Ireland: A Symptom Of A Bigger Issue
In the short term, Ireland, predictably, will be bailed out by the Eurozone. It has to be. For a significant number of its problems have arisen from being within the Eurozone.
Yes, in the boom years, much of Ireland’s wealth stemmed from its European links. But at present, being part of the Eurozone has been a hindrance as much as a help. Compare it to the UK.
Since 2007 the pound has fallen by nearly 25% against other currencies. Ireland, as part of the Euro, has had to fight the crisis with a strengthening currency. It has not been master of its own economic destiny in the way that the UK has, having had no control over essential elements of its economy such as currency and interest rates.
Short term the Euro will live. But long term I wonder whether the PIGS may bring it down after all. Is economic union possible without political union? I honestly can’t see political union happening in Europe – the countries are fundamentally too disparate. But economic union without it, as the PIGS have proven, is seriously flawed.