Luke Flanagan (Roscommon-South Leitrim, Independent)

How can the Government stand by and watch while the leaders of Germany and France decide our future down to the last detail? Flawed as the European institutions are, surely if they have any future, the "Merkozy" duo cannot be allowed to continue on as if they are the only two countries affected by this crisis. The European banking crisis has, in a sense, done us a favour. It has shown us that when push comes to shove the opinion of a small country like Ireland is irrelevant. It has shown that further integration would leave us with even less say and that Mother Ireland is close to the grave unless radical steps are taken by this Government.

I agree with the assertion that, for the euro to work, we must have full fiscal union. Anything else is a denial of the truth. It is in the economic interest of Ireland for the euro to survive and it is because of this that we should leave the euro in a structured and agreed way. For that matter, so should Spain, Italy, Portugal and Greece. We will then be left with countries unsuited to a common currency being able to get on with it. The political establishment here attacks the idea of leaving the euro as not being feasible. However, any objective analysis of Ireland's membership of the euro will show that it has been an unmitigated disaster. The euro was introduced when Ireland's economy was starting to overheat and an increase in Irish interest rates was warranted. Instead, the eurozone interest rates set by the ECB reflected the needs of France and Germany, whose economies were in the doldrums, the latter as a result of the enormous cost of reunification. It is not possible to set one interest rate and serve the needs of Germany and the Irish economies.

In his Budget Statement on Tuesday, the Minister for Finance stated "If we need a role model it should be the economy of the mid to late 1990s where over 600,000 jobs were created and growth was based on competitiveness, high educational standards, a credit flow from the banks to enterprise and hard work." The Minister is correct and we need to return to that era, an era when we had our own currency for the only time in this nation's modern history. Some 40% of Ireland's exports go to the UK, the next 20% go to the USA and the remainder goes to the EU and the international area. When Ireland first joined the German-based euro, it was worth 56p and $0.90. Today is it at 85p and $1.35, down from highs of 94p and $1.47. When the Minister for Finance talks about competitiveness, he should consider the fact that, since we joined the euro, we are 50% less competitive than our largest trading partners.

Opponents of this view, who suggest that Ireland exiting the euro will cause multinationals to leave our shores, are being untruthful and pessimistic. During the currency crisis, Digital's hardware plant in Galway was under pressure and a management delegation met the then Minister for Finance, Bertie Ahern, and implored him to devalue the punt. When tied to the Deutschmark in the ERM, the punt had risen to a sterling value of £1.10. The Minister for Finance refused and 1,200 jobs were lost when the hardware plant closed and production was transferred to a sister site in Ayr, Scotland. Scotland is not in the ERM or euro and a short time afterwards Ireland left the ERM and devalued. We should do the same now.

More recently, Dell left Ireland and the euro and relocated to Poland. Poland is not in the eurozone. From 1993 to 1999, while Ireland's currency was outside the ERM, sterling and the euro, foreign direct investment prospered in Ireland and contributed greatly to our 7% annual growth rate. It is estimated that approximately 7% of exports from Irish multinationals go to UK. Following an exit from the euro, Ireland's currency would devalue against sterling and the dollar, benefiting exporting multinationals. Multinationals are well versed in managing currency fluctuations. For the most part, they use currency fluctuations to their advantage. Now, we can throw into the mix the fact that fiscal union will end our 12.5% corporation tax rate. As I am sure the Minister of State is aware, this will not go down well with our multinationals.

Those who argue that leaving the euro would mean expulsion from the EU are simply not supported by the facts. There is no legal mechanism to expel any country from the euro; almost a third of EU members are not in the euro. Why should Ireland be expelled for being no different from one third of all other EU members? Are all non-euro countries to be expelled too?

Ireland was warned about the consequences of joining the euro, most notably by Mr. Anthony Coughlan but also by Mr. Maurice Doyle, former Governor of the Central Bank. When asked about the rights and wrongs of joining the euro, he said that Ireland had already had a political, economic, monetary and fiscal union and we got the hell out of it as soon as we could.

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