As political dithering continues, it looks more and more likely that the euro zone will break up, if not completely, then perhaps with some countries being cut loose. Ireland is one of those countries, which may explain why the government is so diligently adhering to the terms of the troika agreement, and even going beyond it in the case of last week’s payout to the unsecured Anglo bondholders. It could be intended to placate those who will ultimately decide who gets kicked out : Germany and France.
In other words, Germany.
He argues that if any country leaves the Euro, it will cause a cascade effect leading to the disintegration of the the eurozone. Alternatively, if the Germans decide not to bankroll the system, the euro is also doomed, and Lucey argues that any sensible government ought to be planning how to deal with the consequences, which will be extreme. A sharp rise in the cost of imported goods and services. More expensive oil and gas. Savage cuts in government spending to create a balanced budget immediately. Big increases in the interest we have to pay on sovereign debt. High inflation.
The scenario that Lucey outlines would, in my opinion, cause widespread hardship and civil unrest, leading to an inevitable crackdown by government, limiting all sorts of civil liberties, including free speech. Websites like this one might not be permitted to exist in the harsh financial winter we face.
Read what Brian Lucey has to say and take it on board. He isn’t making it up.