Tuesday 20 March 2018

Euro currency was premature, badly designed and managed - economist Colm McCarthy

Economist Colm McCarthy
Economist Colm McCarthy
Colm Kelpie

Colm Kelpie

The Euro was a premature project which has been badly designed and managed, economist Colm McCarthy has said.

The economist told TDs and Senators today that the single currency has helped fuel the rise of Eurosceptic parties across the Continent.

“There are these Eurosceptic parties on the rise across Europe. I think one of the reasons for that is the Euro,” Mr McCarthy said. 

“The single currency was a premature project. It has been badly designed and badly managed. It has given rise to feelings in this country, and lots of other countries, Greece, that our country is getting screwed by Europe. It might not be reasonable but people feel it.

“I think the common currency has done damage to the European project.”

Mr McCarthy was addressing the Oireachtas European Union Affairs committee on a possible UK exit from the EU. Prime minister David Cameron has promised British voters a referendum by the end of 2017.

Read More: Britain exit from EU: Economist Colm McCarthy addressing Oireachtas committee on possibility

Mr McCarthy told the Committee that there was no certainty that a referendum would be held, and that even if it was, the British people may vote to remain within the EU. He said a British exit was not the most likely outcome, he believed, but that it was not a remote possibility.

He said a so-called “Brexit” would be damaging for Ireland given the close trading and economic relationship between the two countries, the fact that we share a land border, and the close links between the IFSC and the City of London.

“There are a lot of fears in the City of London that if Britain does quit the European Union, that would be used as an excuse … to screw the competitiveness of the city of London as a financial centre,” Mr McCarthy said.

“Our International Financial Services Centre in Dublin is partly a satellite of the London financial market. If the City of London gets screwed, it won’t be good news for the IFSC.”

Mr McCarthy recommended that the Irish authorities should seek involvement in the pre-referendum discussions on any deal offered to the UK by Europe, as well as the referendum discussions.

“I think Ireland has more at stake in all of this than many other EU members,” he said.

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