Will Merkel Let Ireland Spend it's Budget Surplus?

     Ireland has shown itself to be once again model students in the EU. As we've seen in previous posts, you can't understand the euro monetary system if you don't get that it's got nothing to do with a good or even a bad economic model.

     At the EU everything is about politics. The system runs on the Franco-German rivalry. The incentive for the rest of the 18 euro countries is the about geopolitical posturing just the same. For Ireland it's about being saved from Britain, of being independent of the British.

    Even if that means becoming the appendage of Germany and the EU.

    So the Irish can wallow in their surplus.

   "For two days last week, politicians, civil society activists and business leaders gathered at Dublin Castle to discuss something rare in austerity-ravaged Ireland — how to spend an extra €1.5bn."

   "Billed as a “national economic dialogue”, the event was open to the public and webcast live. The government planned it as “an open and inclusive exchange on the competing economic and social priorities” Ireland faces. But it was also a forum for lobbyists and interest groups from every section of the economy to lay their demands before a political establishment preparing for the next election and a public not entirely convinced that the recovery is real."

   "The government says it has between €1.2bn and €1.5bn to distribute in the next budget. It is promising an even split between tax cuts and increased public spending. However, the bias among interest groups — with the exception of Ibec, the employers’ lobby — is towards spending. “It’s time to start spending again — all of that money should go towards investment,” says Sean Healy of Social Justice Ireland."

   "Michael Noonan, the Irish finance minister, says he intends to produce a budget for next year — due to be published in October — that is “economically smart and socially just”. After years of austerity budgets, the generally centrist coalition government of prime minister Enda Kenny is the first since 2007 to find itself with a bit of spare cash to disperse."

  http://www.ft.com/cms/s/0/ea6fd7fc-2f9c-11e5-8873-775ba7c2ea3d.html#ixzz3gez38d8d

  Yeah, just don't get too comfortable with your 'fiscal space.' Better check with Germany first.

  "Yet amid the battle for extra resources, warnings from the Irish fiscal watchdog to maintain a focus on debt and deficit reduction, and EU fiscal rules that place severe curbs on spending, ministers face a tricky few months ahead."

  "As Bill Mitchell points out the Original Sin is continued in the budget constraint itself, to not to understand that with fiat money there is no more reason to work so hard for 'fiscal space.'

  http://lastmenandovermen.blogspot.com/2015/07/bill-mitchell-show-irony-of-when-left.html

  So after all these years of needless fiscal ascetisim, Ireland may still not be allowed to spend its own money.

 "Much of Irish society has seen no new spending for several years. The effects can been seen today in a creaking health service, an education system starved of capital investment and poor childcare services and public transport."

“We’re absolutely at crisis point in terms of lack of capital investment,” says Fergal O’Brien, chief economist at Ibec.

 "Alice-Mary Higgins of the National Women’s Council of Ireland added: “There is a huge job to repair the damage done by austerity in the public services.”

  I wonder if Ms. Higgins checked with Angela Merkel before saying such a thing. Sure is a good thing you've escaped British domination.