well we need a few hundred thousand people fast and from another country just for a bit of diversity ( no offence intended to our polish friends ) . preferably the blonde women who like to party, thanks. imagine , there could be whole housing estates full of blonde icelandic women in leitrim and west mayo . might stimulate the local economy a little
btw , im not making fun of the horrendous and rapid shafting the majority of icelanders have just experienced
If there were some country with 300,000 empty houses, that could offer the ENTIRE POPULATION of Iceland a home & citizenship, & in return Iceland would sign over all its natural resources. Last one who leaves turns off the lights
Now if only there was a country so fucked up that they had enough empty houses to rehouse an entire country
Having very fond memories of a long week-end in Iceland about 10 years ago, I suggest we find out the destination of choice for the Icelandic women and then we can all go there aswell! Two birds, one stone! Or better still, quite a few birds!
The euro got us into this. If we had been able to set interest rates we could have put the brakes on the speculation bubble long since. The euro meant no brakes when we could plainly see the black ice ahead.
That wasn’t the only set of brakes available to us. The central bank could have set out strict guidelines regarding what was allowed. But they didn’t - presumably because they were told not to. But you’d be mistaken to be thinking that the punt would have saved us. Brakes are only any good if there is somebody there who is willing to step on them.
There were two options in terms of interest rates available to us if we had kept the punt:
Keep interest rates high, avoid a bubble, destroy exporters as the punt would have appreciated massively relative to other currencies (like the Icelandic krona did). Our banks, unable to make money at home would have used the massive cash inflows to go on spending sprees in other currencies building up huge debt (like Iceland did). Mortgages would have become carry trades with mortgages in low interest foreign currencies leaving us now in a position of a collapsing punt, still high interest rates at home to stave off import inflation and huge increases in the costs of servicing debt (like Hungary). Iceland, Hungary, the Ukraine - pick any one of them.
Follow the euro interest rate to keep competitive for exporters (like Denmark did). Same property bubble (like Denmark had). And then the currency comes under pressure anyway requiring a hike in interest rates at exactly the wrong time to protect the currency (like Denmark did).
Do look around at the countries that were also given a choice and chose not the euro before you say with what we should have done.
I meant the only protection we have now is the euro as that’s what we have today and hopefully will have in the future - sidestepping any arguments about whether it would be better or not to have joined it in the past, since that’s a whole other tired debate, often involving fish and innumeracy.
And at the same time, Australia had a housing bubble with interest rates much higher than the eurozone. And Britain’s housing bubble in the late 80s happened at a time of fairly high interest rates, relatively speaking.
Interest rates were not the cause. Degregulated banking with lax (or nonexistent) credit criteria, toothless regulators and a casino mentality are what caused all this mess, whether in Ireland, Iceland, Denmark, Britain, Oz or anywhere else.
Hence, IMO, whether we were part of the euro or not over the last 7 years is largely irrelevant.
Everything happening now all around the world was pretty much inevitable once the financial deregulation started in earnest with Basle II. 1986, was it?
Professor Milton Friedman came to Iceland in 1984 to give a lecture at The University of Iceland. This is an interview with him on Icelandic State Television. The setup is interesting, with Friedman are three radically left-wing scholars who criticize him each at a time for everything from monetary policy to drug policy. One of them, Ólafur Ragnar Grímsson, is the current president of Iceland.
*This may not interest everyone. (starts in Icelandic for a minute and then switches to English)