After the heady patriotic stuff of yesterday’s demo in Dublin’s O’Connell Street, it is back to dealing with reality this morning. The Sunday Independent is forthrightly raising the possibility that the only option left to Ireland is to leave the Euro. The argument appears to be that even with the EU/IMF bailout the Irish economy does not have the capacity to generate the levels of growth to get us out of hock anywhere within the next ten years or so. Neither the economy nor the people could endure the levels of hardship and penury that on-going austerity may inflict. The conclusion drawn is that it is only by leaving the Euro and reverting to an IR£ Mark II that we can regain the kind of fiscal control needed. Severe devaluation of a new Irish punt would be the mechanism to build new growth. Apparently the emerging economies, like Brazil, are using this particular strategy to fuel indigenous growth.
The arguments against leaving the Euro are also powerful. As one commentator on politics.ie noted, leaving the Euro would leave us unprotected in the struggle with the markets. Foreign direct investment that saw our membership of the Eurozone as a decided commercial advantage would take flight. Indigenous industry could take a generation to catch up with places like Sweden or Denmark. Our economy would revert to the bipolar Anglo-Irish (the geographical kind) relationship.
And, of course, holidays on the Costa del Sol would be out of our financial reach. A step too far?