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Solution to Ireland debt crisis

Posted by DSK on May 17, 2011 at 20:04:20:

In Reply to: re: what would happen to Ireland if we default? posted by Profit of Doom on May 15, 2011 at 15:50:55:

I think people understand now the party is over. But there is a clean up job needed, before the credit runs out in 2013.

1) Temporarily leave the Euro (5 yrs)
2) All debt is transferred into Irish Punts at 1.27 / 1.
3) Devalue Punt by 50% this will allow government to continue to pay the highest social welfare in the world, and the highest public sector wages in the EU
4) Reduce deficit to 0%, by quantitative easing with the devalued punt. Run the 0% deficit for 5 years and then return to the Euro at this stage exchange rate will probably be 0.27 / 1 making Ireland one of the most competitive countries in the world.

major side affect is we won't be able to afford foreign goods. But that may not be a bad thing, Multinationals will flock to Ireland because they sell their goods in the EU, Ireland is a small open economy. Unfortunately no one has the stones to implement the above.

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