Post on Ireland 25/11/2010
Posted by Jacob Rees-Mogg, MP for North East Somerset, at 16:01, Thu 25 November 2010:
Should the British taxpayer help bail out Ireland?
It seems to me that this question falls into two parts. First, what is our obligation to our neighbour and second, ought we to take actions that support the euro? The former is easy to answer. Ireland is a major trading partner and our banks have lent about £100 billion to it in one form or another. With the current public ownership of our banking sector and the losses that depositors would face if they took a further massive loss there is a strong self-interest in supporting the Irish economy. This is in addition to any moral or historical obligation we might have since Ireland was ceded to England by Nicholas Brakespear, Pope Adrian IV and the only Englishman to wear the triple tiara.
The latter part is harder to answer. There is risk of contagion and a severe economic dislocation if the euro were to collapse. The problems caused by Lehman Brothers would be a mere bagatelle. However, the euro project has failed. It is a political project that decided to re-write the rules of economics by assuming that a variety of economies could prosper under one monetary regime. Instead, it performed in the way many people expected by providing excessive cheap money that fuelled a boom followed by extreme deflation to deepen a bust. Ireland, Greece, Portugal, Spain and Italy are now known to have found this unsustainable but question marks remain even over France. For these economies to flourish they need to devalue. This requires an orderly abandonment of the euro and any money we spend should be to this end.
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Posted by peter wenban, 16:31, Thu 25 November 2010: (Is this post abusive?) #
Jacob, I agree with what you say. The euro is doomed, the issue is when do the using nations wake up to reality and how do they unscramble the eggs, so to say.
Assistance should be channelled into this direction regards Peter wenban
Posted by John Doran, 17:22, Thu 25 November 2010: (Is this post abusive?) #
Jacob, How right you are. The Euro cannot survive. It is a miracle tht we have somehow found £500bn to help the Irish. Where has it come from? To use it to help the Irish is surely in our interests, but what if the Irish fail to repay our generosity? Where would that leave us?
Regards
John Doran