We have to devalue, says David McWilliams

[wysiwyg]

McWilliam's reasoning was that we have leverage in Europe because of the need to get a Yes vote in the second Lisbon referendum.

I haven't a clue myself the technicalities of how such a devaluation would take place.

Certainly we need the continued protection of the Eurozone but the powers that be are ignoring the fact that the strong Euro is destroying Irish jobs wholesale.

Later this year a lot of people may be thinking like McWilliams when the fuller extent of job destruction becomes apparent.

I am sure they are thinking of it right now, but I repeat, its impossible to do it while remaining within the EMU. It doesn't matter what level of leverage Ireland has in relation to the Lisbon Treaty, you are not going to get agreement from the ECB to devalue the Euro simply because Ireland's economy is in trouble. Our national economy is so small in relation to the wider European economy, that the ECB simply couldn't care less about our problems, as callous as that might sound. In their opinion, they are much more likely to think that we got ourselves into this mess by poor economic planning, now we can get ourselves out, even though that means probably a decade of severe financial pain for the population.

As for leverage on Lisbon.. they'd simply throw Ireland out of the EU before they conducted monetary policy simply to protect the economy of a tiny portion of the Union. In EU terms, the economy of the Greater Manchester area is probably more important than that of Ireland

[wombat]

I don't know how it could be done myself but McWilliams seemed to think it was possible.

McWilliams has been right on the property bubble/ banks/ cronyism but he is starting to lose the run of himself - he's a good writer, he's quite smart but he's not a genius.

[Rebel CNC]

McWilliams is just flying the devaluatgion flag to get people talking about fundamental issue i.e competiveness and thus the need to make dramatic cuts in price of labour - contraction of services industry and continuing job losses in manufacturing will take care of private sector. Govt need to address the public sector payroll asap. Biffo's hope of deferring the really tough decisions until after June elections are gone out the window.
Essentially all the largesse doled out by Benchmarking Bertie on the back of a one off windfall revenue stream has now to be pulled back.

[TradCat]

The question is what will happen if we carry on as we are. We can cut spending and raise taxes but both are deflationary.

Economic activity could wither slowly away, people will start to leave and the government will run out of money.

[robert151410]

Thye smug confident Irish of the new generation are now much more humble. I like that

[ballot stuffer]

This talk of leaving the Euro and devaluing is pure nonsense.

It is totally impractical. All our considerable personal debt is in Euros leaving and devaluing will straight away multiply this debt.


At this moment in time it is the economic equivalent of a lobotomy.

[Rebel CNC]

Thye smug confident Irish of the new generation are now much more humble. I like that

Indeed. I quite like McWilliams and Lee if only because on my return to Ireland in 2004, they made a refreshing change from the usual pub conversations of "how great my property investments" are and the property porn supplements and features in all the papers.!

They may be annoyingly smug but after the battering they took from politicians, media ,etc it must be diificult for them to not say "ha, ha, I told you so"

[garlandgreen]

Thye smug confident Irish of the new generation are now much more humble. I like that

Schadenfreude And usually thrown by people who will never move from the cheap seats. We had it good for quite a while. Somehow I get the impression that you had little to do with that. Or that you will offer anything better. But if the ship goes down you go down with it . So maybe you could remove that smug tone and be a little more well....humble

[wombat]

They may be annoyingly smug but after the battering they took from politicians, media ,etc it must be diificult for them to not say "ha, ha, I told you so"

I still enjoy reading McWilliams because he can be quite original, especially with his historic analogies but he's getting a bit like a bishop, thinks he's always right.

[seabhcan]

I suggested this ages ago, we need to cut the cost of everything here by 20%, that will work.

I think this might be a good idea. If you did a deal between the gov, the unions and the retailers to cut everything by 20% - wages and goods - it might be acceptable to all.