The Aussie dollar dived against the euro and US dollar this morning, after the Federal Reserve in America said it could start scaling back its huge economic stimulus programme later this year and end it by the middle of next.

The Australian dollar was trading at 0.93 US dollars and at 0.70 euro at 10.3oam this morning, after falling as low as 69.6 euro cents earlier today.

It is the first time that the Australian dollar fell below .70 euro since April 2010, according to Reserve Bank of Australia data.

The Federal Reserve has been buying $85 billion worth of bonds each month to keep long-term rates low and stimulate the economy.

Yesterday, the Fed sketched a brighter outlook for the American economy and chairman Ben Bernanke said the bank’s purchases could slow as economic growth continues.

With agencies

Bono leaves Finnegans Pub in Dalkley, after lunch with Michelle Obama and her daughters. (Pic: PA)

The wife of the world’s most powerful man is sitting across the table eating fish and chips at your local.

The stuff of dreams for most mere mortals, but for U2 frontman and self-styled anti-poverty campaigner Bono it’s just another lunch at the top table.

“We talked about everything and nothing,” the rock star said.

“It was a family lunch.”

Bono had invited First Lady Michelle Obama and daughters Malia and Sasha to his local pub, Finnegan’s in Dalkey, the exclusive south Dublin seaside town.

And President Barack Obama’s leading ladies eased their way into the supposed secret gathering.

Bono had arrived with wife Ali Hewson at about 1pm and remarked at the hundreds of onlookers: “I thought this was supposed to be secret.”

The Obamas looked like a regular American family holidaying in Ireland as they wrapped up their visit with a traditional pub lunch.

Hundreds of locals had crammed the narrow streets outside Finnegan’s on Sorrento Road, hoping to catch a glimpse of the girls.

The First Lady had lobster to start and they all dined on fish and chips, with cookies and tea for dessert, with around 60 guests.

The lunch appeared so relaxed that Donal Finnegan, one of the owners of the family-run pub, was unfazed.

“They were in holiday mode, just like any other family we get in here,” Mr Finnegan said.

Then again the pub is no stranger to A-listers, with Brad Pitt, Penelope Cruz and Mel Gibson among the big names to call in.

Mr Finnegan’s said Mrs Obama was “delightful”, and the girls “quiet and well mannered”.

But ever the epitome of discretion, the publican shed no light on who took care of the bill, saying only that Bono is a regular, coming in two or three times a week when at home.

Finnegan’s had been closed to the public all morning with the Stars and Stripes draped from a flag pole over the front door, a tell tale sign the rumours of a VIP visit were correct.

Waitress June Hart looked after their table.

Bookmaker Paddy Power sports temporary signage for Michelle Obama’s visit to Dublin. (Pic: PA)

With 14 years’ service at the pub under her belt, Mr Finnegan said there was no better woman for the job.

And while the world famous customers were “gracious and polite”, Ms Hart refused to talk about tips, saying it was a privilege to wait on them.

The Obamas made a quick exit from the building after about 90 minutes, heading north to meet President Barack Obama and travel on to Germany for the latest leg of his European meetings.

But their departure was not be complete before Mrs Obama’s hairstylist was summoned from a waiting jeep to the pub, no doubt to check her hair for the cameras.

The stylist, a sharply-dressed man with a Hollywood smile, teased the waiting press pack as he walked from the pub to his car, one of 12 in the cavalcade.

“How does it feel?” he asked as he held up his phone to take a picture of ranks of photographers.

The Obamas had enjoyed a two-day whistle-stop visit of Ireland, which included a private guided tour of the Wicklow Mountains National Park in the morning.

The sun was shining for their trip to Glendalough, but the heat brought swarms of unwelcome visitors – hungry midges, forcing 12-year-old Sasha to flail her arms as she toured monastic ruins.

They were given a lesson on the sixth century site founded by St Kevin by local tour guide George McClafferty.

The valley, in the heart of the Wicklow mountains, offers some of the most popular rural landscapes in Ireland and is a well-worn tourist path for visitors to the east coast.

