Belfast Telegraph

Sammy needs to act on falling euro before we pay the price

By Liam Clarke

The fall of the euro to 80p has caused general alarm - especially here in Northern Ireland, where we do so much business with the Republic and compete with it for agricultural exports to Britain.

Only a few months ago, the rate was 86p. It could clearly fall further, driving up the cost of our produce relative to the south.

The lowest the euro has been in the past 10 years was 62p in 2002 and the highest was close to parity (98p) at the end of 2008.

Fortunately, all this is within the control of the UK Government and Bank of England. They have the power either to devalue the pound or simply print more money (so-called 'quantitative easing') to narrow the gap with the euro.

That would be inflationary, it would drive up the price of imports, like oil and other raw materials. It would also create billions that could be spent on compensatory measures, like reducing fuel duty, or improving public services.

It would generally help the private sector, by improving the competitiveness of our exports and the price, in foreign currency, of visiting our shores. There is a fine balancing-act; the precise rate we aim for would take a careful cost/benefit analysis.

But it is something which Sammy Wilson should be raising with George Osborne.

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