Dáil Éireann debate -
Wednesday, 6 Nov 1996

Vol. 471 No. 2

Central Bank Bill, 1996: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Sargent

I wish to refer to what has been said to me outside the House regarding the process which has given rise to this Bill and to the controls that will be put on the economy, now and in the future. At a recent public meeting a councillor colleague of mine, a Minister of State, said that the resources and allocations that may in the future be expected or be at the discretion of the Government would in many ways be controlled more centrally than at present. For example, at budget time we would have to take into account stricter controls on the Department of Education and, by implication, other Departments.

On the issue of economic and monetary union, I asked the Minister for Finance yesterday if the Government would be regulated by monetary union to the extent that allocations of national financial resources to different Departments would be controlled from a European base. In his reply the Minister said that there was no provision for regulation under economic and monetary union. However, in reply to supplementary questions he referred to the criteria set out in paragraph 104 of the Maastricht Treaty and its associated protocol, with which we are all familiar, which defines the levels of deficit and debt in terms of overall Government spending as a proportion of GDP. It was said that these do not seek to impose any constraint on the means taken by member states to meet these obligations.

I hope the Government would not expect people to think that there is not a problem simply by it saying that there are no rules to state how we should meet our obligations. While I would not like to carry the analogy further than the minimum, it is worth pointing out that the same argument is often heard from some of the more unscrupulous drug dealers when they say they are not asking people to rob money or carry syringes to make attacks to feed their habit but that they want the money and they do not care how it is obtained. This is essentially what is being said here: we are not being told from which Departments to cut funds but we are told that we will have to be stringent. This must be realised and faced up to.

This Bill is being introduced as part of a prelude to economic and monetary union. I hope the debate on economic and monetary union will be broadened so that we see the bigger picture and not simply each Bill, item by item, as if it is part of the Government's everyday legislative programme. It is something much bigger and this Bill is part of something far more significant.

At the EU Council of Ministers meeting yesterday there was unanimous agreement that money would be provided to Korea to help with its nuclear programme. Korea wants to build nuclear plants, ostensibly to generate electricity. We are part of the EU some of whose member states have a well known interest in the proliferation of nuclear plants around the world. We must courageously address the issue of principle which challenges us.

This issue is a warning. If it is possible for us to be corralled or cajoled into supporting the nuclear industry in Korea without economic and monetary union, I shudder to think what our approach will be when we are part of economic and monetary union. It will probably be a resignation to the reality that there is little we can do. People need to know this; it must be debated.

Not too long ago mortgage and interest rates made matters very difficult and people felt helpless. The Central Bank then acted in some way as a buffer against the vagaries of European monetary trends. I hope when we take on board all that economic and monetary union involves we will ensure that there are adequate safeguards.

Some people consider that it is better that we be controlled more centrally from Europe than centrally from Dublin. I do not agree with this. Such people have a jaundiced view of the famous phrase regarding openness, transparency and accountability. There is much secrecy. For example, while written rules and regulations supposedly govern the tendering process in Departments it is often difficult to ascertain what is going on and to obtain information on who is accountable and who is making decisions. I am not talking about elected representatives. I am talking about other people who make decisions. I hope this begrudging factor does not inform the debate.

I do not believe central European activities or decision-making will be less secretive than decision-making at a national level. If the Bundesbank decide monetary policy, it may be even more difficult to get information about the motivation behind those decisions. It will certainly be much more expensive to make telephone calls to obtain such information. This is in stark contrast with what happens in many other Governments. In Canada anybody who submits a tender at official government level is invited to attend when the boxes are being opened. It is similar to a polling day here. They know to whom the tenders are awarded and why they were awarded to them. This highlights some of the progress that remains to be made here in regard to accountability, a problem that will not be resolved by economic and monetary union.

The Green Party canvassed against acceptance of the Maastricht Treaty and there are still grounds for opposing it. The decision to accept Maastricht was democratically taken and we will have to live with it. The Central Bank may control the monetary life of the country although, as Deputy McCreevy stated, this Bill may mean a diminution of that control. Some aspects of Central Bank control, economic and monetary union and this Bill need to be debated in a broader manner. Our European neighbours have allowed us benefit significantly from Structural and Cohesion funding, which has improved the lot of our people. How many of us ask why Germany, France and Britain, the main benefactors of European funding, want to give money to peripheral regions and countries with a low GDP. We are not given a clear answer in that regard, we are told it is in the interests of greater brotherly or sisterly business. It is a matter of selling more products in a wider area, with restricted barriers. Do the countries which have contributed money to our economy really hope we benefit and that it will create local employment? Do they hope production will thrive in our towns, cities and villages to meet their needs? Do they hope their location here will enable us sell locally and cut down on vast transport costs which involves a great deal of air and sea travel? I do not believe they have those interests at heart. They want free access to markets and they want to control local finance.

