Written Answers. - British EMU Policy.
Ruairí Quinn
Question:
64
Mr. Quinn
asked the
Minister for Finance
the discussions if any, he has had with the British Prime Minister, Mr. Tony Blair, regarding the composition of Euro-X; if he has been asked to support British membership of that body; the Government's view on British membership in this regard; and if he will make a statement on the matter.
[22047/97]
Michael Noonan
Question:
67
Mr. Noonan
asked the
Minister for Finance
the bilateral discussions, if any, he has held with the United Kingdom's Chancellor of the Exchequer on British policy on EMU; and if he will make a statement on the matter.
[1903/98]
I propose to take Questions Nos. 64 and 67 together.
As the Deputy is aware, the United Kingdom has an opt-out from the provisions on EMU, under a Protocol attached to the Maastricht Treaty. Ireland chose not to have such an opt-out. Under the terms of the Protocol, the UK has notified the Council of Ministers that it does not intend to move to the third stage of EMU on 1 January 1999. Consequently, the United Kingdom is under no obligation to move to the third stage. The UK may, however, reverse its notification at any time after the beginning of that stage.
The policy of the United Kingdom on EMU is a matter for the British Government. While a decision by the UK to enter EMU would have positive aspects for the Irish economy, it is a matter for the UK Government to exercise, as they wish, the discretion they are afforded by the treaty. More generally, the processes of enhanced economic co-ordination in the third stage will provide an opportunity for discussions at ECOFIN on aspects of British policy questions impinging on the euro area.
My priority remains ensuring that Ireland qualifies for EMU and will take part in the third stage from the beginning. When the Maastricht Treaty received the endorsement of the Irish people, this was given without qualification or any provision for Ireland to opt out from the provisions for economic and monetary union. Membership of EMU, irrespective of what the UK does, will on balance be of benefit for Ireland — an assessment borne out in studies by both the Economic and Social Research Institute and the National Economic and Social Council.
As regards economic co-ordination, the Amsterdam European Council in June 1997 invited the ECOFIN Council of Ministers and the European Commission to examine and report on certain aspects of the implementation of Economic and Monetary Union, including how to improve the process of economic co-ordination in the third stage of EMU; organisation of the Council's dialogue with the European Central Bank; and implementation of Article 109 of the treaty.
The Luxembourg European Council in December last received the report of ECOFIN and adopted a resolution incorporating the main elements of the report, setting out principles and arrangements for strengthened economic co-ordination among states sharing the single currency and between those states and other states not yet in a position to participate in the euro. The ECOFIN Council is and will be at the centre of economic co-ordination.
Ministers of the states participating in the euro area may meet informally among themselves to discuss issues connected with their shared specific responsibilities for the single currency; the Commission, and the ECB when appropriate, will be invited to take part in the meetings. Whenever matters of common interest are concerned, they will be discussed by Ministers of all member states.
Decisions will in all cases be taken by ECOFIN, which includes all member states of the EU, in accordance with the procedures determined by the treaty.
The draft report, including the question of meetings of Ministers of those member states participating in the euro area, was the subject of discussion and consideration by my colleagues and I in the ECOFIN Council, including Mr. Gordon Brown, the UK Chancellor of the Exchequer. It was subsequently discussed at the European Council, among the Heads of State or Government, including the Taoiseach and the Prime Minister of the United Kingdom, Mr. Tony Blair.
The position of the UK is that of a non-participating member state. However, the UK Government has also stated that, in principle, membership of a successful single currency would be beneficial for Britain and Europe. In that context, the UK will be included with all the other member states in the co-ordination of economic policies — although they may not be involved in informal discussions of issues connected with the shared specific responsibilities of participating member states for the single currency. Moreover, I am confident that the UK will play a positive role in relation to the third stage of EMU, including the arrangements for economic co-ordination, given their statement that it is in the UK national interest for the single currency to work.
It is acknowledged by all concerned that EMU will link the economies of the euro-area member states more closely together. To the extent that national economic policies will have an impact on inflation prospects and monetary conditions in the euro-area, the single currency will require closer co-ordination of economic policies among euro-area member states. However, economic and monetary interdependence with member states which are not participating in the single currency will also be strong — they all participate in the single market. The need to ensure further convergence and the smooth functioning of the single market therefore requires all member states to be included in the co-ordination of economic policies.
I am satisfied that the European Council Resolution on this and the related issues of economic policy in the third stage of EMU strikes the right balance between, on the one hand, the special needs for co-ordination among the euro-area member states and, on the other, the common interests of all member states — without undermining the treaty in any way.
