If ireland set its own interest rates?

Z

z106

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Out of curiosity, can anyone hazard a guess out there as to what interest rates would be in ireland if we were setting our own interest rates as opposed to teh ECB?
 
Given that our currency would have collapsed they would probably be very high.
 
I think our interest rate was around 7% before the euro. I'd say we'd be looking at 10%+ if we were outside the eurozone.
 
Even is talking about the possibility of leaving the Euro. Can't understand how we can even comtemplate it TBH. What happens to all debt/mortgages, do they get converted back to the punt (or what ever we create)?
 
tiger said:
Even is talking about the possibility of leaving the Euro. Can't understand how we can even comtemplate it TBH. What happens to all debt/mortgages, do they get converted back to the punt (or what ever we create)?
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He always makes interesting comment, but this article was one of his weakest. Have a look at the comments on it on his website, as they give good argument against his idea that leaving the Euro would be a good idea.

If we were to leave the Euro, money would race out of the country like rats ahead of a tidal wave. We made our bed, and we must now lie in it. If our government take the right decisions, the bed might be made a little more comfortable.
 
Many of DMcW's points seem to be made largely or purely so that he can come up with some catchy/witty neologism...
 
For those....................:D

neologism

Main Entry:ne·ol·o·gism [broken link removed]Pronunciation: \nē-ˈä-lə-ˌji-zəm\ Function:noun Etymology:French néologisme, from ne- + log- + -isme -ismDate:1803 1 : a new word, usage, or expression 2 : a meaningless word coined by a psychotic
— ne·ol·o·gis·tic [broken link removed] \-ˌä-lə-ˈjis-tik\ adjective
 
I would be happy if Ireland left the Euro, as long as I can keep all my savings and investments in euros. I can then sit and watch as the new punt slithers down - it will be like visiting a third-world country
 
it's a bit of a useless question as if Ireland was setting its own rate the whole time, it would have been higher all along, and so the property market would not have inflated so much probably!

all hypotheticaal of course ;)
 
gravitygirl said:
it's a bit of a useless question as if Ireland was setting its own rate the whole time, it would have been higher all along, and so the property market would not have inflated so much probably!

all hypotheticaal of course ;)
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Probably not. With the major currencies of the world dropping their rates following the dotcom bust, Ireland would have followed the same course (or had a stinking recession caused by an over-valued punt).

I think it is true to say, however, that rates would be much higher now, just look at Iceland:
[broken link removed]
15.5%

(I think it is a fair comparison - island nation on the edge of Europe, small population, currency not converging with the euro, i.e. not in an exchange rate mechanism like the accession states).
 
yoganmahew said:
Probably not. With the major currencies of the world dropping their rates following the dotcom bust, Ireland would have followed the same course (or had a stinking recession caused by an over-valued punt).

I think it is true to say, however, that rates would be much higher now, just look at Iceland:
[broken link removed]
15.5%

(I think it is a fair comparison - island nation on the edge of Europe, small population, currency not converging with the euro, i.e. not in an exchange rate mechanism like the accession states).
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And apparently support for joining the Euro has risen dramatically there too, as people are sick of the currency volatility.
 
An interest of 4.25% is not high. The problem was we were living in a 2% La, La land for far too long and we accepted that as The Rate. After a year or two of rates between 4 – 5.5% that will become the rate and we will have adjusted accordingly.

Just looking at how many people lost the run of themselves over the past few years I think there is a strong case to be made for a mandatory money & debt management subject in School.
 
tiger said:
Even is talking about the possibility of leaving the Euro. Can't understand how we can even comtemplate it TBH. What happens to all debt/mortgages, do they get converted back to the punt (or what ever we create)?
Click to expand...

Debts would remain in Euro, I guess you could convert your debt at some stage though if your bank was willing or able to facilitate doing so.
 
yoganmahew said:
Probably not. With the major currencies of the world dropping their rates following the dotcom bust, Ireland would have followed the same course (or had a stinking recession caused by an over-valued punt).

I think it is true to say, however, that rates would be much higher now, just look at Iceland:
[broken link removed]
15.5%

(I think it is a fair comparison - island nation on the edge of Europe, small population, currency not converging with the euro, i.e. not in an exchange rate mechanism like the accession states).
Click to expand...

Anyone know what the rate in Denmark is? It's a small (somewhat) peripheral EU state, joined the EEC in 1973 (like us), but opted out of the Euro. It might be a better comparisson. Or at least we might be somewhere between the two
 
Denmark a probably a better economically located country than Ireland, easy access to trading partners to the south and north.

But anyway while it's not a euro country, it's currency has been pegged to the euro, so while they've a choice in what they do with interest rates they still have to base their rates on euro rates. Tend to be a little higher.
 
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