Douglas Carswell's Blog

Ireland - decouple and default?

If you only have time to read one blog this morning (besides this one, of course), make sure it is Andrew Neil here.

"Nobody I know who follows these matters closely" he writes "believes the Irish bail out will solve the European debt crisis."

Indeed.  This is not over.  It's barely begun.   

The bail out hasn't removed anyone's debts.  What it has done is increase the amount of money that Ireland owes others.  And - because the Euro is a debt, as well as a currency, union - increase the number of "debt dominoes" lined up to fall.

Ireland has reached the point beyond which she is able to pay back what she owes.  She can either spend miserable years trapped in debt, high taxes ensuring her people are unable to enjoy the fruits of their own labour.  Or, she can decouple from the Euro - and default.  And, rather like Argentina did a decade ago, begin growing again. 

I know which I'd choose, and I suspect it'll happen eventually.  But not until politicians have caused much misery trying to do otherwise.

Some fear that decoupling and defaulting would make it impossible for Ireland to ever again borrow mountains of money.  Yep.  How is that a downside?

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