Madam, - Rodney Thom and Brendan Walsh (June 18th) refer to the period of unprecedented economic growth between the break-up of the ERM in 1993 and the introduction of the euro in 1999. What followed after the introduction of the euro was even more spectacular. Our exports increased by 16 per cent in 1999, by 26 per cent in 2000 and by 12.5 per cent in 2001. We had trade surplus increases of 29 per cent, 27 per cent and 25 per cent, respectively, in the same years.
As the rate at which Ireland entered the euro was a very competitive one, our exporters enjoyed a currency-based competitive advantage in euro-zone markets. This is only part of the picture, however. The relative strength of the US dollar and sterling made the US and UK markets even more attractive than markets in Europe. That has changed in recent months so the pattern of our trade may also change.
There are factors other than currency which influence the pattern of trade. One is knowledge of the mechanics and culture of the market, which Irish exporters have in abundance in relation to the UK but not to euro-zone markets. Another is the product itself. Products have to be designed for the market. Many reports - the latest being that of the Irish Council for Science, Technology and Innovation - have pointed to the lack of investment in product design by Irish-owned industry.
European markets demand well-designed and innovative products. Therein lies a big challenge for our manufacturers. Let us hope the UK will decide to join the Economic and Monetary Union, but not at a rate which would effectively devalue sterling by 10 to 15 per cent. - Yours, etc.,
COLUM MacDONNELL , Gowrie Park, Gleanageary, Co Dublin