Dáil Éireann debate -
Wednesday, 8 Oct 1997

Vol. 481 No. 2

Written Answers. - Economic and Monetary Union.

Michael Finucane

Question:

14 Mr. Finucane asked the Minister for Finance if he has had or intends having any discussion with his United Kingdom counterpart on whether the United Kingdom intends participating in economic and monetary union; and if he will make a statement on the matter. [15686/97]

Brian O'Shea

Question:

51 Mr. O'Shea asked the Minister for Finance if his attention has been drawn to an informed article (details supplied) in the Financial Times in relation to the United Kingdom Government decision in principle to join Sterling with economic and monetary union at some stage after 1999; and if he will make a statement on the matter. [15718/97]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 14 and 51 together.

The decision on who will participate in the third stage of economic and monetary union will be made next year, in accordance with the procedures laid down in Article 109j of the Maastricht Treaty. The Council of Ministers, ECOFIN, will assess whether each member state fulfils the necessary conditions for the adoption of a single currency, on the basis of convergence reports from the European Commission and the European Monetary Institute. On the basis of these reports, ECOFIN, acting by a qualified majority on a recommendation from the Commission will recommend its findings to the Council, meeting in the composition of the Heads of State or Government, who will, after receiving the opinion of the European Parliament, confirm which member states fulfil the conditions.

The United Kingdom has an opt-out from the provisions on economic and monetary union, under a Protocol attached to the Maastricht Treaty. Under the terms of the Protocol, the UK shall notify the Council whether it intends to move to the third stage before the Council makes the assessment to which I have referred. Unless the UK notifies the Council that it intends to move to the third stage, it shall be under no obligation to do so. If the United Kingdom does not move to the third stage, it may change its notification at any time after the beginning of that stage.

The question as to whether the UK wishes to enter the third stage of economic and monetary union is a matter for the British Government. The UK Government has not yet said whether it will exercise this opt-out and has never said that it will never join. It has only said that it will decide closer to the starting date of 1 January 1999.

Of course, I regularly meet my colleagues, including the Chancellor of the Exchequer, at the ECOFIN Council, as well as at other international fora. I take the opportunity of such contacts to keep myself informed of their thinking on a range of issues and of developments in their countries. However, the decision on participation is firstly a matter for the UK themselves and I would not expect to be told of their intentions before they had made their own decision in this matter.

I am aware of the press report to which the Deputy refers; however, it would not be appropriate for me to comment on press speculation. As I understand the position, the British Government approach is fundamentally unchanged at this time — they have kept open the option of joining at the start of the third stage and will decide on whether or not they wish to enter economic and monetary union closer to the time. Their position, as set out in the Labour Party election manifesto, is that the single currency is a major step of economic integration, which in principle could bring benefits, and they will make their decision "on the basis of the economic merits of the case, when the arguments for Britain are clear". If they take the view that the UK should join the single currency in the life time of the current Westminster parliament, I understand that there is to be a referendum before the final decision is made.

While I would, of course, welcome a decision by the UK Governemnt to enter economic and monetary union from the outset, my priority remains ensuring that Ireland qualifies for economic and monetary union and will take part in the third stage from the beginning. When the Maastricht Treaty received the endorsement of the Irish people, it did so without qualification or any provision for Ireland to opt out from the provisions for economic and monetary union. Membership of economic and monetary union, irrespective of what the UK does, will on balance be of benefit for Ireland, according to both the Economic and Social Research Institute and the National Economic and Social Council. I believe the economic and monetary union will start on time and that Ireland will play its full part from the start.