The trio learned about the legendary Deer Stone when Mr McClafferty told the tale of a wild doe appearing before St Kevin who milked it and fed two orphan babies from the hollowed-out stone.

Dressed in a casual outdoor jacket, patterned white jeans and grey Converse trainers, Mrs Obama nodded and smiled, asking the guide questions about the legend.

Her daughters paid close attention too, looking around the hills in their jeans and trainers – Malia in a classic navy hoodie, while Sasha wore a baggy grey jumper.

Mr McClafferty took a seat on the famous stone as he shared some of the folklore of the site, founded in the sixth century.

“That gives great power,” Mrs Obama told him as she triumphantly raised her fists in the air.

The Obamas were shown around the monastic ruins in the heart of the glacial valley and walked around the round tower, and Sasha was given the honour of closing the door to the ruins of St Kevin’s Church, which dates back 1500 years.

The teenager was handed a key and she locked the door, before turning to her older sister and mum, giving them a high five.

They may be used to dining with rock stars, dignitaries and the world’s powerbrokers, but the Obama girls, together, appear just a regular family.

British Prime Minister David Cameron welcomes US President to the G8 Summit at Lough Erne Resort in Fermanagh.

Leaders of the world’s most powerful countries feasted on local Northern Irish delicacies at the end of the first day of the G8 summit in Lough Erne.

The eight G8 prime ministers and presidents – David Cameron, US president Barack Obama, Russia’s Vladimir Putin, Chancellor Angela Merkel of Germany, France’s Francois Hollande, Italian PM Enrico Letta, Canada’s Stephen Harper and Shinzo Abe of Japan – were joined by European Commission and Council presidents Jose Manuel Barroso and Herman van Rompuy for the intimate meal at the end of the first day of the summit.

The 10 statesmen were alone in the room without advisers, in order to create an atmosphere to meet Mr Cameron’s hope for “a meeting where we can look each other in the eye, cut through the obstacles and the opposition and generate the political will to solve the problems we face”.

The working dinner, which focused on foreign affairs issues including Syria and Libya, took place in a waterside lodge at the luxury Lough Erne golfing resort near Enniskillen, where the two-day summit is being staged.

The room features a traditional Irish hotel bar and fireside seats to encourage the leaders to linger for a chat over a glass of whiskey or a pint of Guinness.

The menu for the meal was: Kilkeel crab, prawn and avocado salad, roast fillet and braised shin of Kettyle beef, with artichokes and Antrim new potatoes, apple crumble with Bushmills whiskey custard.

US First Lady Michelle Obama addresses the crowd on stage at the visit by her and her two daughters Malia and Sasha to the Gaiety Theatre, Dublin for a special performance of Riverdance. Pic: Julien Behal

Michelle Obama has arrived in Ireland for a 24-hour visit while the G8 summit takes place.

The US First Lady flew into Dublin Airport with daughters Malia, 14, and Sasha, 12, after her appearance in Belfast, before travelling to Trinity College to learn more about the family’s Irish heritage and ancestry.

Mrs Obama was greeted on the runway by Ireland’s Deputy Prime Minister, Tánaiste Eamon Gilmore, and Lord Mayor Naoise Ó Múirí.

The Obamas later enjoyed a special performance of Riverdance at the Gaiety Theatre before spending the night at the Shelbourne Hotel.

At Trinity, the Obamas visited the Old Library and were shown the Book of Kells, a ninth-century, elaborately decorated gospel manuscript made by Irish monks.

Mrs Obama, Malia and Sasha were also shown the birth registry of President Obama’s Irish ancestors from around the village of Moneygall and old maps detailing the family’s homestead in Co Offaly.

Dressed casually in jeans and jackets, the girls listened carefully and chatted to tour guides as they happily strolled the length of the Long Room in the famous Old Library of Trinity – Ireland’s oldest university.