Much lip service is paid to the term "subsidiarity" in European structures, but there is not much subsidiarity in the economic and monetary union process. I understand producers are no longer allowed to state the country in which their products are made. They may only state they are made in the EU. We are facing a rough ride with economic and monetary union, but I hope I am proven wrong. We must keep our eyes open.

The Government frequently claims the economy is doing well and boasts about job creation. If genuine jobs were created, they would be worth boasting about. I asked the Taoiseach recently if the statistics for job creation can be broken down into part-time jobs, contract work or any type of sustainable employment. There is no measure of the quality of jobs being created, many of which are low paid. I recently spoke to an economist and former German Minister in Helmut Kohl's Government who told me that, while German companies were doing well, they locate here to avail of a lower cost base. They are not coming here for the love of the people, even though that perception is often mooted. It would be nice if that were true. While I am sure some German companies are interested in what we have to offer from a tourism point of view, essentially they locate here to maximise profits.

Will the process on which we are embarking ensure a more secure future for this and future generations or do we have a choice? The Maastricht Treaty has ensured we do not have a choice. We can learn from countries that have worked alongside a twin track — I am not talking about Northern Ireland — where local economies work alongside the macroeconomic climate. France has managed to do this with locally produced bread, wine, cheese and so on. Some people have been able to do this here, but not with official support. I am talking about the phenomenon which started in Canada and is known as the local exchange trading systems. The Central Bank would not have control over them, although they could be dealt with under Part V of the Bill which deals with bureaux de change. However, the reference in the Bill relates more to airports and high street banks than locally created currencies. This position is a reality in many towns and villages where a large proportion of skilled people have time on their hands because they cannot find paid work in the formal economy. They are effectively benefiting their local area by keeping wealth in it and benefiting each other by serving people's needs through a Golden Pages type directory of services and skills on which they put a value and which they agree will be their unit of currency.

Mrs. Doyle

Perhaps the Deputy will now address the Bill.

Mr. Sargent

The matter is seldom discussed in the House and this is why I mention it. Time constraints prevent me dealing with it in depth but the book, Short Circuit, by the economist, Richard Douthwaite, deals with it in greater detail. However, it will become increasingly necessary as we move towards economic and monetary union as proposed in the Bill. We must establish more stable local economies within the unstable macroeconomic climate on which we depend at this point. If we are serious about employment, economic security and ecology — this matter relates closely to ecological principles — we must offset the risks of economic and monetary union with active encouragement for initiatives which strengthen local economies.

Mr. S. Brennan

The Bill presents an opportunity to discuss the Central Bank and its potential management of the single currency. I make no apology for using this opportunity to discuss the single currency because there has been an appalling lack of debate on this issue. I do not agree with my colleagues on this side who said recently that the matter has been debated at length. It has been debated at committees and has arisen during Question Time but, unless the Minister can point me in the right direction, I am not aware of a serious debate on the single currency in the House since the Government took office or previously. It is most irresponsible of all Members to consider crossing the rubicon of a single currency without a specific debate in the House.

I am sure party positions will harden, but this issue does not cut across party lines at this point. I am aware that members of my party, and others, have different views. I tabled a number of parliamentary questions to the Taoiseach on the matter but they were all transferred to the Minister for Finance who said Ireland passed the Maastricht Treaty and that, in effect, was the end of the discussion. He is working out the details but we are stuck with a single currency. However, I wish to challenge that view. The impression is being given that one is unpatriotic if one challenges the notion that Ireland will automatically become a full member of the single currency by virtue of the Maastricht Treaty. That is not my understanding of the position.

Ireland agreed to join the system, but we did not agree to the timing, the precise mechanisms involved or the relationship with other economies. We have some options and it is unfair to the House — the Government is not doing it deliberately; I am aware that they are all busy — to leave the impression that this is a done deal which cannot be reopened or discussed, and if we debate it that we are only tinkering at the edges. It is a fundamental issue because this sovereign Parliament is about to cross a financial and economic rubicon. There will be no going back once it is crossed and this is why I wish to make a number of points regarding the Central Bank and its management of a single currency.

