Ireland is fortunate to be one of the very few European Union member states experiencing strong economic growth. This was duly reflected in Tuesday's budget, which kept carefully in line with the criteria for economic convergence laid down in the Maastricht Treaty for monetary union.
The favourable Irish position has been starkly underlined this week by the rush of speculation and pessimism about whether the most important states, notably France and Germany, can qualify for membership. When such figures as the former French president, Mr Valery Giscard d'Estaing, the distinguished Spanish Foreign Minister, Mr Carlos Westendorp, and even the former president of the European Commission, Mr Jacques Delors, raise questions about whether the timetable set out in the treaty can be realised, it is clear that there is something seriously amiss. The same conclusion must be drawn from the rush of denials in Paris, Brussels and Bonn that altering the January 1st, 1999 target date is being contemplated. It culminated last night in a flat denial from President Chirac that France supports any such an initiative.
There is a limit to the credibility of denials when compared to the underlying economic trends on which the latest wave of pessimism is based. Economic growth in France and Germany is tailing off sharply and unemployment remains stubbornly high, with the result that neither country, on current projections, Is fulfilling the Maastricht criteria. No wonder there have been so many calls for flexibility with timetables and interpretations of treaty provisions - some from people who up to recently were urging the most adamantine compliance with them.
It is all a cautionary reminder that politics can so easily take precedence over economics in this most sensitive field. It will be necessary for political leaders to come up with more convincing economic policies that can rekindle the levels of growth required to allow the convergence rules to be met. The European Commission and finance ministers insist that the economic fundamentals are sound and that few of the classic signs of recession are apparent. In that case reduced interest rates could provide a necessary stimulus. So could implementation of plans for more structural and labour market flexibility across the main economies.
But if the gloomy assessments on view this week persist it will be necessary to take a deeper view; even to re examine the Maastricht package as a whole, as several prominent Europeans have suggested this week. If the project of monetary union were to unravel, we should be under no illusion that the Single Market would be gravely affected, that currency speculation and, therefore, high interest rates would return, and that recession would undoubtedly have arrived.