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Saturday 25 March 2017

Soden: Let's quit EU and join US

Ronald Quinlan

Ronald Quinlan

Central Bank adviser raises questions over the power of Brussels to direct Irish fiscal policy

IRELAND should consider leaving the EU if it prevents us from making our own decisions on the management of our economy, a leading member of the Government's newly-established Central Bank Commission has said.

As our politicians struggle to devise a plan to bring the country's spiralling deficit down to the 3 per cent of GDP by 2014 being demanded by Brussels, former Bank of Ireland chief executive and commission member Mike Soden has broken rank, issuing a refreshing challenge to the orthodoxy that Ireland could not survive without the European Union.

"Just for a moment, let us question why our hands are tied at this time as a member of the EU.

"If we are in search of a solution and Europe finds it difficult to accommodate the needs of the Irish electorate, should we look elsewhere?" Mr Soden asks in his new book on the financial crisis, Open Dissent.

Expanding on his argument, the 63-year-old career banker adds that: "Our membership of Europe has to have balance in all aspects, particularly in relation to our culture, our sovereignty and the price we pay for economic and financial independence.

"Have we unwittingly surrendered these precious aspects of our society as the price of European Union membership?"

Addressing one solution that Ireland might consider, Mr Soden says we should "stretch our thinking, widen our view and look west, not east".

Raising the possibility that Ireland might seek to break away from the EU, and enter into a new alliance as the 51st state of the United States of America, he says: "We might consider this option unthinkable, but 50 years ago we may have thought membership of a European Union or a United States of Europe to be impossible."

Commenting on the potential benefits of a new alliance with the United States of America for Ireland, Mr Soden notes optimistically that: "The possible consequences of political and economic association with the US would be a massive influx of foreign direct investment, a link to the US dollar, a reduction in unemployment, and who knows, maybe an annual payment for a number of years to get our finances back in balance."

Reflecting on the obvious loss of sovereignty US statehood would represent, he concedes that: "Surrendering our independence would never be palatable -- but that's what we have done through our membership of the EU.

"This may be the wrong time to put forward a negotiated plan that could result in a form of political and economic surrender. However, if we cannot make a decision on the financial aspects of our economy without referring to the EU or the ECB, then we have done just that."

Mr Soden acknowledges that a move away from the EU towards the US would be met with the "massive disapproval of our closest neighbours", and could "easily be met with disapproval by Uncle Sam".

And while the former Bank of Ireland chief's uncompromising views will no doubt be met with strident disapproval from within Government Buildings, the Sunday Independent understands that he did inform officials at the Department of Finance that the publication of his book was imminent at the time of his appointment to the Central Bank Commission.

Mr Soden was formally appointed by Finance Minister Brian Lenihan to the board of the new agency for a term of four years on October 1 last.

Also appointed to the board were leading economist Professor John FitzGerald of the ESRI and internationally-renowned banking expert and co-author of the recent report into the banking crisis Max Watson.

Joining Mr Lenihan's appointees on the board of the commission as ex-officio members are Central Bank Governor Patrick Honohan, Financial Regulator Matthew Elderfield, Secretary General at the Department of Finance Kevin Cardiff and Head of Central Banking Tony Grimes.

Sunday Independent

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