Sir, - Economic and monetary union means just that. One Europe, one economy, one set of performance statistics, one collection of markets and so on. Got it? Come January 1st, 1999, the Irish rate of inflation will be of as much use within the Union as the Aran Islands' rate is to the rest of Ireland currently. Time and time and time again of late, economists have missed the point by making it. After January, the only economic responsibilities left to us will be taxation and public expenditure, or rather the difference between the two. For instance, if come December 1997 it is clear that Minister McCreevy may remain in surplus and still cut taxes, then there is absolutely no good reason for restraint. Currency, interest rates and (no matter what the pundits say) inflation, will go their merry way regardless. However, there are at least four other imperatives present for overdue consideration.
Firstly, and to the extent that direct taxes may be cut, it is high time that Ireland sought to make life both more rewarding for those who are willing to work, and less offensive and more just to those who are obliged or inclined to pay their full legal share of income tax. Secondly, there is ample scope to deploy additional expenditure in sectors which will enhance economic competitiveness and social justice.
Thirdly, and to the extent that tax cuts and expenditure provide additional net disposable incomes domestically, they will serve to strengthen domestic demand for services in particular, thus consolidating and spreading the cat litter more widely. Fourthly, reductions in direct taxation, relief of social distress and re-enforcement of domestic demand will all act to improve economic performance, both by reducing costs and by increasing productive resources, particularly labour, thus spinning the national economic top ever faster.
For a country such as Ireland, and for so long as it remains firmly focussed on relative efficiencies, EMU provides a sort of economic perpetual motion; growth, capital inflows, domestic demand, more growth, more demand, and so on and so on, with no down-side. Talk of hard landings down the road is merely so much poppycock, a flat-Earth philosophy which disregards the pending metamorphosis.
That said, our Supercat is not without weakness. Kryptonite lurks in unlikely places. Certain markets remain rigged. House costs are now of far greater relevance in the labour market than income tax rates. Commuting times glow green in the economic undergrowth and traffic chaos threatens to subvert the economy in a number of ways. Restrictive licensing regimes for such diverse items as pubs, taxis and terrestrial telephony, continue, in some cases well into an indefinite future, all the while increasing costs and crucifying the quality of life for many. All of these things and much besides are matters of management; matters of either good or bad government.
Now more than at any time in the nation's history, we need both imagination and vim, the former to see what can be and the means to bring these mere possibilities into being; the latter to give us the wherewithal to discharge the necessary tasks, challenging vested interests, encouragement of change, validation of performance and enforcement of rectification as required. EMU does not abolish our national economic sovereignty so much as it removes all but one of the classical economic constraints. Freed of the tedium of economic management, and having thus reduced the Department of Finance to something akin to a mere housekeeper deciding between brisket and tail-end, (in my humble opinion, its proper station in the national network) we will have only ourselves to blame if we fail to over-power the handy-number merchants in our midst and instead ensure that every single person is given a maximising opportunity both to assist in this tremendous step forward and to enjoy a just portion of the spoils.
This humble scribe is a portly-framed desk-bound professional. Recently, while assisting a tradesman to lift a new desk into position and, in the process, showing the end-result of every single minute of almost three decades of sedate pen (now button) pushing, I was treated to a prayer: "Jaysus, it's a good job you don't have to work for a living!". Mini-minded mandarins and economists alike will presently be in surplus. I do hope it will not come too hard to them to have to give up my fellowship. - Yours, etc., Eric Doyle-Higgins,
Lucan, Co. Dublin.