Euro has been good for Ireland -- NESC
Published 18/08/2010 | 05:00
EURO membership has been beneficial to Ireland, and the country would probably have fared worse in the crisis of the past two years had it not been a member, a new report says.
However, the analysis by the National Economic and Social Council (NESC), which represents the Government and the social partners, says Ireland's approach to fiscal policy, prices, costs and financial regulation were not sufficiently adapted to single currency disciplines.
"To succeed within the euro, Ireland must ensure that future fiscal policy is sustainable, prices and costs maintain Ireland's competitiveness, and financial supervision prevents irresponsible banking practice," the report says.
"It requires a correct assessment of the drivers of economic growth, the state of the economic cycle and identification of asset price bubbles.
"Uncertainty on these questions interacted with a set of unresolved political economy issues. Among these were the appropriate scale of public services, the level and incidence of taxation, and approaches to housing supply and land management," NESC says.
The euro itself faces severe challenges, such as the recovery of the whole European economy in the context of fiscal austerity programmes and the continuing risks to the financial system at global level.
There will have to be more political and public accept- ance of the need for mutual surveillance of national policies and replication of the more successful ones by other member states.