Breaking the link with sterling.

From this evenings programme Behind Closed doors on RTE, where they take a look at what the Irish government was really up to in 1978. As the Irish government have also released papers from that year. Here we are told about Ireland joining the EMS, and breaking the link with sterling, a decision that took considerable courage. There was pressure brought on the Irish by the British not to join the EMS as it would mean that Britain would be isolated. However the Irish took the decision to join, and one of the considerations to break the link with sterling was that it would prove Ireland was truly independent.

  • And we can probably settle arguments about whether that was ultimately as wise or a foolish decision over the next 24 months… given the way the BoE and Brown seem intent on asset stripping the currency of a high import economy to prop up the property market, I’d guess it’s going to end up being a wise one.

  • Harry Flashman

    “Iโ€™d guess itโ€™s going to end up being a wise one.”

    A brave guess Sammy, I agree that sterling is closely resembling Andrex two-ply these days but I’m not entirely convinced the Euro won’t be looking something very similar come Jan 1 2010.

  • You’re right, of course to point out that there are many imponderables and the world economy is in a state of flux; many sacred cows, from all sorts of political perspectives, are heading for the slaughterhouse over the next few years.

    On the other hand, the Euro is the only major world currency not currently pursuing a cheap-currency strategy aimed at encouraging citizens and businesses to take on more debt. Even the Swiss have now gone down this road. When the disease is overindebtedness (the real cause of the ‘credit crunch’), the cure is not more debt. The rigid fiscal orthodoxy of the Bundesbank, and the fact that they are the only people with enough wit to do anything other than blindly copy Ben Bernanke’s mistakes, will prevent the governments of, say, Ireland and Spain copying the follies of the Anglo-American model for more than a few more months.

    People can argue that a strong Euro will make European exports too expensive on the world market; but the Eurozone has huge domestic demand and would also benefit from vastly lower food and fuel prices. In a deep recession, the two things we all really need to live on will matter more than Wiis and Mitsubishi Shoguns.

    But as I said, I could be totally wrong.

  • Glencoppagagh

    “…it would prove Ireland was truly independent.”

    Merely switched direction of monetary policy from London to Frankfurt. Ireland has never experienced monetary autonomy except for the brief period when it withdrew from the ERM.

  • It was Sammy Mc Nally what done it

    Overall surely a good decision. Those who were shouting for higher interest rate to ‘cool’ the Irish property market – have gone away you know – and Sterling may well be in further bother as the City, a major earner for the UK, continues to take one hell of a beating.

    Has anyone seen an on-line table showing the comparative amounts of personal and government borrowing in the UK, Ireland, and EU?

    On RTE news they continously say that sterling is devaluing further agianst the Euro because the Englezes are going to reduce interest rates – as if currencies were only impacted on by this one factor and although Economics is more guesswork than science you would expect RTE at least to keep up with current thinking.

  • Greenflag

    IWSMNWDI ,

    ‘Economics is more guesswork than science you would expect RTE at least to keep up with current thinking.’

    You would ? They can’t even keep their Web site updated at weekends . I think they believe that the ‘world ‘ closes down on Friday at 5.00pm and reopens on Monday at 9.00 a.m .

    I’ve given up on them and now just read the BBC sites and others ๐Ÿ™

    As I don’t pay a TV license not having a TV I’m not fussed ๐Ÿ˜‰

  • Greenflag

    Sammy Morse ,

    ‘many sacred cows, from all sorts of political perspectives, are heading for the slaughterhouse over the next few years’

    Not forgetting ‘economic ‘ perspectives. The jury is still out on how any Obama fix can work without turning the US dollar into a look alike of the Polish Zloty pre 1989 .

    ‘the Eurozone has huge domestic demand and would also benefit from vastly lower food and fuel prices.’

    Indeed .

    ‘ In a deep recession, the two things we all really need to live on will matter more than Wiis and Mitsubishi Shoguns. ‘

    A new term being coined for the coming world disorder is the Great Decession ( a combo word derived from Depression , Recession and Deception ) ๐Ÿ™

    ‘But as I said, I could be totally wrong.’

    Just like the rest of them eh ? Actually you make more sense than most of the convoluted gyrational offerings we are now reading in the mass media .

    When CNN or was it MSN starts the new year with a headline that Wall St has started with a ‘bang ‘ a rise in the Dow of just about 200 points you just have to know that the word from on high has come down to accentuate the positive and up with the hype ๐Ÿ™ So far Americans and investors are not buying . The world awaits the offerings of the new magician in the White House as the ‘evil wizard ‘ of the west heads off to clear brush sage somewhere in west texas.

  • It was Sammy Mc Nally what done it

    Greenflag

    yes – RTE and updating their website – I’ve given up getting annoyed about that – as BBC Norn Iron increasingly has ROI stuff anyway – I guess some lazy feckers from the Amalgamated Stevedores and Boilermakers and Longshoremen and Teamsters and Internet Updaters and Tram Drivers Union (a good acronym awaits) have them by the goolies.

  • Greenflag

    Iwsmnwdi,

    Almost right Sammy ๐Ÿ™‚ Actually it’s Gilmore’s crowd SIPTU – probably looking for treble pay for Sunday updating ๐Ÿ™ You would’nt mind double pay for the anti social hours )

  • Greenflag

    Let’s all hope for 2009 that Gordon Brown can persuade the British public that restoring the link with the Irish punt /euro will assist our cousins across the water to rejoin the ‘mainland ‘ and help to expedite economic recovery for all ๐Ÿ˜‰ even that the Little Britons of NI and not just the Newry border merchants .

  • A new term being coined for the coming world disorder is the Great Decession ( a combo word derived from Depression , Recession and Deception ) ๐Ÿ™

    No, the Great Deception was the credit fuelled ‘boom’ in the Anglo-Saxon world and other economies in close alignment over the past decade. The Republic had one of the most successful economies in the world a decade ago, and arguably the world’s most productive work force. It has all been pissed up the wall in pursuit of the idea that we could all get rich by selling one another buy to let investment properties to one another and letting them out to Poles who were in Ireland to build even more BTL properties.

    In Britain the BTL property frenzy wasn’t quite as silly, although it tried hard, especially in Northern England, but they don’t have nasty disciplinarian Franco-German bankers to but them in a fiscal bonne fessรฉe now either.