Irish Economic Crisis: Will Ireland Leave Europe and Join the United States?

Nobody knows what is coming next, but one thing is clear: Ireland is rudderless and adrift in mid-Atlantic. We are looking for a bailout. And it appears that we are drifting towards Washington.
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The mood here in Dublin is one of disbelief. Only 24 months ago Ireland was ranked as one of the wealthiest countries in the world. Now we are bust.

Amid the panic, radical ideas are being seriously mooted by serious thinkers: Former bank chief Mike Soden and writer Frederick Forsyth have even suggested that Ireland should become a protectorate of the United States. A prominent British commentator and politician, Daniel Hannan, has suggested that Ireland should re-join the British pound.

All this is happening as financial "special forces" teams from the International Monetary Fund, the European Central Bank and the EU are being parachuted into Dublin to arrange the details of a multibillion-euro bailout for the stricken Irish economy.

The EU is scared: EU President Herman Van Rompuy on Tuesday warned the world that the Irish debt crisis is spreading to throughout Europe and could take down the EU and with it the postwar order in Western Europe: "We are in a survival crisis," he said. "We all have to work together in order to survive with the euro zone because if we don't survive with the euro zone, we will not survive with the EU."

British finance minister George Osborne has offered strong support: "Ireland is our closest neighbour and it's in Britain's national interest that the Irish economy is successful and we have a stable banking system. So Britain stands ready to support Ireland in the steps that it needs to take to bring about that stability."

Here in Dublin the autumn leaves are falling from the trees. Winter has begun in earnest. The traffic passes by the window as normal. Yet there is an awareness that things will never be the same again.

Dr. Morgan Kelly, one of the country's leading economists, recently struck a deep and dissonant chord with the Irish nation a few weeks back:

"As ordinary people start to realise that this thing is not only happening, it is happening to them, we can see anxiety giving way to the first upwellings of an inchoate rage and despair that will transform Irish politics... Within five years, both Civil War parties are likely to have been brushed aside by a hard right party..."

Nor does Dr. Kelly see any way out for Ireland: "I have to hold up my hands and confess that I have no solutions, simple or otherwise... we are no longer a sovereign nation in any meaningful sense of that term. From here on, for better or worse, we can only rely on the kindness of strangers."

In this analysis, the only question is whether we receive our help from Brussels or Washington: The EU or the IMF.

However, the EU may be part of the problem and not part of the solution. Not least because the Irish people are tiring of EU over-regulation and its threats to take away more of our sovereignty as well as the 12.5% corporate tax rate which has attracted so much American investment to Ireland.

Daniel Hannan says "Ireland's position has become calamitous: debt and unemployment are rising, prices and incomes are falling. GDP is down by an almost unbelievable 20 percent from peak." Mr. Hannan says that the "really bad news" is that "these problems will carry on for as long as Ireland is in the euro. Bailout or no bailout, Ireland's economy diverges cyclically and structurally from Continental Europe."

And this is not just an Irish problem. Ireland could be the next Lehman brothers, with shockwaves resonating around the world. In Britain, lawmaker Peter Tapsell stated that the "potential knock-on effect" of the Irish crisis "could pose as great a threat to the world economy as did Lehman Brothers, AIG and Goldman Sachs in September 2008."

Nobody knows what is coming next, but one thing is clear: Ireland is rudderless and adrift in mid-Atlantic. We are looking for a bailout. And it appears that we are drifting towards Washington.

For more info on the Irish crisis goto NewsWhip.ie

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