No, not yet (we will hang in there until Germany gets fed up and either kicks us out or Germany leaves). However, of all of the PIIGS, we are best placed technically to leave the euro, given the presence of the UK on our doorstep. At a superficial level, it would work like this:
1. Establish a shadow Central Bank of Ireland in London (subject to UK Official Secrets Act). This will become the new Central Bank of Ireland.1
2. Using the Currency and Banknotes Act 1928 and the fact that the Republic of Ireland now effectively owns AIB (which has a Northern Irish bank note issuing subsidiary in the form of First Trust), sufficient First Trust Sterling to be printed to supply the Republic of Ireland.2
3. On the relevant changeover date (probably the October Bank Holiday weekend as this is not mirrored in the UK) announce the changeover and ATM shutdown.
3a. Establish initial exchange rate from euro to sterling (market based)
3b. Replenish all RoI ATMs with First Trust Sterling
3c. Activate the fifth UK clearing house in the shadow Central Bank of Ireland 3
3d. Transfer and redenominate all RoI Euro accounts to interface with the new clearing house in sterling 4
4. Emergency meeting of Dail Eireann on Bank Holiday Monday to introduce a 100% tax on all euro retail transactions - except for conversion of euro to sterling in a licensed bank or post office. 5,6
5. Abolish pre existing Central Bank and transfer shadow Central Bank of Ireland from London to new site in Dublin.7
There is a window of opportunity for this in 2012 due to the US Presidential Election. Does Barack Obama really wish to alienate the Irish Vote on November 6th? It would be amazing what a replication of Dev's threat to revoke the Irish passports of US citizens could do at that sensitive time (needs must).
Notes:
1. It has to be a new body established in Britain as the UK Government's support would be necessary to the overall project and because the existing Central Bank of Ireland is de facto a division of the ECB.
2. Whatever the shock and awe that this policy would unleash on the unsuspecting people of Ireland, I do believe that there would be riots if Bank of England Sterling with the Queen's head on it were to be the currency dispensed from ATMs.
3. There are 4 clearing houses in the UK - England, Scotland, Wales and Northern Ireland.
4. The bank account structure in UK/RoI is the same - 6 digit sort code and 8 digit account number. IBANs are the same format also. In addition, the 4 RoI clearing banks with their own sort code range (Bank of Ireland, AIB, Ulster Bank and National Irish Bank) all use the same range on both sides of the border (EUR/GBP) - 90xxxx, 93xxxx, 98xxxx and 95xxxx respectively.
5. As this will be a money bill, it can be approved by resolution of the Dail that day. Given that the Supreme Court swallowed the Financial Emergency Measures in the Public Interest Bill 2009, I can't see it injuncting the resolution of Dail Eireann.
6. As with the euro changeover, the euro changeback will see it mandatory to not give euro in change and to lodge it back asap. It will be acceptable to trade internationally in euro for both business and retail.
7. As a de facto division of the ECB, the existing Central Bank would have to go the way of the RIC and be abolished.
Days Hotel Belfast - located in a lovely area of Belfast where the Union Jack flies from every lamppost and the kerbstones are painted blue white and red.
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