Old punt would have 'crashed' outside euro zone

IF THIS country had remained outside the euro zone, the Irish punt would have “crashed through the floor” creating a far worse crisis than the present one, the European Commission’s top trade official has said.

Speaking at the MacGill Summer School yesterday on the theme, “Does Ireland Need Europe?” director general for trade David O’Sullivan said this country still benefited “hugely” from membership of both the EU and the euro zone.

The financial crisis and the recession reinforced this argument, and the influx of foreign direct investment to Ireland stemmed directly from EU membership, said Mr O’Sullivan, who is one of the most senior Irish officials in the EU administration.

“Economically, it is clear that we still benefit hugely from EU membership, as well as from our membership of the euro zone.

“Ireland’s attractiveness as a destination for foreign direct investment [FDI] stems directly from our EU membership, which offers a gateway to a market of some 500 million consumers.

“The Irish economy has been so successful at providing a transatlantic entry point into the EU that by 2007 the stock of FDI from the US alone was worth €20 billion.

“The recent financial crisis and the recession it has provoked only further reinforce this argument. Without membership of the euro zone, the former Irish punt would have crashed through the floor, creating a major crisis for the economy well beyond this crisis we are currently experiencing.”

On the Lisbon Treaty, he said: “A second No in the forthcoming referendum, independently of any precise legal consequences, will clearly condemn us to the status of ‘non-playing members’. All the more so since no one can clearly identify any aspect of the Lisbon Treaty which poses a major national problem for Ireland.

“The legal guarantees which the Government have obtained definitively put to rest the red-herring issues which surfaced during the last campaign. It is now absolutely clear that the Lisbon Treaty does not change anything in regard to abortion law, taxation or neutrality. There will be no European army and no conscription,” Mr O’Sullivan said.

Cllr Pádraig Mac Lochlainn of Sinn Féin said that “not a single full stop or comma or word” had been changed in the treaty since the first referendum. Dismissing the promise to retain the Irish commissioner’s position, he said: “The likely outcome is that the reduction in the size of the commission envisioned in Lisbon will be delayed five years until the next European parliamentary elections in 2014.” On neutrality, he said: “Provisions for permanent structured co-operation create a real possibility that wars we do not support will be fought in our name and with our resources.”

Lucinda Creighton, Fine Gael European affairs spokeswoman, said: “Ireland is on its knees right now. By the end of this year almost half a million people will be unemployed in this country. Ireland not only needs Europe, but Europe is our lifeline . . . We really and desperately need the support, the friendship and the co-operation of our European neighbours, now more than ever.”