Sutherland supports a US approach

The Republic and the EU should adopt some of the business practices which have made the US an economic success, the chairman of Goldman Sachs International, Mr Peter Sutherland, has said.

The Republic would benefit more from EMU if it increased its focus on entrepreneurship and the job creation potential of start-up firms.

"EMU will be a survival of the fittest and we need to look at things like competition in the public service and our investment in computers," said Mr Sutherland.

The Republic and Europe were "failing" in the area of computer literacy. In the US, 54 per cent of people use a PC on a regular basis, whereas the highest rate in Europe is 33 per cent, he added. "With EMU approaching, we need to move rapidly to address such gaps between Europe and the United States," he said, addressing a meeting of the American Chamber of Commerce Ireland yesterday.

He said all European politicians had to ask themselves why unemployment in the US was running at historically low levels, while European unemployment was at unprecedented high levels. "One of the reasons for this is that America has a great entrepreneurial culture, where start-up businesses are facilitated and access to capital is made easier."

He pointed out that over the last six years, more than 7,000 initial public offerings had been made in the US, compared to just 720 in Europe. He said too often there was the "wrong" attitude to capital in Europe, whereas competition in the US thrives.

"I am not speaking in favour of all aspects of the American economy; for example the Republic's form of social consensus has really worked," said Mr Sutherland. However, in a post-EMU era, consensus should not mean the economy being held back by those unable or unwilling to accept change, he said.

Mr Sutherland said he did not see sterling participating in the single currency for another six to seven years. "Certainly nothing will happen in Britain until there is another election and even after that a referendum will have to held; all that is likely to take years," he said.

His overall assessment was that single currency would be good for the Republic, although it would mean the Government would be unable "to spend its way out of trouble". "Despite this, I think the euro will be a strong currency, because it will be managed by central bankers who will have only one consideration and that is price stability."