The single currency proposal has not been properly debated. The decision is historic and will have far reaching consequences. It will affect the economy for many years. Ireland must join the single currency but we must do more to bring the UK on board. We must be satisfied about a number of issues before the negotiations are completed. I am glad the Minister said there are negotiations about certain matters, such as the relationship with sterling and other currencies.

The Government missed the glorious opportunity presented by Ireland's EU Presidency. I was involved in a previous Presidency and I am aware of the problems involved in being seen to abuse it. However, when a country holds the Presidency, time can be found to raise matters of national importance and it should have been used to try to bring the British on board in regard to the single currency. I was disappointed that the matter was not even on the agenda for the last meeting of the Heads of State. It will be on the agenda for the next meeting, but that is the last one during our Presidency. It is a pity it was not discussed at the October meeting because we could have tried to pull the British on board. We do not appear to be making any attempts in that regard.

We must be satisfied about a number of issues before we sign up for the single currency. An arrangement regarding a link between sterling and the new currency must be made. It is unthinkable that Ireland could be a member of a currency in the absence of a formal or legal relationship with sterling which could behave as it wishes. For example, it could become involved in competitive devaluations, which would throw Irish exporters into a panic overnight. Up to 30 per cent of our exports could be wiped out if a serious devaluation battle occurred when Ireland was involved in the single currency and Britain was outside it.

We should join economic and monetary union even if Britain does not join but, before we do so, we must insist on the UK forming a statutory link with the new currency. It could, perhaps, agree to float in a new ERM type system in a similar band to the current system of 15 per cent. There is no reason that cannot be worked out and it is a derogation of responsibility by the Cabinet not to hammer home this point at every opportunity. I am disappointed it has not been taken up more strongly because it is a critical issue. The ESRI suggested that 20,000 jobs might be lost if sterling was allowed to float freely.

I do not wish my next point to be misinterpreted, which could easily happen, but I do not favour an ECU system which is dominated by the Bundesbank and the German authorities. It is critical that the new currency is controlled by a number of EU members with strong and almost equal regulatory powers. The new currency must not be a souped-up deutschmark. If it is to be a real European currency, it must be controlled by a number of EU members with strong and almost equal regulatory powers. This is a critical point.

The banks must lay down policy, but within policy guidelines laid down by the Council of Ministers. It is unacceptable that a European central bank should be totally independent. Some economists will throw their hands up in horror at that statement but the Council of Ministers is an institution of co-operation in Europe. The broad policy parameters must come from there and not exclusively from the directors of the Bundesbank and the new directors of the Central Bank of Europe acting on its own.

Some compensatory financial arrangements must be put in place to ensure our economy is supported in the event that we become caught up in the crossfire of currency devaluations between, say, the new currency and sterling. I hope that will not be viewed as a begging bowl statement, but will be considered much more seriously. No country in these regions is as vulnerable as we are to fluctuations in sterling because proportionately we are extra dependent on the British economy. We are much more dependent proportionately on it than the French, the Germans or the Italians. It is critical that if we join and Britain does not join we have an arrangement whereby, if we do not work out a link with sterling, some compensatory arrangements will be put in place.

I wish to make a point about Northern Ireland. I would not like to be party to a Government decision that provides for the setting up of an economic border on this small island. Such a border will be set up if sterling goes one way and a new currency goes another without some formal link. In that regard I had cause recently to suggest formally a transition system which might be put to the British Government. When he was Chancellor of the Exchequer, John Major, said he did not want a single currency, he wanted a common currency. By that he meant an additional currency to run alongside the existing currencies which would be interchangeable. In other words, for a long period the punt as well as the ECU would be used here. Both would be tradeable and acceptable in shops and they could be exchanged at their exchange rate. We are handling 13 currencies and there should not be any big deal about handling a fourteenth. In time we would come to handle the new currency and rely on it. That was not accepted by John Major's Government at the time. I have had occasion to discuss it with senior economists recently and they assured me that, given that perhaps we will have one currency and Northern Ireland another, there is no reason that a common currency type regime could not be put in place if the British Government were to agree with the Irish authorities and the new Central Bank to do so. That, at least, would mean that the same currency could be used in Belfast as in Dublin. Without such an arrangement, that would not be possible. It is not possible at present, but a single currency would be a much more serious development in the long term.

