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Dáil Éireann debate -
Tuesday, 26 Nov 1996

Vol. 472 No. 1

Written Answers. - Report of European Monetary Institute.

Michael McDowell

Question:

109 Mr. M. McDowell asked the Minister for Finance if his attention has been drawn to the report of the European Monetary Institute relating to inconsistencies between statutory provisions relating to the Central Bank and the European Treaty; his views in relation to the right of service directors to participate in board meetings, the obligation of the Governor to consult him and the attendance of the Governor at meetings of the Dáil committee; and if he will make a statement regarding his intentions in relation to these matters. [22468/96]

I assume the Deputy is referring to the European Monetary Institute (EMI) report entitled Progress Towards Convergence, released earlier this month. This report is the first to be produced in accordance with Article 109j(1) of the Treaty on European Union. That Article obliges the Commission and the EMI to report to the Council by end-1996 on the progress made in the fulfilment by member states of their obligations regarding the achievement of Economic and Monetary Union (EMU), including their obligation as regards compatibility of national Central Bank legislation.

Article 108 of the Treaty requires each member state to ensure that Central Bank legislation be compatible with the Treaty by, at least, the establishment of the European System of Central Banks (ESCB). As the European Council has confirmed that stage 3 of economic and monetary union will commence on 1 January 1999, such establishment will take place in 1998. The EMI report refers to the need for a second report to be produced under Article 109j in early 1998. It has, therefore, been decided to wait for the present and to legislate for economic and monetary union in a single Bill. As the Deputy is aware, the Central Bank Bill, 1996, which is at present before the House, contains a limited number of economic and monetary union-related provisions but these are only designed to ensure compatibility with certain defined provisions of the Treaty on European Union which took effect with the start of the second stage of economic and monetary union on 1 January 1994. Extensive preparatory work on other economic and monetary union-related legislation has, however, already been done.
The EMI has been consulted on this approach, including the preparatory work done, and has expressed agreement. The Deputy will have noted from page 29 of the EMI report that the EMI noted that the Central Bank Bill, 1996 is "...a step towards fulfilling the Treaty and Statute requirements for Stage Three and that further adaptations are under consideration.". Consideration is being given at present to the issues raised in the EMI report now available with a view to the drafting of the future Economic and Monetary Union Bill and account will obviously have to be taken of any further recommendations which the EMI may make in this regard.
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