Euro crisis: “This requires a political as well as an economic understanding of the dynamics in play at European and national levels”

In identifying three alternative European solutions, rather than the “lethal injection” of unilateral action by Ireland, Paul Gillespie in the Irish Times highlights the wider issues in play.

IRELAND BADLY needs a strategy to handle the euro zone crisis, rather than reacting defensively to all its latest twists and turns. This requires a political as well as an economic understanding of the dynamics in play at European and national levels.

Most economists here are ill-equipped to provide this because they take too little account of the politics involved and often grossly underestimate the social costs of unilateral action. They gain the limelight because alternative approaches are rarely proposed or debated. [added emphasis]

These should involve analysis of the crisis, proposals to tackle it differently and ways to create EU alliances of those with similar interests. Inevitably this draws in left/right politics as well as the interplay of national interests. Both dimensions need to enter the debate on Ireland’s growing indebtedness, how it links up with that of the euro zone as a whole and what are the best ways to create an alternative strategy.

Read the whole thing.

Better hurry up though.

Because it’s “squeaky bum time” ahead “in government buildings all over Europe”.