Written Answers. - Economic and Monetary Union.
Proinsias De Rossa
Question:
89
Proinsias De Rossa
asked the
Minister for Finance
the current position regarding preparations for EMU; if his attention has been drawn to recent research suggesting that many small firms were ill-prepared for EMU; and if he will make a statement on the matter.
[1868/98]
Michael P. Kitt
Question:
97
Mr. M. Kitt
asked the
Minister for Finance
the preparations to date in 1998 for the changeover to the euro; the timetable involved; if he and his Department will undertake other initiatives in connection with the changeover; and if he will make a statement on the matter.
[1806/98]
I propose to take Questions Nos. 89 and 97 together.
My Department's preparations for the move to stage three of EMU are in accordance with the timetable set out in the Maastrict Treaty, which is as follows. The Council of Economic and Finance Ministers, ECOFIN, will assess whether each member state fulfils the necessary conditions for the adoption of a single currency, on the basis of a recommendation from the European Commission and convergence reports from the Commission and the European Monetary Institute (EMI), the forerunner of the European Central Bank. ECOFIN will recommend its findings to the European Council, that is the Heads of State or Government of the EU member states, who will, after consulting the European Parliament, confirm which member states fulfil the conditions for adopting the euro.
The EMI and Commission reports and the Commission recommendation will be published on 25 March 1998. The European Parliament will be consulted following their publication. ECOFIN will meet to make its assessment on 1 May 1998, with Parliament's formal opinion on 2 May, and the final decision by the European Council on the afternoon of 2 May.
As regards national preparations for EMU, clearly the first requirement is that Ireland meet the convergence criteria laid down in the Treaty for membeship of EMU, and the Deputies will be aware that Ireland does in fact meet them.
On the legislative front, I recently published the Central Bank Bill, 1997, which is designed to provide for the compatibility of Ireland's Central Bank legislation with the requirements in the Maastricht Treaty for independence of national Central Banks and for national legislation, including Central Bank statutes, to be compatible with the treaty and the Statute of the European System of Central Banks. It is also intended to have enacted, by summer 1998, legislation to provide for other changes in national law made necessary by the introduction of the euro and work on that legislation is proceeding at present.
As regards practical preparations, my Department has responsibility for co-ordinating the preparations of the Irish public administration and has a key role in helping the rest of the economy to prepare itself for the changeover.
On 14 January I published the second edition of EMU and the euro: Ireland's National Changeover Plan. The plan is based on the assumption that EMU will begin on time and that Ireland will be a member of it from the outset. It also outlines the timetable for the changeover to the euro. Briefly, on 1 January 1999, EMU will begin and the euro will come into being as the currency of the participating member states. It will be useable for cashless transactions (eg cheques and credit transfers) from that date. However, euro notes and coins will not be available for a further three years, so Irish pound notes and coins will continue in use and all banking facilities currently available in Irish pounds will continue to be available: in other words, individuals will be able to operate in Irish pounds as they do at present. On 1 January 2002, euro notes and coins will be put into circulation and by 1 July 2002 at the latest (probably a good deal earlier), Irish pound notes and coins will cease to be legal tender and the changeover to the euro will be complete.
The plan sets out the changeover arrangements that will be made by the public sector (including, specifically, the Central Bank, the National Treasury Management Agency, the Revenue Commissioners, the Department of Social, Community and Family Affairs and my own Department), the banks and building societies and the Irish Stock Exchange. It also outlines the initiatives which have been put in place by my Department in connection with the changeover. Briefly, these are as follows:
— in 1995 a Single Currency Officers Team (SCOT) was set up: this includes a representative from each Government Department and its remit is to co-ordinate preparations for the changeover to the euro in the public sector;
— in 1996, the Euro Changeover Group was set up: this includes representatives from ICTU, IBEC and a wide range of private sector bodies and its remit is to help co-ordinate the changeover across the economy;
— in 1997 the Euro Changeover Team in my Department was set up, to carry out my Department's tasks in relation to the changeover in the public administration and in the rest of the economy;
— in 1996 the Forfás EMU Business Awareness Campaign was established, to provide businesses with the information they need to prepare themselves for the changeover.
An appendix to the plan outlines the changeover work being done by various public and private sector bodies and lists contact points for further information.
A copy of the plan was circulated to all Members of the Oireachtas and further copies are available from my Department and from Forfás, including on the Internet.
As regards further initiatives in 1998, the plan makes it clear that the focus of the information programme on the changeover will be broadened to include information for the general public; and that, assuming that the European Council confirms in May that Ireland fulfils the necessary conditions for the adoption of the euro, a Currency Changeover Board will be established in order to oversee the detailed implementation of the changeover, including the areas of public and consumer information.
As regards the research referred to by Deputy De Rossa, I understand that what is in question is a survey undertaken in the period October to early December 1997 by a representative body in conjunction with a financial institution, the results of which were published in mid-January. The survey indicated a low level of actual preparation for the changeover among the 356 companies surveyed, though clearly the vast majority were aware of the advent of the euro. I should point out that since the survey was taken, the Forfás EMU Business Awareness Campaign, which had by that time already circulated some 25,000 copies of its information pack for businesses, has produced a leaflet specially for small and mediumsized enterprises and circulated over 50,000 copies of it, including to members of the representative body involved in the survey. In addition, the Forfás campaign has also produced a summary leaflet which has been circulated in conjunction with the Revenue Commissioners to all VAT-registered companies: in all, over 140,000 copies of the summary leaflet have been circulated.