The First Lady flicked through the pages of a booklet compiled by Trinity’s genealogists, pointing out interesting facts to Malia and Sasha. The elder daughter nodded and smiled, appearing relaxed in the spotlight, dressed in a khaki jacket and black cut-off trousers, with bright pink flat shoes.

Her younger sister Sasha looked like any 12-year-old girl on a family holiday, in her bright pink jumper and blue slouchy jacket, dark pink trousers and green pumps.

Mrs Obama is the subject of a new book which links her ancestry to Protestant Irish immigrants who were plantation and slave owners in the southern states of the US in the 1800s.

The US embassy in Dublin said officials have been aware of the First Lady’s reported ancestry but nothing has been confirmed by the White House.

A huge security operation was in place in Dublin city centre for the First Lady’s trip with parts of St Stephen’s Green and Kildare Street, where the Leinster House parliament is located, closed to through traffic.

The Obamas were given a presentation on their family genealogy and connections to Ireland, compiled by heritage and archive company Eneclann which has been spun out of Trinity research. It researched President Obama’s ancestry from Falmouth Kearney, his second great-grandfather to his seventh great-grandfather, Joseph Kearney.

It identified John Kearney, whom college researchers described as a distant cousin of the US president, who went on to become the provost of Trinity, and later the Church of Ireland bishop of Ossory, a diocese in the counties of Kilkenny, Laois and Offaly.

The family were also shown an original 19th century map held by the National Library of Ireland which shows lands of Gorthgreen from where some of the family originated.

Trinity provost Dr Patrick Prendergast, who showed the Obamas through the Old Library, said it was a honour to have them at the university. The college chief told the First Lady their visit was particularly poignant because of the Kearney connections.

“As a country, America has welcomed many of our graduates over the years where a large number of our alumni are living. Our graduates who play a critical role in shaping the knowledge economy are our diaspora,” he added. ends Page 6 President Obama’s distant Irish cousin Henry Healy – who the US leader jokes is known as Henry VIII because of their family ties – presented Michelle and the girls with gifts during their visit to Trinity. He said both daughters were delighted to get their certificates of Irish heritage. “Both of them were pretty amazed with the certificates,” Mr Healy said.

“Competing with their friends, now they can prove they’re more Irish than them.”

President Obama and First Lady Michelle in Belfast with Northern Ireland’s Deputy First Minister Martin McGuinness and First Minister Peter Robinson.

President Barack Obama urged Northern Ireland’s politicians today to keep working towards a permanent peace.

Fifteen years after the signing of the Good Friday peace agreement which cleared the way for the power-sharing executive in Belfast, the US president said the world was watching for the next stage of the process.

He hinted it was time for an end to segregated education and housing.

He said: “You need to get this right. You set the example for those who are seeking peace to end conflicts of their own.

“You are their blueprint to follow. You are the proof of what is possible. Hope is contagious. They are watching to see what you do next.”

During an uplifting keynote address to an invited audience of 2,000 people, mainly school students, Mr Obama lauded the Northern Ireland peace process as a model and promised that America would continue to support the Stormont political system.

He added: “Peace is not just about politics. It is about attitudes, a sense of empathy and breaking down barriers in hearts.”

Peter Robinson and Martin McGuinness, the First and Deputy First Ministers of the Stormont power-sharing executive, greeted the president on arrival at the Waterfront and held a brief private meeting before Mr Obama appeared on stage.

Mr Obama acknowledged the challenges that exist.

“There are still people who have not reaped the rewards of peace, there are those who are not convinced that the effort is worth it.

“There are still wounds that have not been healed and communities where tension and mistrust hangs in the air. There are walls that still stand, there are still many miles to go.” He said it was within his audience’s power to change that.

“Whether you are a good neighbour to someone from the other side of past battles, that is up to you,” he warned. “Whether you treat them with the dignity and respect they deserve, that is up to you. “Whether you let your kids play with kids who attended a different church…that is up to you.” The president made a direct appeal for the young people in the audience to do all they could to ensure that Northern Ireland’s peace was lasting.

