Sir, – Fintan O'Toole writes that "The euro may look like a disastrous project for Ireland or Greece but in Germany it's an enormous success" ("Europe divided by a sense of crisis and a sea of amnesia", Opinion & Analysis, July 21st).
Focusing just on Ireland, the cumulative growth in the Irish economy from the time of the euro’s introduction (January 1999) would suggest that it has been of resounding benefit to Ireland, on balance. At the time of the Maastricht Treaty and in compensation for accepting the disciplines of EMU, Ireland was granted an exceptional allocation of EU structural funds, including a generous allocation of a new “cohesion fund”, especially established for less developed EU member states that joined the euro. Irish exporters benefited greatly from being able to price in their domestic currency. The euro in Ireland stimulated a huge surge in the number of companies in the IFSC, with corresponding additional jobs. Irish interest rates, including mortgage rates, fell dramatically because of the euro and have remained very low since. – Yours, etc,
BRENDAN LYNCH,
Blackrock,
Co Dublin.
Sir, – Fintan O’Toole blithely ignores the low interest rates that all major western economies are enjoying at the moment due to low inflation and quantitative easing, which, ironically has been resisted by the Bundesbank’s ECB representative.
He also ignores the previous convergence in yields on “peripheral” euro zone debt which benefited Ireland and others – or at least would have, had the relevant governments not suffered from chronic fiscal incontinence. Unfortunately, instead of reducing debt, resolving the pensions time-bomb, investing in infrastructure and reforming the tax system, Ireland and others stoked a property bubble and increased current government spending at an unsustainable rate – as epitomised by the bizarre McCreevyite mantra of “when I have it, I spend it”.
Fintan O’Toole’s comments on euro weakness and German exports ignore the boom in German productivity after the labour market reforms, and that the demand from China continued during the years of considerable strength in the euro exchange rate.
Moreover, he ignores the fact that peripheral countries such as Ireland and Greece bent over backwards to join the euro in order to enjoy the benefits of a strong German-dominated currency. Recently we have even seen Greece’s supposed radical Syriza’s spectacular capitulation when its bluff on a Grexit was called. – Yours, etc,
PAUL KEAN,
Dublin 8.