Benefits from Britain in euro - Ahern

Britain's participation in the euro would improve the Irish economy, the Taoiseach said last night.

Mr Ahern also said the positive impact of monetary union will strengthen the EU.

In a speech to the national conference of the Confederation of British Industry he said the Republic would clearly benefit from British participation in the single currency.

"I make no secret of saying that it is in Ireland's interests, and in that of the EU as a whole, that Britain play a central role in Europe . . . on the adoption of the euro, this decision is obviously a matter for the British people alone.

"But let me say this. Ireland would clearly benefit from British participation and I remain convinced that the positive impact of the euro, in further strengthening the single market , will become clearer over the medium-term."

Mr Ahern's comments came two days after the European Central Bank's (ECB) unilateral intervention last Friday to support the euro's value.

Foreign exchange markets will be braced for further bouts of intervention after this development.

Many analysts had all but ruled out the prospect of intervention in advance of this week's presidential elections in the US.

There were also indications that the ECB would be reluctant to intervene alone. When it bought euros last September, it did so with the support of the US Federal Reserve and the Bank of Japan.

Last Friday's intervention is likely to cause a re-evaluation of ECB strategy, with traders waiting to see if the action heralds a more activist approach from the ECB.

"We could see more opportunism from the ECB," said Mr Alan Ruskin, a currency strategist at 4Cast, a New York economic consultancy. "Traders will expect them to try to go with the grain of the market."

In Birmingham, Mr Ahern said currency movements "come and go over time". Volatility was a fact of life best managed as an integral part of a company's overall business.

The benefits flowing from participation in the single currency would "far out-weigh any limited short-term difficulties" currently posed by the under-valued level of the euro.

He said: "As markets have demonstrated time and time again, currencies do return to equilibrium."

"It is no surprise, therefore, that many influential commentators are pointing to the likelihood of a significant increase in the value of the euro."

Mr Ahern also said both governments believed EU decisions on taxation issues should be taken unanimously, "and that taxation policy should remain primarily a national responsibility".

The Republic was open for business and investment as never before. "We have a strong and growing economy which is full of opportunities. We have the policies, the vision and the resilience to sustain our strong economy".

The State's prosperity, bound up in "a new atmosphere and a new confidence" was due, in part, to being free from "the three great scourges" of political violence, emigration and unemployment.

These had been largely overcome although "difficulties" remained on the path to peace in Northern Ireland.

"The course to peace has been set by the people and we will not deviate from it".

Mr Ahern said the Government was "determined" to tackle domestic factors contributing to inflation.

Asked if he was explicitly calling on the British Prime Minister, Mr Tony Blair, to bring Britain into the euro zone, Mr Ahern told The Irish Times: "I'm not, because he has already stated that he is not going to give any consideration to that until well into the life of the new government. But what I am saying is that it is in Ireland's interests that Britain ultimately join, hopefully on the other side of an election."