I intervened to avail of the opportunity of the debate on this Bill to demand more debate on a single currency, plead for a formal link between sterling and the new currency to be worked out in advance, to ask that the new currency should not be dominated by Germany or its Bundesbank, but be a genuine new European currency, that some compensatory mechanisms should be available to Ireland if, overnight, we were caught in a devaluation crossfire without any option to help ourselves and to suggest that a common currency regime in Northern Ireland would be eminently practical and possible if it were discussed at a senior level between Prime Ministers and Departments of Finance.

Those conditions are essential before we enter the full rigours of the single currency. I reject the notion that it is a done deal. A careful study of the matter would reveal that there is plenty of scope for making those type of adjustments. If they were made, a single currency could be a wonderful experience for the economic development of this country. If we progress without those or similar conditions, we would be extremely vulnerable and will face the full rigours of a very heavy loss of exports in a very short time. We would hear speeches on the floor of the House claiming this is an export led country, an open economy and that without exports we will not survive, but suddenly we would find that we could not export because the Bundesbank would have set the rate for the ECU which we could not meet. We would not have a currency of our own to devalue and would not be able to assist our exporters. We would not be allowed to grant-aid them as that will be against the European philosophy and our only option will be to let them sink. That is not a doomsday situation. I genuinely believe that is what we are heading towards unless we put those type of conditions in place.

On a more topical point, I note that in the past few days the Central Bank has intervened to prop up the Irish pound to prevent what it claims to be inflation. That was a wrong decision by the Central Bank and a wrong conclusion. It should let the punt slide downwards. It has said that if it lets it slide downwards we will import inflation, but there is none to import. I got a note from the bank this morning which states that inflation is 1.4 per cent in Germany, 1.6 per cent in France, 1.9 per cent in Belgium, 1.8 per cent in Austria and 2 per cent in the UK. Intervening in the market and spending reserves to buy up the punt to keep it strong, as has been happening in recent days, are designed to keep down inflation and to stop us importing it. That is a silly argument because there is not any inflation to import. It would have been better to let the punt find its level, and I believe it would come down. That would be a boost to exporters. It would be a much more sensible economic strategy than the silly one in which we are engaging. The Central Bank should stop artificially hardening the punt because it has the opposite effect, that of sucking in imports and the volume of those imports not so much the inflationary aspect of them will increase.

The transition to a single currency must be managed. If we are following the path of a single currency, who is managing it? Information leaflets, glossy brochures and pictures of Ministers are all very well — no better man than me when I was in office to produce glossy brochures and pictures — but they are not enough. The transition to a full single currency must be managed and it can only be managed by the Government. There is no sign of such management being put in place. There are not any debates, discussions or plans to deal with exports, to bring Britain on board or for Northern Ireland. There is no plan other than that Brussels will send the money and because we are good Europeans we will sign up for it. That is a derogation of the Government's responsibility and I ask it to consider in a non-partisan way the statements I made. They could prove very useful if they were taken on board.

Dr. O'Hanlon

I wish to make a few brief comments and to ask the Minister of State some questions. She told us last night that this is a technical Bill. There are 70 sections in it, probably a good deal more than we would have expected.

Will the Minister comment on whether payment systems are clearly defined under section 5? Section 5 (a) refers to the processing and handling of securities. Will the Minister clarify the limits that apply?

Section 10 outlines the procedure where the bank proposes to refuse or approve of the rules of a payment system. A time limit does not appear to apply to the Minister making a decision in that regard. I presume the Minister would give a reason for such a refusal, but that is not stated in the section.

Section 17 provides that the Minister may, after consulting with the bank, prescribe fees to be paid to the bank by any person supervised or regulated by it under any enactment. The question of costs, the level of fees and whether they might be unfair to banks that are supervised by the Central Bank arises in that regard. Other financial institutions might not have to meet those costs.

In regard to section 20 Deputy McCreevy last night made a valid point about the list of powers the Central Bank will assume in terms of which are new and which existed under the Central Bank Act, 1942.

Section 21 is a technical provision to allow the Minister to transpose into Irish law the proposed EU directive on cross-Border credit transfers. That may have implications for cost competitiveness. What are the implications under the European directive for cross-Border transfers between the Six Countries and the South? Perhaps the Minister will deal with that matter.

