The Ulster Unionist Party deputy leader, Mr John Taylor, said last night that the latest inflation figures in the Republic proved that it should abandon the euro and return to sterling. The only way in which the Republic could regain control of inflation was through higher taxation, which in turn would cause serious employer-trade union problems, he said.
"As far back as 1998, at a lunch in Brussels given by the European Commission for Northern Ireland Assembly members, I warned that the people of the South would suffer from uncontrollable inflation as a result of joining the euro. At the time both Sinn Fein and the SDLP Assembly members ridiculed my warning. Alas it has become so true," Mr Taylor said.
Because the Government was locked into the decisions of the Frankfurt Central Bank, it had given away all power to influence interest and exchange rates, he added.
"Eire has chosen the wrong path for its economy. It can still regain control of inflation by regaining the sovereign power to vary interest rates or by accepting sterling as its currency, and thus recognise its relationship to the UK and the USA," he added.