March 22, 2011
1. A point of history:
Over the past 15 years, Ireland often has had a budget surplus, while France and Germany often were in breach of the Maastricht criteria, for both Debt and deficit levels (2003 and after).
Were France and Germany sanctioned for cheating their way? No Nay Never!
Was Ireland rewarded for its good behaviour? Again: never!
Now that Ireland has been in breach for the past 3 years, France and Germany are coming down hard on Ireland like a ton of bricks, making matters worse with a bailout interest rate that is punitive instead of being supportive.
2. Please correct me if I am wrong:
Being as the cost of funding is for the EFSF is 3% lower than what Ireland has to pay, this is not solidarity, this is exploitation: in a way, Ireland is working hard, while France and Germany get money for nothing.
One could say they are not giving us money. It is quite the reverse: the money is going from us to them.
German or French media seem to be utterly “unaware” of this. Who is right?
3. ECB rates have been toxic for Ireland.
The more peripheral the economy, the more “eccentric” or de-correlated with the European average it is, and the longer it may take to converge towards a Euro happy medium.
What definitely wreaked havoc on our economy are interest rates tailored to suit the bulk of the Eurozone economy, i.e. France and Germany.
Given the eccentric nature of peripheral Eurozone economies in the past 15 years, these rates have been completely irrelevant to these countries needs in terms of economic stability and sustainability. Their artificially low levels have exacerbated inflation and property bubbles in Greece and Portugal, but also mostly in Spain and Ireland.
So even if unwittingly, and certainly quite uncaringly, Germany and France are among the main culprits causing the current debacle. Yet it seems we alone have to mop up the mess with more punishment than support from fellow European states!