“Peace is indeed harder than war,” he said. “It’s constant fragility is part of its beauty. A bullet need only happen once but for peace to work we need to be reminded of its existence again and again and again.

“You must remind us of the existence of peace. Remind us of hope again, again and again that despite resistance, setbacks and despite hardship, despite tragedy… You need to remind us of the future.”

Before the president took to the stage, his wife, Michelle, said it had been a priority to meet young people who would be the future leaders of society. The couple are accompanied on their trip by daughters Sasha and Malia.

“Wherever we go, no matter what is on our plate, we always do our best to meet young people,” said Mrs Obama.

Even though Mr Obama visited the Republic two years ago, this is his first trip to Northern Ireland. Later he will travel to the luxury Lough Erne golf resort in Enniskillen, Co Fermanagh, where he will join leaders including Russian Premier Vladimir Putin and German Chancellor Angela Merkel for the two-day G8 economic conference.

Savita Halappanavar. (Pic: PA/Irish Times)

Medics missed an early opportunity to terminate the pregnancy of a woman who later died from septic shock when she suffered a miscarriage in an Irish hospital, a scathing report has found.

The chairman of the clinical inquiry into the death of 31-year-old Savita Halappanavar revealed that he would have ended her pregnancy when she showed initial signs of the fatal infection.

But the renowned British professor, Sabaratnam Arulkumaran who headed the review on behalf of Ireland’s Health Service Executive, refused to state when he would have acted or if it would have saved the dentist’s life.

“It is very difficult. It’s overall clinical judgment. I wasn’t there to see how Savita was,” he said.

The professor said that had Mrs Halappanavar had four-hourly pulse rate and temperature checks which recorded a rise, more tests could have been ordered and possibilities discussed.

“Unfortunately none of this was done so I can’t really say when would have been the ideal time,” he said.

The review team highlighted a litany of failings that made a significant contribution to the Indian woman’s death:

• The interpretation of Ireland’s strict abortions laws that only allows termination when there is a real and substantial risk to a woman’s life
• Staff did not adequately assess and monitor Savita as an infection took over her body
• She was not offered all management options including termination
• Clinical guidelines relating to the prompt and effective management of sepsis at Galway University Hospital were also not followed, which includes removing the source of an infection

Mrs Halappanavar’s waters broke in the early hours of Monday morning and her condition deteriorated in the early hours of Wednesday morning.

Her widower Praveen, who is out of the country, has maintained that she repeatedly requested a termination but was refused because a foetal heartbeat was present.

Professor Arulkumaran said the consultant’s plan to “await events” is appropriate when there is no risk to the mother or foetus, but stressed that monitoring, evaluation and clinical investigations would likely have led to reconsidering the need to expedite delivery.

By the Wednesday, a diagnosis of sepsis secondary to chorioamnionitis, an infection of the foetal membranes, was made which again would have merited expediting delivery to reduce the risk of infection to the mother, the review team said.

“The gravity of the situation was increasing but appears not to have been recognised and acted upon,” the report found.

“Awaiting the blood results and not fully appreciating the deteriorating and complex clinical situation missed an opportunity for early and appropriate intervention with the help of multidisciplinary input.”

It was almost another five hours before consultant Dr Katherine Astbury was called back on ward and a decision to terminate the pregnancy was taken, but Mrs Halappanavar later delivered her dead baby daughter.

Within hours she was in a high-dependency unit and intensive care where she died four days later from multi-organ failure from septic shock and E coli.

The report found that there was an over-emphasis on the need not to intervene until the foetal heartbeat stopped and not enough emphasis on the need to monitor and manage the risk of infection.

“The interpretation of the law related to lawful termination in Ireland, and particularly the lack of clear clinical guidelines and training, is considered to have been a material contributory factor in this regard,” the report said.

The Irish government moved to introduce legislation for limited abortion, as required by a 1992 ruling in the Dublin Supreme Court, on the back of a public outcry over Mrs Halappanavar’s death.

