Amendment No. 1 is consequential on amendment No. 3; amendment No. 4 is an alternative to amendment No. 3 and amendment No. 2 is related. Amendments Nos. 1 to 4, inclusive, can be discussed together. Is that agreed? Agreed.
Economic and Monetary Union Bill, 1998: Report and Final Stages.
I move amendment No. 1:
In page 6, line 6, to delete "section 1(2) or 15" and substitute "section 1(2), 9 or 15".
On Committee Stage, Deputy Noonan put down three amendments similar to amendment No. 2 which I was unable to accept on that Stage. The Deputy agreed to withdraw the amendments if I agreed to examine whether section 9 could be amended to take on board the point made by the Deputy. I agreed to so do and I advised the committee that any such change would require a consequential amendment to section 4.
Section 9 provides that the Minister may, by order, set a date before 30 June 2002 for the withdrawal of legal tender status from Irish pound notes and coins. Given the importance of such an order, the Deputy asked that I consider an amendment which would require a positive resolution of the Oireachtas in relation to it. After considering the matter, I put down amendments Nos. 1 and 3 to take on board the point made by the Deputy. Amendment No. 3 provides that any order under section 9 must be laid in draft before each House of the Oireachtas and that the order shall not be made until a resolution approving the draft has been passed by each House. In other words, a positive resolution of both Houses of the Oireachtas will be required before an order can be made to set a date earlier than 30 June 2002 for the withdrawal of legal tender status from Irish pound notes and coins. I accept that it is proper that both Houses of the Oireachtas should have the opportunity to debate the withdrawal date and to approve a draft order containing it before the order is made.
I am advised that the drafting formulation used in amendment No. 3 in my name is normal in such circumstances. It differs from the wording proposed by Deputy Noonan in amendment No. 4 but I am sure he will agree that it meets his point of requiring the positive approval of each House. If amendment No. 3 is agreed, it will be necessary to amend section 4 in consequence. Amendment No. 1 proposes, therefore, to replace "section 1(2) or 15" in section 4 with a reference to "section 1(2), 9 or 15". This is because section 9, as amended, will provide for the laying before the Oireachtas of orders made under it.
On Committee Stage yesterday a number of points were raised arising from amendments tabled by Deputy Noonan and I promised to return to them today. There is no obligation on banks to accept coins other than the general legal tender obligation relating to coins. This Bill does not create such an obligation. The Central Bank and the banks recognise, however, that the changeover to the euro is an unprecedented event. Decimalisation in 1971 affected only a limited number of coins. It did not affect notes. I understand a fee was not paid by the Central Bank to the banks for the removal of coins. Such a fee is not envisaged for the euro changeover.
The changeover to the euro will involve a full replacement of all notes and coins. It will also involve major questions of packaging, storage and distribution on which the Central Bank is engaged in active discussions with the banks. Everyone involved is conscious of the points made yesterday and I am confident that a smooth and orderly system of getting euro notes and coins out to the public and Irish pound notes and coins out of circulation as quickly as possible will be achieved.
The changeover to euro notes and coins will not start until 1 January 2002. The logistics have not yet been sorted out. In that context I note the point raised about sterling coins circulating in Ireland. The Central Bank is also aware of this point but it is too early to say what is to be done about it.
As regards the calling in of coins, section 15 extends the existing calling in power of the Minister for Finance to cover coins issued under this Bill and euro coins issued by other participating member states. In recent times 10p and 5p coins were called in and replaced by new versions. This did not give rise to extra bank charges.
Deputy Fleming asked about the phrase in section 10 about 50 coins denominated in euro or in cent. This does not mean that only 50 one cent coins can be tendered in a single transaction. There will be eight values of euro coins: one, two, five, ten, 20 and 50 cent and one and two euro. When euro coins come into circulation no one other than the Central Bank and anyone designated by order will be obliged to accept more than 50 in a single transaction.
Deputy Fleming asked at what point in the present coinage and in the euro coinage metal cost exceeds face value. Metal prices can fluctuate but I am informed that at current metal prices face value exceeds metal cost in all cases.
