No, no, of course not, no, no way, not at all.
Voices on right and left insist that what is happening in Ireland is the fault of the EU and the euro.
Couldn\’t possibly be, could it?
Look Hutton, you\’re becoming an embarrassment to the alma mater.
Before the euro started, back when we were all still talking about whether to join EMU or not, there were people of right and left who actually got this right.
The euro area simply isn\’t an optimal currency are. For God\’s sake, even Gordon fucking Brown got this one.
The effects of changes in interest rates will be hugely different in places where the vast majority of housing is owner occupied (UK and Ireland) as opposed to rented (Germany, say). And hugely different where mortgages are floating rate (UK and Eire) as opposed to fixed rate (Germany).
In the former a lowering of interest rates reduces housing costs for almost everyone. In the latter it only changes costs for the marginal uptake of new housing purchases. Similarly, a rise in rates will lead to a huge reduction in spending power in the former model while having little effect in the latter. So whether it\’s boom or bust, the effects are greatly magnified in one type of economy: something of a problem when those rates are being set for the other type of economy.
Right back from the late 80s this was obvious. As it happened, it turned out to be the low interest rates needed by the euro core countries that screwed over Ireland (aided, yes, but not caused by, the local corruption and banking stupidity). But if it had worked the other way around, if Germany and France had been facing inflation and thus interest rates were set to reduce that, then Ireland would still have been screwed over. Just the other way: whether you\’re getting screwed missionary or doggy style you\’re still getting screwed.
Single currencies in non-optimal currency areas just don\’t work. Period.
And no, clever management by clever technocrats cannot be sufficiently clever to overcome this basic fact.