better money and value in actual fact you havent. The euro is like a race horse good for few years then you got to put it out to pasture.The only reason Ireland took the euro was because of the boom,not because it was increasing it.

p.s how come there isnt any polls on here?thanks

greendom · 24-10-2010 10:43PM

caseyann wrote: »

Saved us? How you figure?Irish economy was racing along Irish punt was of good value and higher value than the euro before change over.You think you got better money and value in actual fact you havent. The euro is like a race horse good for few years then you got to put it out to pasture.The only reason Ireland took the euro was because of the boom,not because it was increasing it.

If the crash had occurred with our own independent currency, the Central Bank would have been forced to raise interest rates to stop the currency from sliding too much. But slide it would forcing up the price of exports and causing inflation to increase. The problems we currently face would have been multiplied many times. Ireland adopted the euro for sound economic reasons. Little did they realise at the time just how sound those reasons were.

the groutch · 24-10-2010 10:50PM

greendom wrote: »

The euro has saved Ireland from ruinous interest rates and inflation.

if we had control over our own interest rates the property bubble would never have gotten so big

southsiderosie · 24-10-2010 10:51PM

caseyann wrote: »

Punt wont trade less but value will increase and beneficial to Irish trade and people.

What?

Ireland has to import most of its consumer goods. Going back to the punt would be terrible for consumers. In addition, most Irish consumer debt is denominated in euros. Paying this debt in punts, which would be valued at a significantly lower rate than the euro would be devastating. Even if there were some kind of program to convert internal consumer debt to punts, the government's external debt is in euros and, again, it would not be able to pay it unless it printed thousands and thousands of punts, thus driving up inflation and making it harder again on consumers.

As for exporters, a return to the punt would be a return to macroeconomic economic uncertainly, which I doubt many have the stomach for. Most exporting countries maintain a very stable currency, which reduced transaction costs. And the prospect of future stability under the euro is part of what made Ireland attractive to multinationals in the 1990s; a return to the punt would blow this whole system up in their faces.

caseyann wrote: »

Saved us? How you figure?Irish economy was racing along Irish punt was of good value and higher value than the euro before change over.You think you got better money and value in actual fact you havent. The euro is like a race horse good for few years then you got to put it out to pasture.The only reason Ireland took the euro was because of the boom,not because it was increasing it.

p.s how come there isnt any polls on here?thanks

Another part of the reason why the Irish economy was racing along in the 1990s was because the government specifically developed stable macroeconomic policies to prepare it to enter the eurozone. And then once they were in, they lost their minds.

I think a major reason why Ireland should stay in the Euro zone is because the Irish government has proven - AGAIN - that it has no idea how to properly run an economy, and the euro forces some level of fiscal discipline that they are incapable of implementing on their own.

oppenheimer1 · 24-10-2010 10:53PM

caseyann wrote: »

While reverting to an independent Irish currency, which would trade at a significant discount to the euro, would not be a cost-free option -- far from it -- it is almost certainly the least-bad choice we face.

Leaving the euro would not force us out of the EU. Several prosperous EU members, including the UK, Sweden and Denmark, have retained their own national currencies. Neither would it impair our ability to attract overseas investment as, not alone would we retain access to the Single European Market, the cost of doing business in Ireland would plunge when converted into euro, sterling or dollars.

Finally, with the exception of the banks, who have been forced to sell their overseas operations, leaving the euro would be very good for most of our leading quoted companies. These include CRH, Kerry, Aryzta, Smurfit, Ryanair and Grafton, which do the bulk of their business abroad, as the foreign exchange they earn overseas would be worth much more when converted back into Irish currency.

In the link above.
Punt wont trade less but value will increase and beneficial to Irish trade and people.

I never suggested that leaving the euro would force us out of the union. It would be a major event and would force the union to critically appraise its direction. The euro is a key pillar and the most potent symbol of european integration, a member state needing to leave because it no longer fits would be a momentous event. That withstanding, there are members that operate outside the currency.

The article doesn't deal with my main argument, which is debt. Debt and unemployment are the nations too largest economic issues. Leaving the euro doesn't solve the debt problem as all debt is denominated in euro. A person paying off a euro loan would need to give a larger percentage of their wages to buy euro to pay off the debt. Its also a problem the government would face on a larger scale. It doesn't solve the employment problem either which is skills based, unless of course the devaluation is so steep that it allows us to compete in light manufacturing.

While exporters would do well out of this, it ignores the fact that we need to import a lot of raw materials.Oil would become expensive as inflation takes hold. This would create need for higher wages which could spark further devaluation. In this environment who would want to hold Irish currency? What kind of interest rates would they demand? Would they even be willing?

Fundamentally a devaluation doesn't address the core structural problems at the heart of the Irish economy, being debt and lack of transferable skills. An exit from the euro would most likely lead to a prolonged period of stagflation and a catastrophic loss in living standards.

Furthermore, given the nature of the currency, how would one even go about leaving? There is no mechanism for it.

greendom · 24-10-2010 10:55PM

the groutch wrote: »

if we had control over our own interest rates the property bubble would never have gotten so big

Do you think? I see the logic with this, but then why didn't the government try other methods to slow down the rise in property prices, rather than encourage them to grow even faster with property tax breaks ?

southsiderosie · 24-10-2010 10:59PM

greendom wrote: »

Do you think? I see the logic with this, but then why didn't the government try other methods to slow down the rise in property prices, rather than encourage them to grow even faster with property tax breaks ?

