Sir, - The real debate, from an Irish perspective, relating to the introduction of a Single Europeans Currency is whether Ireland: should join such a monetary union if Britain declines to sign up to EMU membership. The crunch decision is only around the corner, because in early 1998 the European Council will decide which member states will qualify for European Monetary Union, based on the updated economic statistics for 1997.
It is clear that Ireland will be in a position to join the first tier of European countries participating in the new European single currency. This is due to the fact that our debt per GNP ratio is decreasing annually and our economy has been growing at a steady rate since 1987, together with the assistance of two European Structural Fund programmes. I feel that the Irish Government should commit itself to acceding to a single European currency, whether Britain joins or not.
Since 1960, there has been a major change in the pattern of Irish trade. From almost complete dependence on the British market as a destination for exports and a source for imports, the importance of the British market has declined steadily, measured in terms of trade shares. The share of Irish trade with Britain has decreased from a figure of 73 percent in 1960 to 28 percent in 1995.
Aligning ourselves to the "Euro" will mean that participation in such a strong and stable monetary system will result in lower interest rates in the medium term. The benefits of joining a single European currency will include increases in terms of output, employment and trade. This will be good news for the building, construction, manufacturing and tourism sectors, all of which will become more competitive in a climate of lower rates.
The financial services sector will undoubtedly experience some changes during this period. The Irish Banking Federation has already gone on record as stating that a time frame of two to three years will be required to implement a single currency at a cost of two per cent of the bank's annual operating costs. I would stress that if the banks are to incur a minimal inconvenience during this transitional period for the introduction of a single European currency, then the hard pressed consumer seeking credit should not have to carry the can for any diminished shortfall in bank revenues during this time.
The bottom line is that Ireland must join up to a single European currency at the first opportunity, with or without the participation of Britain. Notwithstanding the clear economic advantages of EMU, Ireland must continue to play its part by remaining at the heart of Europe and facilitating the introduction of a single European currency by the end of the century. - Yours, etc.
Dublin Road,
Navan, Co Meath.