I agree with Tim on a lot of the points he has made in his two articles this morning about the Irish bailout. It is shocking that it wasn't raised at PMQs; absolutely incredible that no one is stepping up to speak for British taxpayers.
We disagree on whether Britain should say no to a bailout, though. Tim says:
"I cannot be as implacable as the TPA, however. Osborne should try to persuade Ireland to leave the €uro but if he cannot, a bailout might be necessary to stop the Irish contagion affecting the whole European continent. We are not in ideal world scenarios here."
That is a reasonable position but the problem is that we don't stop the contagion with a bailout, we just delay it. In the United States, where a little distance helps them get some perspective on this issue, economists from Martin Feldstein to Paul Krugman all think that the Euro is fundamentally broken and have envisaged countries leaving. Just yesterday, Nouriel Roubini described the Irish bailout as an attempt to "kick the can down the road". It might be an unpleasant but necessary medicine if British taxpayers had to support a bailout that stopped contagion from Europe, but just to kick that can down the road?
Ruth Lea explained the economics of the issue yesterday:
"The eurozone cannot work with such disparate economies. Putting aside the current financial crisis, it is hard to see how Ireland, for example, can recover economically. As one of our major trading partners this is bad news for us. At some point, the EU will have to come to terms with the exit of some of their members – the sooner the better. Of course there are implications for the banks – but better to deal with their problems directly rather than struggle with propping up the unsustainable."
There isn't an opportunity here to save the eurozone. As it is one of our key trading partners, we should wish Ireland well, but propping them up in an unsustainable single currency isn't the way to help. Continental politicians with a fanatical attachment to political integration might think it is worthwhile to kick the can down the road, in the hope that they can eventually make it work with fiscal integration. They shouldn't be able to do that with British taxpayers' money on the line.
I really hope ConservativeHome readers will sign our petition (look out for the validation e-mail after you've signed, it often goes to the junk folder). We need to stop this bailout.