Compare and contrast. Two simple words that many of us have undoubtedly heard over the course of our youth. English and History teachers almost always loved to utter those words for assignments. Compare and contrast the philosophies of the English Crown and the early American Patriots during the Revolutionary War, was a common theme. Compare and contrast the two characters in Of Mice and Men. Or, we can apply those words, compare and contrast, to the two choices that fall upon sovereign nations like Ireland and Iceland.
Comparatively, both island nations have roughly the same square mileage of geography, though dissimilar populations. Ireland seems thriving with approximately six million citizens and residents, as opposed to the Nordic country's paltry three-hundred-eighteen thousand. Just like their population, the two countries have similarly, dissimilar economies. Ireland, used to have a robust and dynamic economy driven by an energenic technology and big pharmaceutical sector with a GDP of roughly $172 billion in 2009. Iceland on the other hand mixes tourism and agriculture to formulate a GDP of only $12.1 billion in 2009. Quite the vast differences.
However, with regards to financial crisis, the countries are one in the same, yet still vastly different.
Iceland, a non-EU state, was free to use the tools in it's recessionary war chest to purge itself of it's ill-gotten, debt fueled, ways. Iceland was free to beg from the IMF to stabilize its currency and then devalue to restart it's economy. Additionally, the big three lending banks of Iceland were allowed to fail in a capital economy, survival of the fittest approach. Now, Iceland is starting to pull out of its two year slump. Instead of burdening the tax payers of the country, the Icelandic people now have a better functioning government who does believe in welfare, and a better functioning economic system that will not be burdened by high debt and unemployment for years to come. Instead of negative GDP growth, a debt to GDP ratio in excess of 100%, and a government budget deficit in 2011, the country will see good growth as well as some budgetary surplus. Surly there is a lesson here to be learned for the Irish, and even us dumb Americans.
Certainly, the Irish people have been paying attention the the recent history lessons because they seem ready to let the bankers of the EU fail, along with their own economy. Numerous articles and stories have been listed lately that the opposition party stands ready to vote against the arraignment to restructure the debt of Ireland. In that restructuring, it is quite apparent that it will burden the citizens of the nation for years and years to come. Additionally, instead of reducing the overall debt load, it will actually increase it; so much for bailout and financial freedom. Obviously, when the choice to the people is so clear, bailout the bankers, or default and stick it to them, do the latter. Iceland is a prime example of how sometimes failure is always an option, and sometimes the best option.
The Irish are certainly a hardy folk, and have no shortage of principled opposition in their modern and even ancient history. Will the opposition party vote to approve or disapprove of the bailout? That is an answer we will have to wait for, but only briefly, as a vote is scheduled for December 15th. Whatever the people and the politicians chose in five days time, it will likely send the markets stirring in a buy the rumor sell the news kind of way. A country that had been so prosperous like Ireland, now finds that it is riddled with pain inducing debt that has to be dealt with and an arraignment for relief that will surly leave the people a slave to their sovereign nation.
It is time to let the record of the world show that monetary arraignments for linked currencies only incite and fuel greedy politicians and bankers to take advantage of the common countrymen. The more one reads about historical perspective, the more we can ascertain that at nearly every economic downturn, change has been implemented to prevent market collapse as much as possible, but in the end we see nothing but wealth transfer from the have-nots, to the haves. Ireland is no different than the USA in that its people will pay for the sins of their fathers and the all powerful banking cartels.
Here's to the people of Ireland that they may get a Christmas present ten days early, and plunge the Euro off a cliff.
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