Leaving The Eurozone

I have been a great supporter of the EU for many years as it makes perfect sense to have a common trade region, common travel area. A common currency also makes sense, however one must ask whether it is entirely necessary to have the Euro in the form of a ‘hard currency’ and not simply a common currency which is used for Contracts etc.


The primary issue with the Euro is that far greater fiscal integration will be required between the member States to have the currency function correctly, this will eventually and naturally lead to a Federal Europe which may not be in the interests of all member States.

No comparisons can be made between the USA or say Australia and EU in terms of a homogenous federal entity. Both the USA and Australia are a soup of nationalities, mixed through all their states. And although the USA has suffered a civil war, that war was fought for political principle reasons as opposed to ethnic reasons. Europe is a much different environment, with language, cultural and religious identity changing abruptly at each border – although very similar in many ways, European people are also very different and this is why I see the EU (not Eurozone) as a perfect solution to Europes’ ambitions to work more closely together, gaining the most from close cooperation, but not so close as to start dominating each other.

Our most recent experience of a Federation and ultimate ‘break-up’ was that of Yugoslavia, where the smaller States felt dominated by the largest State and ethnic group, decisions being made with the view from Belgrade only and the organs of the federation seemingly created to serve the dominant member. This became more apparent during the wars of independence when the Federal Army was used almost exclusively by the Serbian State in pursuit of its ethnic aims. Regardless of federal treaties, when one is attempting to combine what are very distinct nationalities, cultures and histories, there will be rivalries, suspicions and bad feeling.

I am not suggesting that there would be a common European Army or a violent break up of a European Federation at some future date, however the example of the organs of a Federal State serving the purposes of the dominant member is valid and Ireland must remember that it will be a minnow within any future federal block and being on the geographic periphery of Europe requires Ireland to incentivise businesses to setup in Ireland. The requirement for incentives to attract business seems to be either missed by both Germany and France (France in particular) or France is simply choosing to ignore the obvious in pursuit of its own interests. The continuous push by both France and Germany for a common corporate tax rate is wholly in their interests and would potentially destroy investment in Ireland. One must ask the rational question as to why a multinational would setup in Ireland and not in the Ruhr or Paris Region if the incentives were equal throughout the EU.

The current Merkel/Sarkozy dominance of EU decision making is not done in an effort to provide ‘strong leadership’, but done solely for reasons of national interest. Their behaviour is reminiscent of Milosovic as Serbian Leader within the Yugoslav Federation and bizarrely in a community of 27 independent states, not a single other leaders voice can be heard, there is no collective decision making, there is no dissent and even when the head of the ECB, EU Commission or EU Parliament makes a statement with suggestions/recommendations, he is ‘shot down in flames’ very publicly and quickly by either Merkel of Sarkozy. This is an omen of things to come, the return of Ireland (and many other smaller EU nations) to being subservient to powerful players within a modern empire.

The EU can work, it had developed sufficiently by the year 2000, however the requirements of a single hard currency are simply too much progress too soon and will ultimately lead to the breakup of the EU. The achievements of the EU thus far are too great to risk losing in pursuit of what is unnecessary at present.

Ireland should immediately commence planning for a withdrawal from the Eurozone and plan to reintroduce the punt pegged to the Euro (or Sterling) initially. The withdrawal of one country from the Eurozone will lead to several others following suit and perhaps we can return to the form of EU which benefits all members and not simply the largest ones.