Health Minister James Reilly said he has serious concerns about the revelations.

“It is a hard-hitting report which spares nobody and doesn’t pull any punches,” he said.

“It lays bare a set of unacceptable factors that led to the tragic death of a young woman.”

The review team warned that similar incidents with a similar clinical context could happen again in the absence of clarity on the law and a lack of national clinical guidelines.

Prof Arulkumaran recommended that clinicians, health and social care regulators and politicians consider the law and guidelines on the management of inevitable miscarriage early in pregnancies and where there is a risk to the mother from infection.

The long-awaited report has been published two months after an inquest jury ruled unanimously that Mrs Halappanavar’s death was by medical misadventure.

The misadventure verdict found there were systemic failures or deficiencies in Mrs Halappanavar’s care before she died, but coroner Ciarán MacLoughlin said these failures did not contribute to her death.

Razor wire laid has been in fields near the Lough Erne resort in Co Fermanagh. (Pic: Paul Faith/PA)

Northern Ireland’s Deputy First Minister Martin McGuinness has urged anti G8 protesters to maintain peace on the streets next week.

He warned hardline anarchists intent on causing mayhem to stay away from legitimate demonstrations being held in Belfast and Enniskillen.

“I think all the people who come here from other parts of the world need to be very conscious that they are coming to a place that is no longer at conflict, to a country at peace. I would like them to respect our peace when they come.

“We certainly respect their right to come and articulate their views around issues that I feel equally strongly about such as world conflict, hunger, poverty, unfair taxation,” he said.

A stark warning was also issued to dissident republicans who may seek to exploit the opportunity presented by the G8 to gain global publicity.

Mr McGuinness added: “I also say to people who are from here who might think that this is an opportunity to exploit (it) for their own interests, I believe they would be making a huge mistake because they run the very great risk of being confronted by peaceful protesters who want absolutely nothing to do with any violence or conflict on the streets.”

Round-the-clock protection has been put on landmark properties across Belfast as the PSNI ramps up security measures ahead of the G8 summit on June 17 and 18.

A ring of steel has been erected around the luxurious Lough Erne complex where world leaders including US president Barack Obama, Russian president Vladimir Putin and German chancellor Angela Merkel will meet.

Roads in the area have been closed to traffic and vehicle check points have been set up close to the remote resort.

On Saturday, thousands of anti capitalist protesters are expected to take to the streets of Belfast to show their opposition to the G8 during a trade union rally.

Thousands more are expected to travel west to Enniskillen for another protest organised by Unite, Britain’s biggest trade union and NIPSA which represents thousands of public sector workers in Northern Ireland on Monday night. Marchers will snake their way through the Co Fermanagh town towards the huge security fence which encircles the five-star hotel.

Shops, restaurants and multinational banks are expected to shut or board up their fronts to protect premises if violence flares. Plastic sheeting has already been placed over stained glass windows at Belfast City Hall where marchers will converge on Saturday.

Queen’s University has said it plans to close all of its buildings over the extended weekend amid fears they could be targeted by militants.

An additional 3,600 police officers have been drafted in from across Britain to provide back up for the 7,500 PSNI patrolling the streets.

Significant disruption is also expected with check points set up around Belfast International Airport from where the world leaders will arrive and depart.

Northern Ireland’s First Minister Peter Robinson said he has confidence that the PSNI will be able to cope with any disorder.

“There are people, no matter where you would have this event in the world, who want to protest. If people want to protest the option is there. We encourage them to do so peacefully. If anybody is coming here to cause trouble then we look to the PSNI to deal with it. They are well experienced and equipped to do so.

“The PSNI have been dealing with these kind of issues for a very long period of time. There is a lot of experience in their ranks and they have obviously been augmented by officers from other police services. I have no doubt they will be able to deal with issues but I do not want to talk up the prospect of upheaval and violence. The police will do what they always do, they will prepare for the worst and hope for the best,” the DUP leader said.

