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Dublin: 11 °C Wednesday 22 May, 2013

Europe sleepwalking to economic disaster, say experts

“Euro will disintegrate” unless there is “significant burden sharing” between member states, warn economic experts.

Image: Michael Probst/AP/Press Association Images

THE EU IS sleepwalking to economic disaster and the Euro is doomed with “incalculable economic losses and human suffering” according to an extraordinary new report by a leading group of economists.

“”We believe that …Europe is sleepwalking toward a disaster of incalculable proportions. The sense of a never-ending crisis, with one domino falling after another, must be reversed,” the Institute for New Economic Thinking, which is backed by veteran investor George Soros, said.

Two members of Germany’s Council of Economic Experts and leading euro specialists at the London School of Economics were among the experts who c0-authored the report.

Among their recommendations, they urged an early, temporary mutualisation of debt, which Germany has ruled out, and for the European Central Bank to become a lender of last resort in the longer term.

“A successful crisis response must be collective and embody some burden sharing across  countries. Absent this collective constructive response, the euro will disintegrate.”

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Comments (41 Comments)

  • Phillipa 25/07/12 #

    JTHM

    No complaining or fist waving I was just making a comment on the belief that we would be better off governed by someone else. I completely agree that the turkeys will never vote for Christmas and things will only change when the people of this country call for it.

    Reply
  • Bloody experts with their facts, common sense and intelligent solutions. Do they not know theres bankers gambling debts to be covered?

    Reply
  • Fagan's 25/07/12 #

    It was inevitable from the 1st day that this lunatic’s charter was implemented. France and Germany are diverging in the Euro, never mind Germany and the rest.

    The reason that the currency was doomed to failure is that the members are not willing to do what it takes to ensure its survival, which is fair enough, sharing the misery on everyone’s head is not sustainable either.

    Time to break up the currency before economic reality forces it apart in a very brutal fashion.

    Reply
  • Sleepwalking?
    Nah, this is a calculated and orchestrated manoeuvre to push through the federal dream, every step, every treaty is dressed up as some economic agreement which will eventually lead to more and more secession of national sovereignty to the EU.

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    • Bunracht na H eireann , don’t dilute it .Use it . you are spot on , on what is going on .

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    • “Our predicament today is that without economic growth, our “exponentially based system of money and debt” rapidly goes tits up. Hence, the ever more frantic screams for economic growth from our lords and masters as they grapple with, and foresee the consequences of economic contraction on our unsustainable “exponentially based system of money and debt.”

      So, over time debt-based money grows exponentially due to interest (an immutable feature of the system). As/when loans can’t be serviced (like now), the accumulation of debt also “goes exponential” over time.

      Hence the increasingly ridiculous sums of (printed) money now being bandied about as being required to bail out our totally fcuked system (too much fiat money debt and not enough economic growth). Chasing an exponential function requires chasing something to infinity: hence £5 billion, becomes £35 billion, becomes £100 billlion, becomes £650 billion becomes….”

      Former Pfizers VP, Chris Martenson, explains the nature of the economic crisis and why governments & central banks can do little more than postpone the eventual collapse.

      http://www.peakprosperity.com/crashcourse

      Reply
    • JTHM 25/07/12 #

      @ Dermot – I feel you’re giving the powers that be far too much credit. What we’re seeing is the result of lazy thinking, short-term planning, quick fixes and botch jobs. I don’t believe that there is a grand conspiracy or master-plan as I just don’t believe the various European leaders are competent enough to implement one.

      Reply
    • Fagan's 25/07/12 #

      The problem is that the people at the top want a full European Union, they ignore that the Euro is a fatally flawed currency and that it has proven to be an epic mistake. However they refuse to do what is in Europe’s long term interest because it does not suit their vision.

      If the debt crisis is resolved, then the Euro faces the long term crisis of how to manage the massive divergence in the economies that it has led to. If Italy and Spain are to stay in the currency, then there is going to have to be a permanent and massive cash flow to them, to compensate for that. This is expected to run in to hundreds of billions a year. This would be without end, Italy and Spain and others would be agreeing to permanent long term stagnation for their economy.

      Reply
    • JTHM 25/07/12 #

      Some of the people near the top don’t want this, and power fluctuates.
      More importantly, you’ve outline the problem, you’re half-way there. But you also need a viable solution. What would you do to improve Ireland’s situation?

      Reply
  • Weren’t we doing just fine before this whole Euro malarkey!

    Reply
  • I think it is all part of a plan get a federal Europe. The whole financial system is a Ponzi scheme. It requires growth every year just so the interest can be paid on debt. Money is printed out if things air and it can never be paid back. At some time the whole thing will go kaput. I for one buy some bars of metal whenever I have done spare dosh.

    Reply
  • The important thing is, you are here, but can you hear the sound of us not listening?

    Reply
    • JTHM 25/07/12 #

      A honest cabinet member. I’d take a picture as I don’t think I’ll see another for a while..

      Reply
    • We really going places ,it’s brilliant to see a way forward . Thousands interested.suppose negativism to b expected from the synics who do nothing but complain.so fingers out of ears.

      Reply
    • censored 25/07/12 #

      Eilish, surely you should be seeking to persuade people not alienate them – or is your real constituency actually that small?

      The first turn off for me is the semi-Orwellian name, and in the Irish language to boot! I’ve looked at your website, and it’s hard to see what you’re offering in terms of a way forward.

