Sir, - The simmering debate among economists and others as to whether the pound should be revalued prior to EMU entry in 16 months' time reveals a disturbing lack of comprehension on the part of the protagonists of the most basic principles of international economic theory.
The current debate is predicated on the assumption that there exists a correct exchange rate at which to enter the EMU; that if we choose that rate on entry then the system will be a success for this country; and that if we join at the wrong rate the move will be an economic disaster. This is a sheer and utter bunkum. The correct rate is no more than a will-o'-the-wisp, changing from day to day in response to changing economic conditions. It is moreover a political judgment, balancing out the vested interests of the various sectors of the Irish economy, more than an economic judgment. To argue over what the correct value should be for all time is merely to display culpable ignorance of the issues involved.
On Ireland's entry into the EMU, each major trading currency - sterling, the Euro (including our pound), the yen and the dollar - will continue to go their separate ways into the foreseeable future and there is nothing on earth that this country can do to influence that fact of life. The sooner that this fact is unequivocally accepted as reality, the better.
There is nothing to be gained by hiding one's head in the sand and hoping that problems such as the present one will go away. They will not. They will become a recurring cause for concern. The problems being experienced today are merely a foretaste of what is to come. And come they assuredly will - time after time, and in varying degrees of intensity.
The bitter pill that needs to be swallowed urgently in so many quarters here at home is that of accepting the fact that the Irish public, by Maastricht, has irrevocably sold economic independence for a mess of pottage. Until that pill has well and truly gone down the gullet we will continue to be subjected to the kind of waffle that is currently passing for economic policy commentary. - Yours, etc.,
Terence Ryan,
Gort, Co Galway