Ireland's entry into European Monetary Union makes it "extremely vulnerable" to economic shocks that could further marginalise socially excluded communities, a report has found.
The report, published yesterday by European Anti-Poverty Network Ireland, argues that losing control of fiscal policy and the ab ility to set exchange rates reduces the ability of the Government to respond to economic downturns.
A recession would be "particularly negative" for marginalised communities, the report adds, because social provisions could be undermined by competition to reduce taxes and attract investment within EMU countries.
The report also says that the strict budgetary rules in the Maastricht Treaty leave little leeway for governments to spread the burden of future economic problems. A board member of EAPN, Ms Maria Hegarty, said: "This report shows the danger of moving to full EMU without clear policies to ensure that those already margina lised by our economy and society do not lose out."
CAP reform, a British decision not to join the single currency or a crisis in the computer sector are pinpointed as events that could prompt an economic crisis.
To counter the potential negative effects of EMU membership, the report calls for a combination of national and European initiatives. These include creating a European fund that could target socially excluded groups, implementing a labour market and industrial support policy to develop education and employment skills and strengthening the national anti-poverty strategy.
The president of the European Anti-Poverty Network, Mr Fintan Farrell, said: "This is one of the first reports in Europe to look at the social as well as the economic impact of EMU. I think our European partners will be looking at this report with interest."
The report was presented to the chairman of the Oireachtas Committee on European Affairs, Mr Bernard Durkan TD, yesterday.