Section 22 gives authority for the formation and acquisition of subsidiary bodies by the bank subject to the consent of the Minister. What has the Minister in mind and what acquisitions is the Central Bank likely to make?

Section 23 gives legislative effect to the present position whereby the governor of the Central Bank appears before the Select Committee on Finance and General Affairs. The governor has appeared before the committee on a number of occasions and that was a very worthwhile exercise. I compliment him on the forthright, straightforward and open way in which he has dealt with questions and on the comprehensive overview he gave in his opening statements.

I welcome the decision to supervise the bureau de change. That will be in the interests of tourists coming here and, as the Minister said last night, it will help to combat money laundering, about which we must be concerned. It is interesting that with the end of the Cold War and the reduced likelihood of physical combat in the European Union there are still serious issues that can undermine stability in the European Union or in individual nations, such as major crime and drug abuse. Obviously money laundering is a very serious element in that regard and any measure that will help combat it must be welcomed.

Section 32 requires the Central Bank to publish a list of bureaux de change once a year and to publish a notice of any revocation of an authorisation as soon as possible. Apart from publishing the register, how will the public know the bureau de change has an authorisation from the Central Bank? For example, will the bureau be obliged to display the authorisation? There does not appear to be any provision in the Bill to cater for that.

On sections 35 and 36, the first of the miscellaneous sections, Deputy McCreevy made the valid point last night that they are contrary to the policy and philosophy currently promulgated that for a variety of reasons people, particularly people in receipt of social welfare, should use cheques to a greater extent.

I wish to raise a matter with the Minister relating to "account payee" as it appears on cheques. A number of businesses made payable to the collector general for the Revenue Commissioners — a very important arm of the Department of Finance — cheques marked "account payee" and one person took out a bank draft for £3,000 payable to the collector general, but the accountant involved, who was afterwards charged with fraud, used the cheques to discharge his own liability to the Revenue Commissioners. The Revenue Commissioners however followed the original owners of the cheques and the person who paid for the draft and held them liable rather than the accountant. That may be legally in order but there is no moral justification for it. No ordinary justice would dictate that a person who pays the Revenue Commissioners by way of cheque or bank draft should be held accountable if a middle man defrauds him. The purpose of section 35 and 36 is to combat fraud and protect the citizen. Will the Minister consider the case to which I referred to ensure that an arm of the State does not penalise a person in such circumstances?

Section 50 to 54, inclusive, seek to delete provisions in Irish law which conflict with Article 104 of the Treaty of the European Union, which prohibits monetary financing of the public sector by the Central Bank. I am aware this is not the relevant Bill with which to deal with economic and monetary union but nevertheless the issue has been raised by some of my colleagues. I share the concern at the lack of public debate on this matter outside the House. The Minister and Minister of State have made every effort to initiate debate on the issue. It has been raised by way of parliamentary questions and has been debated in most meetings of the Select Committee on Finance and General Affairs. This is a major decision for us, particularly in terms of the implications in the event of the United Kingdom not joining the economic and monetary union. Deputy Brennan referred to the problems that would arise for the economy in the Border region if we joined the economic and monetary union while the UK remained outside it. There are different views on this matter. Some people believe it would cause a serious problem for the economy while others believe there would have to be stability in the UK currency, that it could not afford to let its currency fluctuate.

I am concerned at the fluctuations in the value of the Irish pound against sterling over recent years. I was particularly concerned when the Irish pound went to £1.05 sterling. Some economists were predicting that it would go as high as £1.08 by the end of the year, but it dropped to parity within two or three weeks. That fluctuation cannot be good for business. Many of our importers are dependent on imports for their raw materials and this affects them. On the other hand the food sector is a major employer, particularly in my constituency. This sector has great difficulty when the Irish pound goes too high against sterling because those in that sector work with very small margins and it is a labour intensive industry. Those issues need to be addressed and I would like to see more debate on them.

Will this Bill have any effect on the credit unions? I know the legislation for the credit unions is being prepared by another Minister's Department and there are concerns at its long gestation period. Will the enactment of this legislation have any implications for the credit unions? The many provisions in the Bill that will help to combat fraud are welcome.