I agree. One of the biggest failures of the boom was the failure of the government to use fiscal tools to cool the economy since they couldn't use monetary policy. But that would require careful planning and forethought.

It really is a shame though, since it seems like people worked really hard in the 80s and 90s to prepare Ireland for the euro, and then it all went off the rails in under a decade.

Het-Field · 24-10-2010 11:01PM

greendom wrote: »

The euro has saved Ireland from ruinous interest rates and inflation. Not to mention the fact that the ECB has completely saved our butts. Thank God we have the euro as our currency. Just a shame we didn't have Europe in charge of our banks.

Please tell me you are joking ? While our link to the Euro is desirable at present, given the prestige it bestows, the euro has been a root cause of the international facet of the crisis which we now face. Artificially set interest rates provided access to cheap credit from a plethora of sources across Europe. These low interest rates prevent inflation in monetary terms, but it simply shifted the inflationary effect into certain markets, most notably the property market. Cheap credit has been a fundamental cause of this problem, and it is due to the euro that said credit was available. If the ECB let the market decide interest rates, this would allow for the most creditworthy to access funds, and the rest would be left behind. Artificially low interest rates are bad. This is what the Euro has brought us.

While I would prefer to remain within the Euro, it is an ignorant man who will launch a robust defence of the Euro, and consider it as an entirely positive force.

caseyann · 24-10-2010 11:05PM

greendom wrote: »

If the crash had occurred with our own independent currency, the Central Bank would have been forced to raise interest rates to stop the currency from sliding too much. But slide it would forcing up the price of exports and causing inflation to increase. The problems we currently face would have been multiplied many times. Ireland adopted the euro for sound economic reasons. Little did they realise at the time just how sound those reasons were.

That is basic guess work and you have no valid argument to say that it would be worse nor how it would have been dealt with.

southsiderosie · 24-10-2010 11:05PM

Het-Field wrote: »

Please tell me you are joking ? While our link to the Euro is desirable at present, given the prestige it bestows, the euro has been a root cause of the international facet of the crisis which we now face. Artificially set interest rates provided access to cheap credit from a plethora of sources across Europe. These low interest rates prevent inflation in monetary terms, but it simply shifted the inflationary effect into certain markets, most notably the property market. Cheap credit has been a fundamental cause of this problem, and it is due to the euro that said credit was available. If the ECB let the market decide interest rates, this would allow for the most creditworthy to access funds, and the rest would be left behind. Artificially low interest rates are bad. This is what the Euro has brought us.

While I would prefer to remain within the Euro, it is an ignorant man who will launch a robust defence of the Euro, and consider it as an entirely positive force.

But there are regulatory ways to deal with cheap credit and low interest rates (for example, large down payments on homes, tax policy, etc). Clearly there needs to be both domestic and EU-wide policy adjustments, but just dumping the euro is like throwing the baby out with the bathwater.

southsiderosie · 24-10-2010 11:07PM

caseyann wrote: »

That is basic guess work and you have no valid argument to say that it would be worse nor how it would have been dealt with.

It's not guesswork, its how monetary policy works.

Boxtyeater · 24-10-2010 11:08PM

Galway K9 wrote: »

Years ago, if ya had twenty euro you were loaded, it was loads and had great value, the euro feels and spends like monopoly money.

I would take from youer comment that you never grew up in the £sd system...Poorer times my a mile..

caseyann · 24-10-2010 11:09PM

southsiderosie wrote: »

What?

Ireland has to import most of its consumer goods. Going back to the punt would be terrible for consumers. In addition, most Irish consumer debt is denominated in euros. Paying this debt in punts, which would be valued at a significantly lower rate than the euro would be devastating. Even if there were some kind of program to convert internal consumer debt to punts, the government's external debt is in euros and, again, it would not be able to pay it unless it printed thousands and thousands of punts, thus driving up inflation and making it harder again on consumers.

As for exporters, a return to the punt would be a return to macroeconomic economic uncertainly, which I doubt many have the stomach for. Most exporting countries maintain a very stable currency, which reduced transaction costs. And the prospect of future stability under the euro is part of what made Ireland attractive to multinationals in the 1990s; a return to the punt would blow this whole system up in their faces.

Another part of the reason why the Irish economy was racing along in the 1990s was because the government specifically developed stable macroeconomic policies to prepare it to enter the eurozone. And then once they were in, they lost their minds.

I think a major reason why Ireland should stay in the Euro zone is because the Irish government has proven - AGAIN - that it has no idea how to properly run an economy, and the euro forces some level of fiscal discipline that they are incapable of implementing on their own.

Here in is the problem made it attractive to every chancer and income tax avoider in world :P

Funny that i dont think the Irish government had anyway of knowing Irish would agree to the euro been brought in.So your argument is nil and void.
I foretold this disaster the year before the euro came in.Smelled failure and economic unbalance.
And sorry not for you to say time and time again about Irish government the state of the country lies in hands of one government and their PD suck ups no previous counterparts.
The EU having any claim over our finances has been a disaster from start to finish.Only sections that any will adhere to help is the ones they gain from and it is not in the Irish interest it is done.

Bring back the punt? yay nay?

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