Business World

Friday 22 September 2017

Despite Brussels calling the shots, we're still hooked on the euro

Colm Kelpie

Colm Kelpie

IRELAND's love affair with Europe continues.

Even if some feel that Brussels is calling the shots and that certain leaders exert too much influence, we're still hooked on the single currency, and therefore, the eurozone itself.

The latest Eurobarometer from the European Commission, which measures attitudes towards the European Union from member countries, shows despite its ups and downs in recent years, we Irish remain convinced by the euro.

Some 72pc of people surveyed believe the euro is good for the country – up 4pc since the last survey in October 2012 and well above the euro area average of 57pc.

And 77pc believe that having the euro is also a good thing for the 17-member eurozone – a rise of 5pc since last year's survey.

The study was conducted among 1,000 people last month by IMS Millward Brown.

It doesn't give any explanation as to why such a high number backed the single currency.

More than half here believe there should be more economic co-ordination, including through budgetary policies.

That's already taking place. Europe was the reason why this year's Budget was brought forward from the usual December date to October 15.

Under new rules, known as the 'Two Pack', the draft budgets of all member states must be prepared by mid-October for the European Commission to look at them.

VERDICT

The Brussels-based body will then give its verdict, with each country having to ensure the budgets are then passed before the end of the year.

The Commission will reveal its opinions on the various budgets on Friday, at the same time European finance ministers gather in Brussels to discuss important new collective rules for winding up failed banks.

While there is a relatively strong appetite in Ireland for closer co-ordination, we're not as convinced as some other countries, with the average across the eurozone standing at 72pc.

Even in Greece, which has borne the brunt of austerity policies, 81pc believe there should be more co-ordination of economic policies among Euro-area countries.

It's a similar figure for Spain, Italy and Portugal.

This suggests that, despite the austerity policies that have been foisted upon countries, despite the move to scale back budget deficits to under 3pc and the need for painful fiscal consolidation to meet that target as a result, many people see a closer, more co-ordinated Europe as the way forward.

How to get there is the big conundrum.

The major stumbling block will be how to sell the fact that integration means a loss of sovereignty – which some argue we've been steadily conceding anyway since we agreed to enter the single currency.

The current debate around banking union highlights the inherent difficulties in moving closer together, with Germany in particular expressing resistance amid talks on EU-wide rules to deal with failing banks.

Five years after the financial crisis erupted, many European lenders remain in trouble, holding back the eurozone economy as it gradually recovers from recession.

Berlin does not want to be told by Brussels to close a German lender.

Neither does it want to be left on the hook for the clean-up of bank crashes elsewhere.

While difficulties exist, the Eurobarometer's findings will at least give solace to policymakers that support for the single currency and further integration remains high – despite a tumultuous few years.

Irish Independent

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