If ireland set its own interest rates?

Persius said:

It might be a better comparisson.

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I think 'optimism' is the only reason for thinking it might be a better comparison! But you are probably right, somewhere between the two would be a good comparison. Denmark has a low corporate tax rate like ourselves (albeit a higher rate). Though it differs from Ireland in being home to many multinational companies (Carlsberg! Maersk, Lego, Bang & Olufsen etc.) and in not having such an inflated property bubble as ourselves.

Small countries like Ireland cannot sustain an independent monetary policy - we could never set our own interest rates and we never did in reality even if we had the legal possibility of doing so.

If we were to opt out of the Euro the only option we would have would be to re-establish some kind of a link with Sterling. Going on historical data interest rates in the Irish market would be about 1% higher than those in the UK

Matt Cooper had an interesting article in the times on sunday, he basically said there needs to be a debate on whether we should pull out of the euro or not. The main reasons that it has not been as beneficial as some people thought it would be (ie our biggest trading partner is still outside it) and that it is out of kilter with our economy. You would have to agree with this but i suppose the problem is how would we fare by ourselves and from what I have read here not too well!!!

The UK is not in the Euro and has a much more robust currancy than the Punt ever was, yet it is fairing much worse that Ireland and the rest of the Eurozone in the current downturn. I would guess that if the Punt returned, its interest rate would be much higher than the Sterling one and the Irish economy would be hit harder than the UK.

Sweden has faired badly out of the decision not to adopt the Euro. The relative value of their currency to the old DM has halved since the introduction of the Euro.

leesider29 said:

Matt Cooper had an interesting article in the times on sunday, he basically said there needs to be a debate on whether we should pull out of the euro or not. The main reasons that it has not been as beneficial as some people thought it would be (ie our biggest trading partner is still outside it) and that it is out of kilter with our economy. You would have to agree with this but i suppose the problem is how would we fare by ourselves and from what I have read here not too well!!!

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The UK is our second biggest single export partner (after the US), but we export more in total to the eurozone (when you add all the eurozone countries together).

We import by far most of our stuff from the UK, so they are our biggest trade partner, but this is surely not a situation we want to continue considering we are being stiffed on this? Why should we be sourcing Dutch made fruit and veg., canned products etc. from the UK instead of directly from Holland? Next time you buy something, have a look at where it originates from!