Euro Pact Ignores Ireland’s Lack of Synchronicity: Frank Barry
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Dec. 15 (Bloomberg) -- In 1999, when the Irish governmentadopted the euro, most Irish economists disagreed with thedecision. It was made partly to reduce the country’s tradedependence on the U.K. But to use currency policy to achievethis was to place the cart before the horse.
Ireland’s business cycle is out of sync with the euro zone.It has an Atlantic economy: The U.K. remains the major exportdestination for Irish-owned companies, while the U.S. is thesource of most incoming investments. A fiscal policy harmonizedwithin the euro area will not synchronize the Irish businesscycle with that of the French-German core.