November News for ICON Magazine - Throwing bad money after bad

Ireland have just received a mass bail out from the rest of the EU, including Britain who have had to pay around one eighth of their overall debt which equates to about £7 billion, no wonder the students are rioting after being told their tuition fees will be at least doubling.

George Osborne, the Chancellor of the Exchequer told the House of Commons “it is in our national interest that we should be prepared to help them at this difficult time.”

“Them” of course being Ireland and not our very own citizens who are asking for an education, which of course was free to all the aristocrats that are now enforcing these, absurd increases.

It seems that the continent united by the euro is in complete chaos making it difficult to see why a single currency that accumulates every country’s debit was introduced in the first place. So what is the future of the euro? Can it survive?

With all the negative news surrounding Europe at the minute, it is hard to imagine the euro can realistically recover however, as the total debt is not outstandingly high compared to countries like China, there is hope for the currency yet. What is damaging its chances of revival is lack of a clear plan of action. The wayward countries are being handed bail outs by the billion but there is no apparent scheme to stop this happening in the future.

With Ireland’s massive a fiscal deficit, Britain essentially created an unsupported loan. So essentially we will see nothing in return for our £7 billion, and more over, two years ago Ireland imposed big public spending cuts, which they claimed was meant to help re-boot the economy – that went well didn’t it?

Mostly this deficit has been brought on by Ireland’s lack of foresight. When the country took on the euro they were given a fund to help with developments in the cities, as long as the improvements were still “under construction” the money kept coming in. As Ireland aren’t stupid they decided to drag out the work for as long as possible thinking that they would get away with it, but the EU finally had enough and stopped the funding leaving them in this impossible position.

So which country is next? Portugal, Spain and Britain are all facing even more financial humiliation in the next few years, and the only way to prevent this is by exporting goods and kick starting the countries economic growth. Ireland’s exporting list consists of the Guinness that isn’t consumed before it leaves port and Bono, and one avoids paying tax so it is easy to see why they’re struggling.

Incidentally the irony lies in the fact the minimum sum of £7 billion that Britain is handing over to Ireland to help prop up the euro, is the entire amount the country would be saving due to the welfare cuts, and in no way will it help the Irish economy recover. We’re lending money we don’t have, to a county that can never repay it, in order to try and stabilize a currency that helped cause the economy collapse in the first place due to countries like Ireland and Greece trying to fleece the EU and write off its own debt.

So, is there a right way to handle the situation in Ireland? Of course there is, however a bail out is not what the country needs at the minute. If Ireland admitted that the euro was a failure, and in turn started a new currency effective immediately then its debts would diminish and more to the point, the euro would start to recover instantaneously.

Lord Young has been heavily criticised this week for down playing the recession and suggesting that “most people have never had it so good.” This shocking announcement came whilst at lunch with a journalist, talking about the economic state of Ireland he indignantly blurted out his feelings surrounding the recession and the “loan” to our neighbours.

Cameron has however said that there will be a revision of plans for £162m in cuts for sports budgets each year. This was reviled shortly after 75 Olympic champions, including Tessa Sanderson, campaigned against the cuts citing concerns over children’s health.