3 2 mins 11 yrs

Well, as ATW readers know, I’ve been arguing this for ages but now it seems others are catching up! Here’s economist David McWilliams…

“Having its own exchange rate allows a country to adjust quickly. Yes, living standards when measured in euro fall, but that has to happen in both the Irish and the Icelandic case. The question is how do you achieve this and are you giving your people a chance?

There is a reason why no economy in the world has ever emerged from a recession like ours without changing its exchange rate. The reason is that it simply can’t be done. There is no evidence anywhere, ever, that shows that a country can operate a successful “internal devaluation” — particularly an economy carrying as much debt as we have.”

This is the point that some of us have made all along to those Nations like Ireland who prostitute themselves to the Euro. They surrender the only thing that can actually save them from Eurogeddon – the ability to alter exchange rates to suit domestic needs.

Ireland is caught in a Euro trap but yet its politicians are determined to keep it that way – lots of good jobs on the Brussels gravy-train, don’t you know. Meanwhile, a new survey today shows 79% of young Irish people see their future….outside of Ireland. Quite tragic, all un-necessary but the predictable price of Euro-membership.

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  1. Great link David. The emperor has no clothes, but anyone who points this out in Dublin is labelled an extremist. This is the extent to which the pro-Euro groupthgink has taken over Irish politics.

    “It is not that the policy of internal devaluation is not working, it can’t work. It has never worked anywhere, ever. Yet the really strange thing is that it is billed as being mainstream economic thinking. It is not mainstream economics, it is highly radical. What is mainstream and proven is the power of devaluations. Yet those recommending the course of action that mainstream economics tells us to do are labelled radicals.

    Language will be very important in a referendum year and you will notice that the Irish and European economic establishment will deploy language to paint those who support the country returning to its own currency as extreme. The truth is that what is extreme is following a policy which has never worked anywhere and the cost of which is mass unemployment and mass emigration. Now that is truly radical.”

  2. McWilliams was labeled as an alarmist when he pointed out that we were in a property bubble too. A lot of people in negative equity are sorry they dudn’t listen to him. His voice on the No side of the coming referendum wil, be very welcome and very influential.

    Our Finance Minister has said it will be effectively a referendum on our euro-membership. Bring it on.

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