What are the implications for the Central Bank in regard to costs under the new legislation and the establishment of a European Central Bank? Will it continue to employ 578 people? Will the cost of administering our Central Bank be reduced significantly? What will be devolved to our Central Bank and what will be retained by the European Central Bank? Those are the question I wish to ask.

Minister of State at the Department of Finance (Mrs. Doyle)

I thank Deputies for their contributions to this debate and I assure them that I will give all the matters raised due consideration prior to Committee Stage.

Deputy McCreevy suggested that the purpose of the Bill is to "featherbed"— his word — the jobs of officers of the Central Bank in the post-EMU period by giving additional powers to replace those he claims they are to lose. However, only the monetary policy functions of the Central Bank will transfer to the European Central Bank and responsibility for supervising financial markets will remain within the competence of individual member states. As I explained in my introduction, the Bill caters for the extension of the Central Bank's supervisory and enforcement powers in order to bring them up to date with best current practices internationally. There is no element of featherbedding in that.

Deputy McCreevy also suggested that half the provisions of the Bill have no connection with the role of the Central Bank. This is not so. It is true that amendments are being made to a number of enactments other than the Central Bank Acts of 1942, 1971 and 1989. These Acts themselves contain references to other legislation. This does not mean, however, that they do not relate to the competence of the Central Bank. Of 70 sections in the Bill, only six amend legislation which is not directly within the competence of the Central Bank. There is a big difference between six and 50 per cent of 70 which is 35. These six sections include such worthwhile provisions as the subjection of the Bank to the value for money audit functions of the Comptroller and Auditor General and the provision of protection to joint account holders in the event of flotation of a building society.

Deputy McCreevy asked if payment systems need to be regulated or supervised. The answer is yes. As I pointed out in my introduction, there is an international drive to standardise the supervision of payment and securities settlement systems with a view to reducing the systemic risk associated with settlement processes. A European Commission proposal for a directive on this issue is currently the subject of discussion at both Council and Parliament in the EU.

A number of Deputies raised queries about section 22 of the Bill which provides for the Central Bank to form or acquire subsidiary bodies subject to the consent of the Minister for Finance. Unlike most other Central Banks, the Central Bank of Ireland does not have this right at present. Section 22 is an enabling provision only and is restrictive in that the functions of any subsidiary company established or acquired under its terms will be restricted to those of the bank itself.

The kind of thing envisaged here would be subsidiaries to undertake overseas aid contracts, assisting foreign governments to establish Central Bank operations or the minting of coins. I stress that the bank has no plans to form or acquire such a subsidiary at present. The provision merely reflects a facility which other central banks enjoy and which the Government feels should be extended to the Irish Central Bank. Deputy McDowell raised an interesting point about the possibility of the application of the Comptroller and Auditor General's value for money audit to any future subsidiary of the Central Bank. I will investigate this matter prior to Committee Stage.

Section 35 and 36, relating to the conferring of legal status on cheques crossed `account payee only', were mentioned. The purpose of this amendment is to make sure that if someone writes a cheque to someone else, and it is crossed, no one can have the use of that cheque between the time it is written by the payer and is received by the payee. For example, if it is handed by the payer to an intermediary — who could be an insurance broker or a solicitor — prior to being given to the payee, if that intermediary cashes that cheque he or she, and possibly the bank which cashes it, commits an offence.

It has been suggested that this could give rise to difficulties for recipients who, having received the crossed cheques safely, have no bank accounts into which to put them. It should be noted, however, that according to the legal advice received from the Attorney General's office, the term "account payee" should not be interpreted literally. This does not mean that the recipient or payee must be the possessor of a bank account. What is being legislated for is the protection afforded to the payment as between the payer and the payee.

At present, in some cases, banks will either cash the cheque or the payee will endorse it to someone else who will pay him and subsequently cash it in the endorsee's bank. This practice can continue under the new legislation. There is no legal blockage which would prevent a bank cashing a crossed cheque or such a cheque endorsed to another. It could be asserted that in the revised circumstances banks might be less likely to do so. This is a matter for the banks and we will be discussing their likely reaction with them.

On section 64, Deputy McCreevy asked which building society requested that this protection should be afforded to deposit holders. This provision has been included at the request of the Minister for the Environment to avoid a repeat of the unfortunate instances during the flotation of the Irish Permanent whereby a number of joint account holders did not qualify for free shares following the death or marriage of another joint holder because of the order of the names on an account.

