Ireland's EMU chances fall

IRELAND'S chances of joining the single currency have fallen over the past week, according to the latest figures from the JP Morgan EMU calculator.

The results match a Reuters survey which found that Ireland's" chances of being a founder member had been written down because of the Euro-sceptic stance of Britain.

"It will be difficult for them to join if their major trading partners are adamant they will not be in the first wave. Their currencies and economies are tied together," Mr Daniel Gros, senior research fellow at the Centre for Economic Policy Studies in Belgium, said

In the Reuters survey only 17 out of 38 contributors gave a 100 per cent likelihood of Ireland being a founder member.

Most of the other countries in the JP Morgan index have maintained broadly static chances over the past week, although Belgium has jumped by 4 percentage points to 100 per cent.

Ireland, with a 56 per cent rating, is lagging well behind Spain at 72 per cent and Portugal at 75 per cent. It is seen as only having the same chance as Italy. In the Reuters poll, only one out of 38 respondents believed that Italy would be in at the start, despite Rome's eagerness to join.

According to an economist at an Italian bank, Italy has not achieved credibility and the European Central Bank will not have credibility if the lira is included in the euro.

However, Ireland has no such problems. It is possible that renewed attention to British Euroscepticism in the general election campaign has hit sentiment about Ireland.

Meanwhile, members of the Dail Committee on Finance and General Affairs yesterday voiced concerns to Mr Quinn on a number of key issues. However, the Minister for Finance moved to calm anxieties over Ireland's entry into the single currency and stressed that it provided for some flexibility and movement for member-states.

Fianna Fail spokesman for finance, Mr Charlie McCreevy, asked the Minister what rules were being put in place to prevent Britain, operating outside the single currency and any new exchange rate mechanism, from engaging in "a predatory exchange rate policy".

But Mr Quinn rejected suggestions that if Britain did not join the new mechanism it would be able to deliberately devalue sterling, relative to the euro.

Fine Gael TD and committee chairman Mr Jim Mitchell said, that the timetable for EMU entry should be changed and not the criteria.