Euro is fatal for Irish economy

WITH a gathering international economic crisis and an upcoming EU referendum, it is appropriate to examine the impact of Eurozone membership on the Irish economy.

When euro membership was in prospect, the Central Bank advised caution on two major grounds: interest rate policy and the British decision to keep sterling. Readers will recall that at that time Eurozone interest rates were substantially lower than Irish rates and set to decrease further.

The Central Bank feared this would provoke an inflationary credit boom and indeed that higher rates, not lower, would be needed to stabilise the strengthening economy.