Ireland should postpone entry to monetary union until Britain joins, according to UCD economics professor, Peter Neary. At the economics conference in Kenmare, Professor Neary argued that the stability pact which was negotiated last December in Dublin would increase instability and discourage growth in the EU.

It strengthens the argument for postponing Irish entry to the single currency until Britain joins, he argued.

According to Professor Neary, the exemptions negotiated in Dublin were largely irrelevant. The exemptions from fines apply if a country suffers an annual fall in economic growth or gross domestic product of 2 per cent. They may also benefit from a discretionary exemption if GDP falls by 0.75 per cent.

However, Professor Neary said these were largely irrelevant as GDP rarely fell by so much and in Ireland's case had never done so.

"Steering middle course between sterling and continental currencies, seems by far the best option available," Professor Neary concluded.