I commissioned top Irish pollster RED C to ask the following question to a representative sample of 1,000 people across the Republic of Ireland between 29/11/10 and 1/12/10:
“In light of the current financial crisis, would you support Ireland leaving the Euro and re-establishing a link with the pound sterling, or not?”.
Over a third of the sample answered ‘Yes’.
Support was strongest among the younger age groups and people with children. A majority of those who have already lost their jobs want Ireland to leave the Euro and return to sterling. Even 43% of Sinn Fein supporters now want to return to the pound (see full results).
In the 1990s I was UK Economist for Warburgs and argued that “the UK and Ireland would be especially badly affected by monetary union with the Continent” with Irish bank lending exploding out of control under EMU (see link1 and link2). The fall-out from that has now caused ruling Fianna Fail to fall behind Sinn Fein, even losing in my grandfather’s old seat in Donegal (Henry McDevitt TD 1938-43).
The EU thinks it can order whoever forms Ireland’s new government to slash spending and hike taxes to bail out the European Central Bank (ECB) and European investors in Irish banks. The EU is also demanding that the Irish people submit weekly reports on what they spend and is imposing an interest rate which is intended to punish rather than help.
Such behaviour by the EU may be a miscalculation because it rather assumes that the Irish have nowhere else to go. That is not the case. Individually tens, and perhaps soon hundreds, of thousands are emigrating to England and elsewhere to escape the Carolingian economic settlement.
Collectively, Ireland wants to renounce its politicians’ self-serving guarantee of senior bank debt but, despite IMF support, this has so far been vetoed by the EU and the ECB. Ireland also needs monetary policy better suited to its economy so as to avoid repeated boom-bust cycles in bank lending under the Euro.
The EU may successfully bully Greece or Spain, calculating that it would be too risky for them to reintroduce their own currency, but Ireland has another option. Already over a third of Ireland want bilateral arrangements with the UK, instead of what is on offer from the EU and the Euro, and that is before the EU measures begin to bite.