One of Ireland's top investment consultants and academics has said a solo effort by Ireland to break free of the euro and re-establish its own currency would spell disaster for the nation's economy.
Writing in his weekly Serious Money column in the Irish Times, Charlie Fell, labeled the "nuclear option" of the country making a break for it from the single currency "an awfully dumb solution".
He said every move would have a knock on effect on everything else, with the nation's financial health eventually collapsing like dominoes. People with domestic deposits would move them offshore to try to secure their values, and in doing so would necessitate a staggering rise in interest rates to prevent a complete collapse of the banking system.
Fell pointed out, however, that the competitive devaluation that could come from a withdrawal would not likely be enough impetus to make the idea tenable. The ejection from the EU that a withdrawal would likely cause, the increase in crucial import costs and lack of rising commodity exports all outweighed the potential benefits to be gained.
He concluded, "There are no easy solutions to Ireland’s economic predicament, but the nuclear option is simply unthinkable and akin to economic suicide."
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