Thursday 8 December 2016

Sovereignty was taken with euro

Published 19/11/2010 | 05:00

All the crocodile tears being shed for the current episode of 'sovereignty loss' would be a bit less nauseating if they were accompanied by even a modicum of recognition that when this country's authorities adopted the euro, and thereby abolished national control of interest rates and exchange rates, they abandoned the essential economic instruments of sovereignty.

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Remember the key question asked in last June's Regling-Watson report on the banking crisis: "Was it a coincidence that Ireland's economic fundamentals began to deteriorate when Ireland joined the euro area?"

And their answer: "In a monetary union, the challenges for policies becomes even greater as monetary conditions cannot be influenced directly and the (nominal) exchange rate is no longer a policy instrument."

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