Ireland: More on the facts
David, I remember your public speaking not that long back, just before the crisis finally broke: you were sure there’d be a reckoning for all the private Irish debt v German savings, you sensed there was trouble ahead, but you were unsure about when. Others had similar fears, you voiced yours clearly, but it was not a forecast as such, and you occasionally expressed doubt, given what seemed like gravity-defying property prices. Your fears were based on something more sophisticated than “what goes up must come down”, though not sure if you saw the tsunami building in the US. Maybe you did.
If so, so did one Australian former banker-now-economist I know. Still, remember the analysis then and on this you were far from being alone: Ireland had built up an awful lot of private debt and this exposure had made it vulnerable for some time. It is unclear to me if not repaying the part we are not responsible for (and defining that amount is not easy) would really make a huge difference. It is not all someone else’s fault. As for role models, if the system is bust, let’s try forging a new one, with less-leveraged borrowing and more domestic investment in social and business capital. The idea is to “emerge” from the crisis in a better place. Default may be one way, and Ireland could well move on. But there may also be other ways. Nor is blaming Europe the answer, for Europe has also lost the plot, been ripped off and needs to be reshaped. The debate should be taken Europe-wide.
blog comments powered by Disqus
