Gavyn Davies on Ireland and EMU

Gavyn Davies has a good piece in the FT today. Some may respond that the deeper cooperation he calls for is politically impossible, but if that is the case then we have a real problem.

7 replies on “Gavyn Davies on Ireland and EMU”

Gavyn Davies writes:

If politicians want to preserve the monetary union (and it appears that everyone still does), they will need to come to an agreement under which there is some further fiscal co-operation between member states while the budgetary tightening takes effect in the periphery.

[italics mine]

Everyone? Not the vast majority of the Germans whose comments I’ve been browsing through this afternoon. And the Germans are the ultimate paymasters.
Davies is whistling in the dark.
A fiscal union? Dream on.

The Austrian comments were retracted immediately after they were made. The politicians are torn between pandering to the home crowd and throwing the PIIGS to the dogs or acting responsibly and coming to the rescue. A Portugese Minister also commented that Portugal should secede but his was seen as a ploy to pressure his fellow party members into facing reality.

The domestic statements of the portuguese Government officials have never been kind toward their brethren from the very early days of the sovereign debt crisis. Have never heard a word of understanding about the irish plight which was so helpful to the tourism industry in Algarve in days gone.

But I still share Gavyn’s and your main idea.

I was hoping that somehow Portugal, Greece and Ireland could develop a common and shared approach to the fiscal crisis. A common and shared adjustment programme that would minimize the performance risk of each country individually without harming the overall result in terms of the Eurozone.

Cannot agree more. The European project was said to have been built upon rules and not force. We have a real problem if all of a sudden the force becomes the decisive diplomatic and economic weapon.

All useful to drive down the Euro!

Anything the MSM says is not news, it is another salvo in an economic war, where the casualties are increased taxes to pay off debts run up in the Great Bubble!

Borrow only if you have no intention of repaying and then they will stop stuffing the goose!

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