There is a joke going around the finance houses in the City of London at the moment.
“What is the capital of Ireland?”
The answer is “about twenty euro!”
I remember the night that I saw the first euro notes.
It seemed a milestone, not just in terms of a conversion to a new currency, but in our faltering steps on the road to European modernity.
Although an ancient nation we Irish are still a young country with a lot of post-colonial baggage.
This seemed a step in the correct direction.
The economic reality was that it made credit dangerously cheap in Ireland for too long than was good for us.
Coupled to that we would find out to our cost that we do not have the currency devaluation bullet in the macroeconomic revolver.
Iceland does and they have used it to effect.
The much derided ex-British Prime Minister Gordon Brown has been blamed for almost everything that has befallen the UY economy since the collapse of Lehman Brothers in 2008.
Not only was he the dithering PM, dazzled in the headlights of world financial crisis, but he was the guy guarding the money tree while Tony Blair was on the world stage.
All of this is desperately unfair.
Two words can dismiss the argument that brown didn’t know what he was doing.
Despite Blair’s urging Brown was steadfast in keeping the UK out of the common currency.
This has meant that the UK has been able to print money (the posh term is “quantitative easing”).
The UK, like Iceland, has also the option of devaluing Sterling to kick-start an export led recovery.
My country has none of these options. Not only are we in the single currency, but we are now governed by a small team of officials from the IMF.
This, of course, is because of the bailout we received late last year is €72 Billion.
The interest rate of 6% means that this debt is unpayable for an economy the size of Ireland.
The last Fianna Fail government and I truly hope it is THE last Fianna Fail government, took the crazy decision to bail out the banks and recompense river boat gambles called “Bond Holders” because they had lost at the table.
This Bondaid will put my grandchildren, if I have any, into servitude to the international money markets.
Greece, in a similar situation, is now having a conversation about carrying out a “debt audit”.
This would separate debts into those that should be paid by the Greek taxpayer, for example genuine government borrowing for, say, infrastructure projects. Then there would be the other sovereign debts that should not be the responsibility of the Greek people. Financial gambles by banks and financial institutions that didn’t come off.
The new government led by Enda Kenny could deploy the following option. It would take courage and imagination, but remember this new government is led by Enda Kenny which is why the following won’t happen.
The new government should negotiate a deal to the European Central Bank, the IMF and our colonial masters in Brussels and give THEM two options.
Plan “A” that the Irish debt be federalised across the Eurozone. Much of the debt we are currently buckling under is from the Bank Guarantee scheme bailing out, among others, German financial institutions that bet on Ireland though the Bond Markets.
This would mean that Ireland would not default and that the Eurozone could move forwards.
Should Ireland default then it could spark a chain reaction that would hot Portugal, then Spain.
Spain is the fourth largest economy in the Eurozone.
If Spain goes it is critical mass.
This Spanish town may well be ahead of the curve on this one.
Of course if you have a Plan “A” you should always have a Plan “B”.
For Ireland that means having lots of Punts printed and stashed ion the vaults of the Central Bank in Dublin. This second option allows us to walk away from the Euro.
Monetary Union has stripped us of what generations of Irishmen and Irishwomen struggled for, sovereignty, independence and a basic control over our own affairs.
I still believe in a place called Ireland.
That is why I think plan “B” is worth a Punt.