Euro and the Irish Economy

The financial problems of some Euro zone countries are causing enormous pressures on the common currency itself. Germany and France, who instigated the birth of these idealistic notions, did not think that unless all the joining members have similar convergence, and sound industrial and economic footings and bases, the burden of those aspiring countries to join the rich club would be futile. Now the problems have come home to roost.

Greece who started the problem by borrowing 14% of the GDP had to be bailed out by financial injections of billions of Euros, Dollars and Sterling by EEC and IMF. The economic woes of Ireland are worse as the Irish economic growth was fuelled by bankers' greed, constructions of millions of real estate properties and careless lending to NINJAS (No Income, No Jobs and Assets) and who failed to repay their loans. The Irish were borrowing nearly 15% of the GDP to keep the economy going and when the Irish Bond market borrowings dried up they had no option but to come for help. To protect the Euro, Germans, French, Britain and other EEC members have come up with the money with stringent conditions ie to cut in wages, benefits as well as the rise of income tax, VAT, but kept the Corporation tax at 12.50% to attract foreign and domestic investments. The riots and social unrest took place and they have no alternatives, they have to live within their means and with the debt reductions programme. By excessive imports from Germany (who has 200 billion euro surplus)France, Holland ,China, India, Thailand, Indonesia and other s have led to destruction of Irish Industrial base. How would they repay? What they would sell to earn and build capital to future growth and maintain the domestic employment, infrastructure, pay for front line services and social care and pensions? Successive Government with Dogma driven principles, rather than the economic realities and minimum wages, paying youth unemployment benefits, where there are jobs to be filled (Most of the Rumanians, Bulgarians and people from Poland are filling the vacancies) UK is also in a similar situations, but thanks to the size of the UK economy, it will ride out the storm. Gordon Brown and Alistair Darling believed in Macro economics and believed in spending your way out of recession, but it is wrong notion, and it worked after the World War II whose constructions and rations and borrowing led to the post war boom. But you cannot replicate the situation in modern times.

I sincerely hope that Irish economy can again be strong and dynamic. The Irish Government must carry popular support, as did the Canadians who accepted the austerity measures and came out as a strong economy once again. They have learnt a lesson that reckless profligate spending led to the economic ills. Hope the Irish and British and other well meaning but dogma driven politicians stop giving tax credits to middle classes and other benefits to youngsters. When the Irish economy recovers everyone will benefit with a lasting legacy of prosperity, pride and panacea.