THE POSSIBLE PRICE OF EURO EXIT
Jul 15th, 2012 by Conor McCabe
I was speaking at the CPI meeting on “Ireland After the Euro” yesterday and I said that in the event of a sudden collapse of the Euro, the effects on ordinary people would be biblical. The point was made that currency unions break up all the time and the example of the soviet ruble in the 1990s was cited. During the breakdown of the soviet ruble currency union the average life expectancy of a Russian male dropped by 4 years, that for a Russian female by 2 years. This is millions of the old, sick, poor and infirm wiped out virtually overnight. The euro is fast approaching its end, I believe anyway, but I’m not too sure that the Irish working class is organised enough to ensure that the price of that exit doesn’t fall on them, that it falls on the rentiers instead.
As I said, I don’t think the breakup of the Eurozone can be avoided at this stage, the structural faults within the Euro currency are too strong to be reformed, so I think it’s best to start thinking about how we avoid the human cost that comes with such a breakup. Interesting to note that the Icelandic people ensured that their social welfare safety net remained intact during the process of devaluation and re-emergence - we need to be working towards strengthening that net instead of dismantling it to keep private nursing home investors happy.
I agree it would not be easy. I think the school of “with one leap we are free” is a little naive. Some groups of workers would get their pay back to pre break up amounts. Many others would not.
From an employer point of view it would work. Most of the public service would be screwed, exceptions ESB maybe.A well this crisis is not local but universal.So I wonder what will happen elsewhere at the same time.I wonder if we are in a world of competitive tax reductions for the rich.
The rentiers, I wonder have they not moved their capital beyond reach a la Bono and co.
I am surprised that more is not being done or even raised about tax havens. Our rich “live” in tax havens. On a pan EU basis the tax systems would seriously improve if Monaco, Switzerland and the British ones were shut down. Our 10% tax rate thing is small by comparison.But if we are discussing equalising tax then surely we should deal with the havens first. Incidentally Gavin O’Reilly got his pay off sent to the Channel islands.
Conor,
Is it not difficult to distinguish the effects of the currency collapse per se from the more general breakdown - in economy, politics, and society - that occurred when the whole edifice of the oppressive, corrupt, and leaden communist system imploded?
i was just reacting to the line that the collapse of the currency union was a neutral affair.