The Irish State’s economic crisis stems fundamentally from its folly in joining the Eurozone in the first place in 1999, impelled by the longstanding uncritical Europhilia of the Fianna Fail, Fine Gael and Labour parties and others. By abolishing the national currency at that time, Ireland adopted the currency of an area with which it did only one-third of its trade (i.e. exports and imports combined). Another third of its trade was with the UK and the other third with the USA and the rest of the world. Last year two-thirds of the Irish State’s foreign trade was still outside the Eurozone! Moreover, joining the Eurozone led Ireland to adopt negative real interest rates at the height of the “Celtic Tiger” boom and thereby inflated the property bubble which has now burst, leaving both the State and its State-guaranteed banks objectively insolvent.
The 10 EU Member States outside the Eurozone – Denmark, Sweden, Britain, Poland, the Czech Republic etc.- have nothing like the Irish State’s problems. These EU Member States are thanking their stars these days that they avoided the course of folly that Ireland’s political elite pushed its people on to. A little thought will show one that abolishing the púnt was by far the worst decision ever taken by an Irish Government. It was far worse than the 2008 blanket Bank guarantee by Taoiseach Cowen and Finance Minister Lenihan, for if the Republic had not joined the Eurozone in the first place, there would have been no need for that guarantee. It was the European Central Bank which insisted that it be given: namely, that no Irish bank must be allowed to fail in case the German-French banks from which the Irish banks had borrowed, would not be paid back.
If we had stayed outside the Eurozone there would have been no ECB to bother us. The Eurofanaticism which led Fianna Fáil, Fine Gael and Labour to push through the Maastricht Treaty and push us into the Eurozone initially has been the most outstanding historical delinquency of Ireland’s political Establishment. Yet deference to the EU is so ingrained in 26-County official and media opinion that many who should know better are too timid even today to recognize and draw attention to these obvious points.
There are calls for a public enquiry into the infamous blanket bank guarantee of September 2008 and why it was continued last September. More relevant and useful would be an enquiry into the folly that led the Irish State to join the Eurozone in the first place, from which the financial collapse and the bank guarantee have both stemmed.