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.