      Reply
    • Agree Censored, the Irish language bit put me off straight away when the majority of voters won’t know what it means and using the letters of the Swedish Nazi party SNF didn’t do much for me either. Had a quick look through their site but it no more represents me than FG/FF/Lab do.

      Reply
  • The ECB needs to become the ultimate firewall. A central bank is normally a lender of last resort whereby they buy bonds and print money. This needs to happen otherwise the Euro will collapse. Bond purchases can be sterilized to eliminate the inflationary effects.

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  • The Germans have obviously no memory of the second w.w.when bailed out by Marshall plan or no memory of fact that they were given 70 years to pay back.the calamity of this disaster has been looked upon by the usual band of accounts and economists who think we can turn a corner in 5years.lets stop paying them back until they come up with a workable plan

    Reply
    • JTHM 25/07/12 #

      Before you make assumption about “the Germans”, maybe you should speak to a few of them first.

      Reply
    • JTHM 25/07/12 #

      Any why is it up to “them” to come up with a better plan? We’re not children. If we want to solve our country’s problem then we should come up with a better solution rather than sitting about like lazy teenagers, moaning and waiting for someone else to solve our problems for us.

      Reply
    • Fagan's 25/07/12 #

      The 3 biggest defaults of the last 100 years were all by Germany. Unfortunately they have missed the lessons on what radical austerity and cuts does to economic growth and social fabric of a country.

      The problem also is that if Germany and France, act according to normal business practices, then they too will be in bailout territory. German banks are the most highly leveraged in the world, they are in reality insolvent and when Germany bails them out, it too will be insolvent.

      The Euro noose may have tightened on the periphery first, but it will swing the core as well, it will just take a little longer. This continent size crisis would never have developed with individual currencies.

      Reply
    • censored 25/07/12 #

      It’s up to “them” in this instance because we are bankrupt. I can’t see Germany favoring any plan from the bankrupt countries, so it will have to come from them.

      Reply
  • I’d take the ECB and the Commission anyday over the incompetent losers that have ruled Ireland since 1922.

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    • JTHM 25/07/12 #

      On this, I’d agree with you. Of it comes down to ridiculously incompetent governance by the Irish government or generally incompetent governance by a European government, I’d choose the crowd of self-interested elitists who can make the trains run on time and are at least honest about their dishonesty.

      Reply
    • God forbid we would force our government to change, much easier to had that power to someone/anyone else.

      Reply
    • Phillipa 25/07/12 #

      Kingstown.
      God forbid we would force our government to change, much easier to had that power to someone/anyone else.

      Reply
    • Fagan's 25/07/12 #

      Why?

      Do you honestly think that the EU/ECB will give a toss about this country. When it comes to a German or French official looking at what will benefit or cost their people over this one. They’ll see the Irish people, how they take every beating that can be throw at them, right or wrong, they’ll take it. They’ll look at the German people or the French, or the Dutch and they know that the people there won’t let themselves be walked over.

      The only people that will look after this country are the people of this country, that applies to every land in the world. Expecting London or Brussels or Washington to care for us, for some unfathomable reason, is just a cop out.

      Sheep get penned, no matter who is herding them.

      Reply
    • JTHM 25/07/12 #

      @ Phillipa – for all the complaining and fist-waving, no Independent or opposition TD has called for a vote of no confidence in this government, so it’s quite clear that, for all the talk, there has been and currently is no realistic attempt to change this government. So, for all the “God forbids”, people should put their money where their mouths are, stop complaining and instead take some action. Lobby your TD for change, they were elected to voice your opinions and protect your interests. If you don’t believe change will come internally, it’s quite reasonable to choose an external alternative.

      Reply
    • JTHM 25/07/12 #

      @ Fagan’s – and how is that any different to the current and previous Irish government’s except that we must take responsibility for electing them to power? At least the governments of other countries don’t pretend to have our best interests at heart. Unlike our government, they’re honest about the lack of sympathy, and, in their position, they’re not wrong. We have the leaders we voted for, we are responsible for putting them in power, we haven’t taken any practical steps to remove them from office, so more fools us and maybe we should stop shifting the blame onto others when we should shoulder it ourselves. Apologies, I forgot that the upstanding Irish citizenry can do no wrong and all our problems are put onto us and never caused by us.

      Reply
    • Fagan's 25/07/12 #

      Jthm. Did u even read what I posted?

      Reply
    • JTHM 25/07/12 #

      @ Fagan’s – Yes, and I was agreeing with you! But I can see the problem, a bit too much “ranty” voice on my side, apologies.

      Reply
    • censored 25/07/12 #

      Why do you think foreigners will be more competent, or more interested in our welfare?

      Reply
    • are you serious ? dear god above…..never heard such a stupid comment in my life…at least our leaders were elected by the people, the commission is not even elected by the people, Van Rumpuy and Ashton also not elected by the people ……so you are into dictatorships ? You Barroso was a communist in his younger days in Portugal

      Reply
  • The only way u can get change is thro the ballot box. What u doing . Why not join .

    Reply
  • If people are merely concerned about the name then I think they really don’t have a prob.read a bit more .the policy page is good .who would have thought a name like ” ourselves” would get so far

    Reply
  • Look up http://www.sli nios fearr.com. We are doing something

    Reply

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