A Bluffer's Guide to the Euro and monetary union - part one

Revaluation, inflation and interest rates - three words that can send most readers of any newspaper into sleep mode. Add in a discussion of Common Agricultural Policy (CAP), structural funds and the Amsterdam Treaty and the vast majority of us are moving on to greener pastures. This week An Phoblacht outlines what the punt's revaluation really means and offers a bluffer's guide to the Euro and monetary union.

McCreevy's punt shuffle

     
This is probably the last time any Dublin Government Finance minister will be able to unilaterally change the value of the punt.
No matter how much you think it doesn't affect you, last weekend's decision by Charlie McCreevy, Dublin Government Finance minister, to announce a 3% revaluation of the punt was a major policy decision that has ramifications for us all.

On a separate front, funding for the CAP is set to fall by 15% over the next seven years. Structural and cohesion funds from the EU could also fall by up to 50% over the next seven years. The funding announcements were made by the EU Commission and are to be debated and discussed over the next year.

The structure and management of the 26-County economy is being fundamentally altered before our eyes. The last week has seen significant steps being taken towards participation in a single EU currency. What was unique about Charlie McCreevy's announcement was that this is probably the last time any Dublin Government Finance minister will be able to unilaterally change the value of the punt.

From 1 May the rates will be set for entry into a single currency. On 1 January 1999 the punt will be part of a single currency and only the unelected governors of the European Central Bank will control our currency.

In order to get other EU states to agree to the revaluation McCreevy also had to concede ground on some other important issues in the coming months. For example, tax revenue is growing in the 26-County economy and money is available for vital public sector spending increases after over a decade of cutbacks.

Increased spending on education, health and social services is now possible. Well no, it isn't. McCreevy agreed that any increase in tax revenue would be used to pay off debt rather than be spent on much needed services.

This is just one example of how our economic sovereignty has been and is being eroded. The revaluation of the punt was really another step towards removing control of the Irish economy out of our hands into those of unelected EU bureaucrats and bankers.

EURO - a bluffer's guide part one

Why a single currency?

Stability is the goal of those who support a single currency. Price stability and currency stability will make life easier not for the ordinary Joe Soap but for the transnational companies that dominate our economy. As they export goods from state to state currency changes and prices changes can affect margins and this puts profitability at risk, so one currency across 12 or 15 states is an attractive proposition for the ordinary everyday multinational conglomerate.

What about the ordinary citizens?

The big selling point seems to be that you won't have to get ripped off changing currencies for the foreign holidays. So for two weeks a year if you're one of the lucky ones you will be able to lie by the pool, on the beach or paraglide, sight see etc all in the safe knowledge that a Euro in Ireland is the same Euro in Disneyland Paris.

Mind you, try using a Six-County five pound sterling note in a London pub and you will see how this whole project could be easily wrecked. Many outlets still charge a commission for using what is their own currency.

When was the plan hatched?

Believe or not the Allies were plotting international currency regimes in 1944 before the end of World War Two. They created the International Monetary Fund (IMF) to oversee a fixed currency rate between the dollar and sterling. When the EEC was founded in 1957 one of its objectives was to create a ``zone of international monetary stability''.

In 1961 the EU Commission began to study how to construct a single currency. In 1971 the Werner Report was published. It came up with the simple idea that a single currency would only work if all the participating states had similar economic policies. He called the plan ``Parallel Progress''.

What happened then?

Werner's report was ignored for nearly a decade and various attempts at currency stability failed until the 1980s when the EU, now dominated by conservatives, decided to create parallel progress by dictating what economic policies the now 12 EU member states should have.

Deregulated market economies all round were ordered and so began the next stage of turning plans into action and setting out on the road to a single market and a single currency.

More next week

Crampton strike ends

The long running dispute between building contractors G&T Crampton and Dublin bricklayers was resolved last week. The positive outcome of the strike in favour of the building workers will have repercussions for the building industry throughout the 26 Counties.

G&T Crampton agreed to employ bricklayers directly instead of using sub contractors and they have also agreed to pay half of the union's legal costs. Previous to the dispute ending Crampton had claimed legal costs of £480,000 from the Building and Allied Trades Union (BATU).

Crampton have now, according to the terms of agreement between them and BATU, ``conceded the principle of employing direct labour for bricklaying''. Ten bricklayers who were involved in the dispute which spread to two Crampton sites in Dublin will now be re-employed.

The resolution of the dispute is important for two different reasons. First, it establishes the right of workers to proper on the books wages with full PAYE contributions ensuring their right to pensions, holiday and sick pay as well as other entitlements.

Secondly, the resolution of the dispute shows that it is possible to bypass the inequity of the Industrial Relations Act though in the long run the Act must be repealed.

Hollywood strike looms

Blaming workers for management's failures is a feature of labour markets throughout the world. The latest workforce in the firing line are those employed in Hollywood's film industry. Last week studio bosses moved towards confrontation with actors unions when they presented a list of over 100 cost cutting proposals during contract negotiations.

The actors' unions have hit back with their own demand of an 8% wage increase in minimum pay as well as higher fees when programmes they featured in are given repeat runs on television.

To add to the crisis Wall Street financiers are concerned about ``ballooning production costs'' in the film industry. However, there is little mention of the millions of pounds films are taking at the box office and in the case of television remarkable fees have been paid this year for TV programmes such as Friends and ER. It seems fundamentally wrong that the same industry that glorifies the seven and eight figure salaries that stars can command for a few weeks work can look to exploit other less well paid actors.