View more on these topics

Ireland should split from eurozone rather than accepting bailout, says MP

Ireland should be helped to decouple from the euro and default on its debts, according to a Conservative MP.

Writing in today’s Guardian, MP for Clacton Douglas Carswell says that the move would be better for Irish growth prospects than the €90bn bailout currently being negotiated by Ireland, the EU and the IMF.

He writes: “We should change course and prepare to offer a dramatically different solution – help Ireland decouple from Europe and allow the country to default on its debts.”

He adds: “Instead, we are sinking billions into a temporary rescue of the euro that will prolong Ireland’s economic misery.”

Carswell writes, citing Argentina as an example, that decoupling from a currency and defaulting on debts had worked for other countries in the past.

He writes: “When the peso was decoupled from the dollar in 2002 and Argentina defaulted in 2002, it was free to grow again. Argentina has since been chugging along at an enviable 7 to 8 per cent annual growth each year since.”

He said the low interest rates set centrally by the European Union had “plunged Ireland into the economic abyss”.

Ireland will later today unveil a four-year austerity plan which includes cuts of €15bn.

He said: “Diehard euro advocates might ignore reality, but if Ireland had had interest rates set according to the needs of the Irish economy rather than wider eurozone, it would not be in this credit-fuelled mess today.”

Carswell also said the current European treaty puts the UK at risk of potentially unlimited eurozone debt liabilities and makes Britain a member of the euro as a “debt union”.

He writes: “Thanks to the small print of our existing treaty obligations, should Portugal, Spain, or even Italy now seek a bailout, our potential liabilities would be unlimited.”

He adds: “Allowing the break-up of the euro could prove less ruinous than paying to keep everybody in line.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com