Transcript EUR/CHF AND 2Y SWAPS - Irish Congress of Trade Unions

ICTU Seminar
Dublin July 7th
Michael O’Sullivan
Author of ‘Ireland and the Global Question’,
Co-editor of ‘What did we do right?’
Sovereign debt crisis through history
Financial crisis
Sovereign external debt: 1800-2006
Percent of countries in default or restructuring
Global recesssion
1873 - 1879
Great Depression
& WW2
Emerging market
debt crisis
Napoleonic
wars
Source: Reinhart & Rogoff, “This Time is Different: A
Panoramic View of Eight Centuries of Financial Crises”
This is what the banking crisis will do
% of GDP
120
Advanced
economies
100
80
60
40
Emerging
markets
20
Forecast
0
1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014
Debt to GDP ratio
Source: Velde (2003), Murphy (1999).
… but what about the war?
Source: Angus Maddison
The Great Transformation – over and over again
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2006
2000
1990
1975
1960
1945
1930
1913
1870
1820
1700
1600
1500
Ratio o f Irish GDP per capita to B ritish
Source: Angus Maddison
The Global Question
‘Small states must rely heavily on the quality
of their strategic thinking to counter their
vulnerability to international influences’ JJ
Lee
Great Bubbles and changed societies
• the new rich serving soup in a church
offertory basin, sugar being dispensed from
an incense burner and salt from chalices'
• ‘the worst about the Irish is that they become
corruptible as soon as they stop being
peasants and turn bourgeois’ – Friedrich
Engels
Coming to our senses
'Men, it has been well said, think in herds; it
will be seen that they go mad in herds, while
they only recover their senses slowly, and
one by one‘ Charles MacKay
There is no plan, strategy or national vision
A guarantee of religious and civil liberty, equal
rights!
Happiness and prosperity?
Cherishing all the children equally!!
This is the most important period in the history of
the State since the 1920’s
Irish resolve against the bond vigilantes!
‘There
is a small nation that stood alone
…that was clubbed many times into
insensibility….a small nation that could never
be got to accept defeat and had never
surrendered her soul’
Shh…don’t be subversive
‘Patriotism is a love of country, pride in its
history, traditions and culture and a
determination to add to its prestige and
achievements’ Sean Lemass
What do ‘foreigners’ really think of us?
‘What did we do right?’
What did we do right?
• Intangible Infrastructure
• 'Little else is requisite to carry a state to the highest degree of opulence
from the lowest barbarism but peace, easy taxes, and a tolerable
administration of justice: all the rest being brought about by the natural
course of things' – Adam Smith
What’s next?...honestly
• depression and discovery
• Where will growth come from?
• Where will the money come from?
• Move from financial and economic phases of the
credit crisis to the social and political
Rebuilding
• We need more strategy and less tactics in order to
buffer globalization, more technocracy
• Re-engineer most of our institutions (though who will
do this?)
• Le Grand Méchant Marché
• Boston, Berlin or Beijing
The World Economy – 1700 to 2030
40
28
14
27
23
26
30 31
32
15
18
6
4 5
9
2 3
23
18
13
5 6
Russia
0 2
23
Europe
USA
China
16
11
5 3 3 3
10
4 2
Japan
India
32
23
21
16
Note: 2007 figures at current exchange rates
24
13
RoW
8
Share of Global GDP (%)
Years: 1700, 1820, 1890, 1952, 2007, 2030F
Source: Angus Maddison, IMF, Credit Suisse
4
The Second Republic*
*Irish Times, 14th April 2009, and in ‘Ireland’s Economic Crisis – time
to act’ – Glenties Summer School, July 2009.
What is it?
When?
By whom?
The Second Republic*
*Irish Times, 14th April 2009, and in ‘Ireland’s Economic Crisis – time
to act’ – Glenties Summer School, July 2009.
‘In a little time the Revolution became a test of every
man’s political creed and the nation was fairly divided
into two great parties, the Aristocrats and
Democrats…needless to say I was a Democrat from the
beginning’