Mr. Michael Burke:

My background is in currencies and forecasting analysis. The reality is there will be no fix between sterling and the euro. It would not be possible and it is not in the interests of the wider EU or Britain to do it simply because of the costs it imposes on the economy here, which is particularly, but not solely, felt in the Border region. That sort of proves the point that for one very large currency area and one significantly lesser currency area, the Northern economy is irrelevant. I say this in all honesty. For someone who lives in London, the Northern economy is never mentioned. No one cares about the Northern economy. One might argue that here people care insufficiently but at least there is some discussion. It is hardly ever mentioned in England. It would not be mentioned in the context of setting of currency or interest rate policy. It is never a consideration.

That being said, the point is very well made that the currency fluctuations between the two cause considerable disruption and dislocation. It makes it impossible to do long-term planning and investment. It even has the dislocating effect where one year, shops on one side of the Border do well while those on the other side go to the wall and then vice versabecause of currency movements. This is a factor in this sort of desolation or hole around the Border area which is where lesser economic activity takes place.

In the history of this State, there was a very decisive moment, which I remember well because I was working in the currency markets at the time, when sterling devalued and was ejected from the exchange rate mechanism, ERM, in 1992. The punt had been linked to sterling ever since the foundation of this State in one way or another and the very intelligent decision was made to devalue but stay inside the ERM. It was following that decision, FDI flooded into Ireland. That was helped along with European investment. The reason for that was that Ireland still had access to this considerable market, which is now 500 million strong in terms of population. If we take the European economy as a whole, it is the largest economy in the world.

For a unified Irish economy, there is really only one decision. One could not possibly go back to having sterling. That would be to partly undo all the achievements of the past 90 odd years. The other possibility is a new punt. That presents its own severe difficulties, with a tiny economy and also cutting itself off in a way that Britain would be doing. An alternative is to have the euro, for all its ills, for the whole-island economy. To me, that is the only sensible solution.