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Is the euro fundamentally flawed?

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Looks like the Irish government has little choice but to accept a bailout from the EU, along with a few billion pounds from the British government.

I'm not an economist, but I have never really been able to work out why the Irish went with the euro in the first place.

I of course can see the convenience of having all the EU members using a single currency.

But when Ireland seen that the UK, who is its biggest trading partner decided not to go with the euro, why the heck did it go with the euro?


I was in Ireland a few weeks back and things didn't look good.

The Banks there, much like the Banks here in the USA made some really dumb choices. I think in part because they bought into the idea that "We've never had it so good."

Land and property prices which had soared sky high are falling and are expected to keep falling. Again much like as we have seen here in parts of the USA.

Unemployment is already at over 13%. With no sign of that falling either.

Things just don't look good for Ireland or the euro.

The euro is going to see more problems what with the messes that Spain, Greece and Portugal are in.

I might not be the brightest light on the Christmas tree, but something somewhere just isn't working and I kinda think the euro is partially to blame.


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You seem to be saying the economy in Ireland is having much the same problems that we are here, but of course we didn't go with the euro. :) Maybe it was a mistake to go with the dollar? :)


And how is the UK, which stuck with the good-old pound, doing in this mess? Is the economy there significantly better than in the US? I have heard about the economic situation in a number of countries lately (all bad, except for China, but they are going to pollute themselves to death), but I don't think I have heard anything at all about the situation in the UK.

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Yah, da problem with the common currency is that yeh can't hide your bad fiscal management behind a central bank smokescreen.


Used to be Greece, Spain, and Ireland when they got in their current mess could do what da U.S. is doing and just start printing money.


Now that they're on the euro, someone else is controllin' the printing press, so the government actually has to pay its debts, not print its way out of 'em. Of course devaluing your currency amounts to an across-the-board tax on your entire populace, falling most heavily on the working poor. But if you're lucky, it makes your exports artificially cheap, so it keeps people workin'. Of course they're workin' harder for less, but that's what they need to do anyway, eh?


Only difference is that when yeh devalue the currency it seems like "bad luck" or "hard times". When yeh can't devalue the currency it's easier to see the real cause: government profligacy.


Lots of us back when da Euro went in were predicting it wouldn't survive da first real recession for just this reason. Either the profligate countries would pull out in order to avoid bankruptcy/austerity measures or the stronger economies would just refuse to continue to be taken advantage of.


Nuthin' personal, Eamonn, but the Irish were fools, eh? They had all the benefits of a young, well-educated population suddenly put in a free trade zone with no barriers. They could have maintained solid growth had they only exercised a modicum of restraint durin' the boom. The Greeks, on the other hand...



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The Euro is a fundamentally flawed currency. They've tried to shoehorn together vastly different economies, working on different economic cycles. Interest rate are set by the European Central Bank, and can't be adjusted by individual countries to suit their needs. Outside of the Euro Ireland could have increased interest rates to cool its overheating housing market, inside this wasn't an option available to it.

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