After Greece and Ireland, It’s Now Portugal!
There is a lot of opposition to bailing out Portugal in the UK. We should always remember wha happened to the British economy when Denis Healey went to the IMF in the 1970s. We got the money we needed, but we had to bring in some very unwelcome policies under IMF supervision.
So shouldn’t the same rules apply to Greece, Ireland and Portugal? Isn’t there an old phrase about the person paying the piper calling the tune?
I’ve just returned from Greece and it is a country in turmoil. But then I’ve hardly ever been to Greece without suffering some form of labour dispute. Because of its history and weather, it has a lot going for it. But a lot of it requires investment in infrastructure for which it doesn’t have the money.
I must ask the question as to whether the money that has been pumped into Greece has been used wisely?
I have had no experience of Ireland in the last few years, but the Irish still seem to find the money to spend on racehorses. They want to renegotiate the bail-out conditions on the one hand and on the other they still have a low rate of Corporation Tax, to which many countries object. So perhaps the most important condition in the bailout of Ireland hasn’t been applied.
In some ways loaning money to Ireland is in our interests, as a lot of it will come back in the purchase of goods and services, as our two countries are very economically entwined. But again we didn’t seem to apply any obvious pressure on Corporation Tax.
With respect to Portugal, which used to be known as our oldest ally, we don’t really have any great economic interests in the country. I suppose the one problem we do have in Portugal and Spain is the large number of ex-pats, who have bought properties there. So if either went bust and we didn’t help, then there might be quite a few votes down the drain.
After all, the only reason we bailed out the stupid people, who put their money in Icelandic banks, was to buy votes.
So on balance we should probably help with Portugal. But only on our terms. After all, if China or the United States was to bail out any country, they wouldn’t do it without a lot of self-interest.
The Anonymous Widower 
My knowledge of economics is weak. However, I can see that the horrible cuts we have here are to prevent us ending up like Ireland, Greece and Portugal, who by my limited understanding were almost bankrupt. However our children are adults, we have no mortgage or loans, and pay off our credit card in full each month. I guess I would feel differently about UK cuts if I had a huge mortgage, several children etc
Comment by liz | April 8, 2011 |
We don’t have any choice but to lend our share of the money to Portugal as the last government signed up to an agreement to support any failing EU countries. The dilema for these countries is to get through the necessary legislation to increase taxation and reduce services to the extent they need to. The problem is twofold; polical – will the electorate stabd for it?, and ecomonic – will the economy produce enough growth to repay the debt?
Comment by John | April 8, 2011 |