A chilling article in EuroIntelligence this morning claims that the Euro zone will split up in a matter of days and that officials in France and Germany are preparing the way for this, what they call, biturcation.
EuroIntelligence is subscriber-based, so I can't link, but here is a quote:
"We have now reached the bifurcation point in the crisis where the eurozone will, within days, have to make a choice between debt monetisation, which is hardly feasible without a political commitment to a fiscal union, and a break-up. The latter will happen if no decision is taken.
Reuters reports, citing unnamed EU sources, that French and German officials have been discussing a radical systems change, involving a smaller and more integrated eurozone."
This would clearly be disastrous for Ireland, as our reliance on imports will be punishing if we have a worthless redenominated Punt. EuroIntelligence also claims that this ringfencing of the core will also lead to the collapse of the entire European financial system though.
One has have to love the wording, I once heard of the term urinary bifurcation and was wondering when bifurcation is juxtaposed with the Euro does that mean some Countries will be pissing and other countries getting pissed on?
You seem to be living in some kind of economically illiterate utopia. (a) If we are turfed out of the Euro, the government will have to redenominate into a debased Punt before any pegging can take place. (b) While a debased Punt might be good for our exports (or rather the exports produced by multinationals that are based here, assuming they would stay), it would be disastrous for our purchasing power of the imports on which our country relies on a day-to-day basis, for example in the energy sector. Furthermore - vis pegging to Sterling - if the Euro goes belly up, English banks will also be shafted. It will be bean can time.
Either way, the scenario that some of the wingnuts on p.ie have been wishing for could soon come true...then we'll see if your desire to leave the Euro was well judged.
It wouldn't actually be good for our exports either - as they all, either directly or indirectly, rely on imports in some way. Even a completely Irish-produced product like butter, for example, still requires diesel in trucks to get it to the ports for export. And all the people who produce our exports also consume lots of imports that we can't make here, like oil-based products, TVs, cars, even imported entartainment like CDs and DVDs, and so on. The IR£ price of everything would thus rocket, meaning higher wages would be required for everyone - thus destroying any initial competitive advantage gained by the export sector, as those higher wage and energy costs feed rapidly into overall costs.
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