For the sake of stability the Euro-wonderland MUST stop now !

The BBC is reporting that Ireland is informally approaching the Euro bailout fund given the large leap in the cost of Irish government debt. This is despite massive draconian cuts over several successive years, which has hitherto been praised by Brussels and has been foolishly used in the UK budget cut debate.

Now to deal with this first: it is stupid for either the right or left to use what is happening in Ireland as a model for the UK, for the simple reason that the UK controls her own currency and money supply, which can be used as a counterweight to any government cuts. Ireland, as a member of the Euro wonderland cannot use these tools to offset their increasing debt problems.

In fact I would suggest that being in the Euro was and is part of the problem in the first place, as the European Central Bank sets interest rates, not for the good of the Irish economy but for the good of the larger Northern European states  or as it would say for the good of the whole Euro zone - if you believe that then you are very naive (OK, I'll be less diplomatic and say Germany primarily) .

The second problem is that throughout the financial crisis/credit crunch of the past 3 years, governments have gone out of their way to save bondholders (but not, note shareholders) which is why these debt holders are now getting worried about holding Irish, Greek, Spanish debt to name but a few.

The third problem is that whilst Greece was in denial about the scale of the government debt and therefore stringent (or lenient- depends on your view) terms could be applied to any bailout. This does not apply to Ireland, who as noted above have passed several austerity budgets, even though total debt each year is getting to 32% of her entire economy. My worry is that the Euro fools will attempt to impose on Ireland what they did with Greece- totally unfair to the people of Ireland, given that her people have suffered already to keep bondholders happy. Whilst the Irish have so far (unlike the Greeks) not gone to the barricades, I fear any further deep cuts at this present time and being in the Euro will crush the Irish economy to the point that people feel that they have no option and  social /political stability will be affected.

So what are the solutions ? Let me not mince my words :

1) .I think that Ireland should immediately exit the Euro and adopt the Punt once again (not a crazy idea as most Irish exports still go to the UK, so a devalued currency will be a help in this instance).

2) . The bondholders need to wake up and smell the coffee and realise that they totally misjudged the Euro and the various governments in it and that they should be prepared to take a hefty 'haircut'.

3). An appropriate bailout loan from the IMF should be granted to help Ireland through the immediate short term crisis which 1 and 2 would create .

4) On a European level, the Euro needs to be got rid of or at least reformed to what it has now become, a de facto European German Mark. If this means having only the Nordic countries, Holland , Belgium, Germany and possibly France in it, so be it .

5) The whole Euro fantasy project must end. The elites of Europe must understand that I am still English, the Irish are Irish and the French will always be the French. Whilst all of our nations wish to live in peace and do not want to see the likes of the world wars again, this does not mean slavish adherence to the Euro mad project is the way to achieve it . If anything, the best solution for the people of Europe is to have a loose economic association in addition to the full support of NATO. We do not need European wide courts, Europeans directives and the like. The drive for a one European government must stop.

Right, now I have put one part of the world to rights, I'm off to put my jacket potatoes into the oven.

best LL