asked the Minister for Finance (a) whether he expects the United Kingdom to join the EMS in the near future and (b) the probable effects of such a move on the future relationship between the punt and sterling.
Ceisteanna—Questions. Oral Answers. - European Monetary System.
5.
The British Government have indicated that they will consider afresh the question of participation in the EMS. I am not in a position to say what the decision is likely to be. Participation by Britain in the EMS exchange rate arrangements would be likely to introduce greater stability in the exchange rate between the Irish pound and sterling.
Does the Minister genuinely believe that the EMS system will last?
I have no reason to believe otherwise.
That is a separate question.
Is the Minister alarmed at the fact that the Irish punt has now gone outside the 6 per cent band against sterling? Was our entry into the EMS not a major miscalculation?
There is no band as between the Irish pound and sterling. I presume the Deputy is trying to convey that sterling has appreciated fairly considerably as against all the EMS currencies.
Would the Minister not agree that if the British pound had gone into the EMS the same time as we did the 6 per cent band between the British and us would now be broken? Does the Minister not think that signifies a weakness in our economy apart from the strength of the British economy?
I am sure the Deputy appreciates that it is unlikely if sterling had entered into the EMS at the same time as us that the same amount of appreciating in sterling would have taken place as has taken place since. It is not impossible but it is unlikely. I must again point out to the Deputy that the question of the appreciation of sterling as against all the EMS currencies cannot indicate a weakness in the Irish economy. If there is a weakness in the Irish economy because of that then the Deputy is saying that there is also a weakness in that of each of the other economies of the seven countries concerned in the EMS with us.
Question No. 6.
Would the Minister not agree that he and other economic Ministers told the House that one of the advantages of entering the EMS was that we would not be tied to what has been called by others the very sick man of Europe, namely the United Kingdom? It now appears that we are the very sick man of Europe and not the United Kingdom. Could the Minister tell us what has gone wrong?
I wonder if the Deputy is trying to say that he would prefer that our currency would be tied to sterling rather than as it is at present. If that is his attitude or that of his party they ought to think again about it.
Why did the Minister base his advice to us to join the EMS on the fact that sterling was——
I have said in the House on a number of occasions that the object of the exercise in joining the EMS was to try to achieve a greater degree of stability between the currencies concerned. That has been achieved and the Irish pound is performing very well within the EMS.
Will the Minister tell us——
We cannot have a debate on the currencies out of this question.