Political leaders hope the G8 will positively market Northern Ireland to a global audience and demonstrate the changes that have taken place since the signing of the Good Friday Agreement in 1998.

Mr Robinson added: “We are now in a new era in Northern Ireland. Put simply the Prime Minister would not have had the confidence to put the G8 in Northern Ireland if we had not had the transformation that we have had over the last number of years. It is in itself a signal that Northern Ireland is a new place, it has changed dramatically and there is a level of peace and stability which mirrors that which you would see in any other part of the democratic world.”

Mr McGuinness said the significance of hosting the G8 in a former conflict zone would not be lost on the world leaders.

“It should not be lost on the world leaders that they are coming to a country that is at peace and has successfully managed to forge agreements which are widely admired throughout the world. I would hope that they see us as a beacon of hope for the resolution of other conflicts throughout the world,” he said.

Drogheda Mayor Paul Bell (centre) with the McKeon family as they released doves at service in the Co Louth town in October 2012. (Pic: PA)

The Mayor of Drogheda Paul Bell has said that Jill Meagher was the innocent victim of a brutal and evil crime.

He said the population of her home town in Co Louth is devastated and he questioned why Adrian Bayley was “at large” in the community.

“The evidence has reignited a sense of collective hurt and while I understand sentencing has yet to be passed, like every decent citizen around the world I believe there are questions to be answered about how such an individual was allowed to be apparently at large in the wider community,” he said.

“We in Drogheda express our solidarity with her family here in Ireland and in Australia and with all good citizens in Melbourne and in Drogheda who want to see justice for Jill.”

Meanwhile, Victoria’s Premier Denis Napthine has admitted that the state’s parole system was flawed and that it failed Jill Meagher.

Under new laws recently brought in by the Victorian government, sex offenders who commit further crimes while on parole go back to jail.

“There is no doubt the system failed Jill Meagher,” Dr Napthine said.

“Parole in Victoria is a privilege not a right, that is why my government has changed the Victorian parole rules so that sex and violent offenders who commit further offences while on parole will go straight back to jail.

“This also applies at the point of charge and conviction, which makes this the toughest parole regime in Australia. Under the changes we have already introduced the offender would have been back in jail, not on the streets,” he said.

The Victorian government has brought in a former High Court judge to review the structure of the parole board.

Dr Napthine also paid tribute to Ms Meagher’s family and said the thoughts and prayers of all Victorians are with them.

“Along with all Victorians I share the admiration we all feel for the enormously dignified way in which Jill Meagher’s family have conducted themselves through this horror and the way they have conducted themselves through this whole process,” he said.

“Our special thoughts and prayers and love are with them.”

Archbishop Eamon Martin of the Irish Bishops’ Council. (Pic: PA)

Ireland’s Catholic bishops have claimed people are being misled in the debate over planned abortion law reform.

The Church hierarchy said every citizen should be concerned about legislation on when terminations can be carried out and that this is a defining moment for the country.

A statement from the Irish Bishops’ Conference (IBC) said they wanted to challenge statements that the proposals are about saving lives.

“The right to life is the most fundamental of all rights; it is the foundation of all other rights. No individual has the right to destroy life and no state has the right to undermine the right to life,” the bishops said.

“Yet the Irish government is proposing abortion legislation that will fundamentally change the culture of medical practice in Ireland.

“For the first time legislation will be enacted permitting the deliberate and intentional killing of an unborn child. This represents a radical change. Every citizen, not just people of faith, should be deeply concerned.”

The statement was issued as the bishops met for a second day at their June general meeting in Maynooth.

Last Saturday thousands of people demonstrated in Dublin to express support for the pro-life movement and their opposition to abortion.

The proposed legislation, which includes a provision for abortion to be carried out if a woman is suicidal, is expected to be passed into law by the summer.

The IBC said Catholic teaching on medical intervention is clear.

“Where a seriously ill pregnant woman needs medical treatment which may put the life of her baby at risk, such treatments are ethically permissible provided every effort is made to save both the mother and her baby,” the bishops said.