Deputy McCreevy adverted to the time it takes companies wishing to trade in the IFSC to get certification under the Finance Act, 1980. It is not necessary for a company to be in possession of a certificate under section 39B(2) of the Finance Act, 1980, in order to commence trading operations at the IFSC. This is considered an advantage in not delaying the start-up of operations. IFSC companies can commence trading at the IFSC immediately after approval to establish there has been given by the Department of Finance. It is accepted by IFSC companies that the absence of a certificate signed by the Minister does not under any circumstances delay the establishment of operations in the IFSC, nor does it place an IFSC-approved operation under any competitive disadvantage.

A number of Deputies raised the issue of economic and monetary union. I have noted these comments but as I said, this Bill does not address the legal issues arising from the move to stage three of economic and monetary union. Those issues will be the subject of another Bill which will be published closer to the relevant date for the establishment of the European system of central banks in early 1998.

Deputies' comments on the lack of debate and excited interest in the move to a single currency are valid. It is not that this House has not given enough time or that enough time will not be provided for debate, I am more concerned that those in our economy who should be clued into what is happening hear what is being said.

Mr. McCreevy

I agree.

Mrs. Doyle

There is a debate among economists and in these Houses through the Select Committee on Finance and General Affairs, the parliamentary question system and others, but is it getting to the general public? Are commercial and industrial Ireland plugged into the debate? I want to hear from them, not just from academic economists. The practitioners on the ground need to be more involved. That is where we all agree regarding concern about not being heard as this issue is being discussed. We have the opportunity to discuss this and the Whips will give all the time necessary but there is an unreal feel to the debate as if 1999 were two decades away and not just around the corner. That concern was expressed on all sides of the House.

Mr. McCreevy

The level of coverage by many newspapers of the debates in this House and the Select Committee on Finance and General Affairs were inadequate. I agree with the comments of the Minister of State and said the same in my contribution yesterday.

Mrs. Doyle

In reference to section 32, Deputy O'Hanlon said that the Central Bank will publish the list of authorised bureaux de change and notice of any revocation. There is no proposal that bureaux should be obliged to display a certificate of authorisation but, as in the case of banks, they may indicate the fact that they are authorised if they wish.

Deputy O'Hanlon was also concerned about securities and their definition. "Securities" has the normal meaning the term has in financial markets, for example where one bank agrees to give another one a certain amount of money for a set period, a condition of the second institution lodges a security to the value of the above loan with the first institution on condition that the second institution lodges a security to the value of the amount loaned with the first institution. The term "securities" is well known in financial markets. We thought the term "deposits" was as well but we have redefined them.

In section 10 I note Deputy O'Hanlon's point on a time limit to appeal to the Minister. I will reflect on this before Committee Stage. The same Deputy referred to section 17. This is a standard provision which has been in existence since 1989. In practice, the Central Bank has not charged for supervision. Neither the Bank nor the Minister wish to impose any charge which might put our market at any competitive disadvantage. I acknowledge Deputy Sargent's contribution but time ran out before he got to the Bill. I note his comments.

Deputy O'Hanlon referred to new powers in relation to section 20. As I said, the new powers are those which are specifically related to the bank's increased involvement with payment systems, for example in paragraphs (1), (m) and (n) of this section.

Deputy O'Hanlon referred to section 21 and the cross-border credit directive. The proposed directive is a consumer protection one which sets out the amount of a refund the customer will be automatically entitled to in the event of a payment not being completed to a third party in another member state. This directive was the subject of a conciliation session in the EU recently. Whatever about the merit of the directive, which is beyond doubt, what emerged from the session was the questionable merit of the system of resolving difficulties between the Parliament and the Council. We may have to revise the co-decision making process resulting from Maastricht. Many of us have severe concerns about the efficacy of the procedure in resolving difficulties or outstanding matters in relation to such legislation. In terms of competitiveness, all credit institutions in the EU will be obliged to comply with the terms of the cross-border credit directive.

I thank Members for their contributions to a long and technical Bill of over 70 sections. Only six of the sections did not directly relate to the Central Bank so it is well named as the Central Bank Bill and not, as might have been suggested, though not seriously, as collection of amendments that could have been dealt with elsewhere. Each section and point made in the Bill are relevant to the secure operation of our Central Bank system and financial institutions generally in the changes coming in the important years ahead.

Question put and agreed to.