Sir, - Brendan Ryan (October 26th) criticises economists who did not publicly oppose the Maastricht Referendum, but who now express reservations about our joining EMU.
This suggests a somewhat authoritarian view of the role of intellectuals in a democracy. They should speak in public when it is timely or not at all; they should be consistent in their views, even when circumstances change (as they clearly did when sterling devalued in September 1992 and we followed four months later); and, if they fail to play by these rules, they should refrain from questioning government policy (even though the Government itself has recently spent a significant amount on the excellent ESRI study of the economic implications of EMU for Ireland).
Mr Ryan also suggests that the debate on our membership is redundant, since we are going to meet the Maastricht criteria and so qualify automatically for membership. But this is not true. The latest IMF projections suggest that only France and Luxembourg will meet all the criteria in 1997, and the former only after some budgetary juggling which senior German central bankers have publicly questioned. So what will happen when the time comes to take the decision on entrants (early to mid 1998)?
One possible scenario is that the Germans Constitutional Court will rule that Germany itself cannot join since it does not meet the criteria, in which case the whole project would presumably collapse. More likely is that the criteria will be interpreted liberally, as allowed for in the Maastricht Treaty. But this should still leave us with the option of staying out if we chose to do so.
This is the course which Sweden seems set to take, though its debt to GDP ratio is only slightly worse than ours (78 per cent versus 73.2 per cent for On the other hand, it would be ludicrous to exclude Belgium, notwithstanding its projected debt to GLDP ratio of 127.0 per cent, when its natural trading partners will be founding members.
It was precisely the issue of whether it would be wise for Ireland to join EMU in the absence of the UK, still our most important trading partner, which we raised in a recent paper to the Dublin Economics Workshop Conference. Your, etc..
Department of Economics,
University College. Dublin.