Groupthink and Denial on a Grand Scale
Chapter 13: The first few years: smug self-congratulation and mass delusion
Stage III of the EMU transition covered the period from 1 January 1999 to 1 July 2002, the latter date marking the end of the national currencies. While the convergence process was farcical at best, it remained the case the nations could only ‘gild the lily’ so far, notwithstanding the amazing scam that Goldman Sachs helped the Greeks to perpetrate in 2001, which facilitated that nation’s entry. In other words, the convergence exercise, while fraudulent, still caused considerable self-inflicted damage as the nations imposed fiscal austerity and growth rates fell sharply. Table 13.1 compares the average annual percentage economic growth rates for the decades from 1970, with the last period being 2000 to 2013. The convergence period was clearly damaging for the large European economies (France, Germany, and Italy), which make up more than 60 per cent of the overall EMU economy. While Ireland was becoming the ‘Celtic Tiger’ in the early years and the ‘darling’ of the conservatives, it was also on its way to becoming the mangy cat that it is now.
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