In fact, our current crisis arises from ECB policy, in the same way as Ireland’s economic distress 100 years ago arose from the Bank of England.
It is inevitable that Ireland’s needs are irrelevant to any central bank deciding on monetary and exchange rate policy for 500 million people. In fact, prior to euro entry, both the Bank of England and the Irish Central Bank voiced grave concerns to their respective governments that their national economies would suffer great disruption from euro entry. The fundamental reason in both cases was that compared with continental economies, Britain and Ireland are far more sensitive to interest rates and unsuited to an ECB “one size fits all” policy.
By opting out of the eurozone and allowing sterling to devalue, Gordon Brown has a “get-out-of-jail-free card” for Britain. We are stuck with mega-boom and mega-bust, an overvalued currency, violently deflationary budgets and soaring unemployment.