Douglas Carswell's Blog

Not so wrong after all ....

The Telegraph's Jeremy Warner brushes aside my suggestion that Britain would be better off helping Ireland leave the Euro, rather than bailing out the Euro. 

He does so on the basis that Britain needs a strong and stable Ireland.  I, too, believe a prosperous Ireland is in our interest.  But that is precisely why I suggest Ireland should leave the single currency.

A common monetary policy gave Ireland a reckless boom.  Now with the bust, Ireland cannot become competitive without a catastrophic fall in living standards.  How does that help our closest trading partner?

It is true that not all boom / busts are a consequence of Euro membership (see Iceland or the UK).  However, monetary union more or less guarantees boom / bust on the edges of Euroland. 

Failure to bailout, suggests Mr Warner, would place British banks in difficulty. It is precisely because of what still lurks on our banks balance sheets that we would be wise to hang onto any spare billions for what lies ahead.

Britain might not be part of the Euro as a currency union.  The Irish bailout means we are in effect members of the Euro as a debt union.

Mr Warner is right when he suggest that Germany “does not want to be permanently on the hook for bailing out the feckless fringe.”   If we follow Mr Warner’s advice, we will ensure that they aren’t.

Weirdly, Jeremy concludes his article by saying a “mechanism for voluntary exit” is "urgently" needed from the Euro.  So after a thousand words or so, Jeremy more or less comes the same conclusion I reached in line one.

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