“This is different from abortion which is the direct and intentional taking of the innocent life of the unborn. No matter what legislation is passed in any country, abortion is, and always will be, gravely wrong.”

The bishops also claimed that the government is under no obligation to legislate for the 1992 Supreme Court X case where a 14-year-old sought access to a termination after being raped.

“People are being misled. We challenge repeated statements that this legislation is about saving lives and involves no change to the law or practice on abortion,” the bishops said.

“Legalising the direct and intentional destruction of the life of an unborn baby can never be described as ‘life-saving’ or ‘pro-life’.”

The bishops claimed the legislation was “contrary to clear psychiatric evidence”.

They said it is possible to envisage the deliberate destruction of a child right up to the moment of birth.

They claimed any loosening of a ban on abortion will open the door to ever wider availability.

The bishops called for enhanced medical guidelines, which do not envisage abortion, to provide clarity and a morally, legally and medically acceptable way forward.

They also raised the issue of freedom of conscience and the need for the State to respect the principles of its citizens, including politicians, on the issue of abortions.

They also warned that hospitals, doctors and nurses with certain religious beliefs and ethos should not be forced to ask for a patient to be treated in another institution or by other medics.

“It is ethically unacceptable to expect doctors, nurses and others who have conscientious objections to nominate others to take their place. Neither should any institution with a pro-life ethos be forced to provide abortion services,” the bishops said.

President Michael D Higgins has warned of ‘speculative markets’ replacing the power of parliaments. (Pic: PA)

President Michael D Higgins has warned economic decisions in the European Union could threaten democracy.

Just weeks after last coming under fire for criticising the EU and its austerity measures, the outspoken president said he was concerned that elected parliaments are often overruled by the markets.

“Speculative markets, even rating agencies, appear at times to be more frequently quoted as the source of ultimate, even enforced decision-making as to economic options for the future, rather than the elected parliaments,” Mr Higgins said.

“It is to parliaments citizens look for the expression of the debate and the articulation of the choice of options which might be made available in public policy.

“It is something that must give us all cause for concern as leaders.”

The president made his remarks during a state visit to Croatia, which will become an official member of the EU on July 1.

His trip coincided with that of Taoiseach Enda Kenny, who travelled to Lithuania and Latvia on Thursday representing Ireland as current president of the Council of the EU – a post Lithuania will take up next month.

As Ireland’s six-month presidency draws to an end, Mr Higgins warned the union must be aware of the social effects of its economic decisions.

He was forced to defend himself last month following accusations that he had gone beyond the constitutional remit of his office by criticising austerity imposed by Europe.

The president, who is not supposed to interfere with politics, claimed there had to be a radical rethink of the EU and how its members handle the ongoing economic crisis.

At the time, Mr Higgins said he would never interfere with matters of legislation and that he takes seriously the oath he took when he entered office in 2011.

Speaking at the University of Zagreb, the president said Europe must show solidarity with the most vulnerable, and focus on sustainable growth and job creation.

“We cannot allow a crisis in one paradigm of economics to lead to a crisis of political legitimacy,” Mr Higgins added.

“We must believe in our intellectual capacities to bring into being a suite of proposals, macro and micro in their economic scope that will serve as effective instruments for our political and social purposes.

“We need a pluralism of policies based on all of our disciplines in the inherited tradition and the imaginative capacity of all our Europeans.”

Despite his warnings about the dangers of the EU, the president insisted that countries stand to gain from joining the union.

He said the biggest beneficiaries of the EU over recent years have been the 12 newest member states, which saw their economic growth boosted by an average of 1.75 per cent each year from 2000 to 2008.

He also pointed out the benefits reaped by Ireland since joining the union 40 years ago.

He said only 4 per cent of students went on to third level education in 1973, compared with 48 per cent today; exports have grown and the flow of foreign direct investment from outside the EU has become a significant factor in the country’s development.

He said structural funding from Europe had allowed Ireland to invest in its infrastructure which helped modernise the economy.