I wish to deal with one other point about the laying of orders before the Oireachtas raised by Deputy Noonan. Section 15 provides that an order calling in coins must give at least six months notice after the date of making before it comes into operation. Deputy Noonan argued that the notice period should start from the date the order is laid before the Oireachtas. It is my intention and that of my Department to ensure that any such order is laid before the House without delay. As they relate to the calling in of coins, such orders are of substantial interest to the Oireachtas. They are also of interest to the general public and it is important that uncertainty should not attach to them. By its nature, the date on which the order is made is a known and certain date but the date of laying the order before the Houses of the Oireachtas is not. This has the potential to cause uncertainty. I am not in a position, therefore, to accept the Deputy's suggestion.
I thank the Minister for meeting fairly most of the points raised yesterday on Committee Stage. If he decides to withdraw Irish notes and coins from circulation on any date prior to the last day of June 2002, such an order will be circulated to Members and require positive affirmation by the Houses of the Oireachtas before it becomes law. I welcome this change. May I take it that this is being confined to section 9 and is not being extended to the normal power to make regulations and orders under other sections?
Correct.
I do not want to subvert the distinction between primary and secondary legislation as it is proper that a Minister should be able to do certain things by way of regulation and order but matters of magnitude should be subject to positive affirmation, if not dealt with in primary legislation. I agree with the Minister that his amendment is more in keeping with normal drafting practice as followed in other Bills.
The Minister availed of the opportunity to deal with other matters raised yesterday but has not seen fit to table amendments. He has given a strong commitment that an order to withdraw coinage will be laid before the Houses of the Oireachtas without delay. This is stronger than "as soon as may be" but the point is valid. If policy-makers have decided that it would be proper to give the public six months notice, this should not be reduced because of technicalities in the making of orders. If an order were made by the Minister but not promulgated until several weeks or months later, that would be unsatisfactory.
I disagree with the Minister on his explanation of how the Central Bank, the clearing banks and other financial houses will deal with the withdrawal of coinage and notes and the putting into circulation of the euro, establishing it not only as the legal tender but also as the currency of commerce and trade. At the level of first principles, this is a republic governed by law, not by lawyers, politicians, bankers or central bankers. The currency with which we have been familiar since the foundation of the State is to be withdrawn and replaced by a new currency in one of the great economic decisions of the 20th century, not only in Ireland but also in Europe. This decision must be underpinned by law.
The right of a person to take any quantity they like of coins or notes denominated in Irish currency into a bank and exchange it for the euro must be enshrined in law. To rely on procedure and practice, the goodwill of the banking system and the efficiency of the Central Bank is not the way to proceed. The child with a piggy bank, the political activist with the church gate collection and the small shopkeeper with coinage have a legal right to exchange it for the euro. Without legal rights, relying on grace and favour procedures in the banking system, there is always a danger that charges will be imposed. The bank will oblige people but they will charge a small commission. If one brings in a bag of coins, one is already charged commission. However, the magnitude of this issue is such that it should be underpinned in law on every occasion.
The Minister informed the House of the detailed arrangements which will be made. I am delighted the Central Bank is firmly in control of the changes that will be made, and will be involved in the necessary discussions to ensure that the withdrawal and distribution of the alternative currency will be planned carefully. However, there is a point to be met in ensuring that the citizen has a legal right to exchange any quantity of coins.
On Deputy Noonan's point about the timescale, the most recent calling in orders related to the shilling, 5p, two shilling and 10p coins. The order for the shilling and 5p coins was made on 28 April 1992 and laid before the Houses of the Oireachtas on 29 April 1992. The order regarding the two shilling and 10p coins was made on 16 September 1993 and laid before the Houses of the Oireachtas on 21 September 1993.
The Deputy made a strong point about covering this area in legislation. I considered the matter further after the Committee Stage debate yesterday, but I have concluded it is not necessary to insert a provision in that regard. There are three and a half years between now and 1 January 2002 and there is plenty of time to work out these matters. A compulsion was not placed on the banks in the past. Instead it was left to the Central Bank and the banks to reach agreement.
There are ongoing negotiations on all these areas between the Central Bank and the financial institutions. If a satisfactory outcome on the matter raised by the Deputy about banks not taking in coins from individuals is not reached between now and 1 January 2002, I will have no hesitation in introducing amending legislation. It is not necessary to include a provision on this occasion. I am satisfied that agreement will be reached by the Central Bank and the banks on this matter and there is no need for compulsion.
Amendment agreed to.
Amendment No. 2 not moved.
I move amendment No. 3:
In page 7, between lines 31 and 32, to insert the following:
"(3) Where it is proposed to make an order under this section, including any order amending or revoking an order to which subsection (1) relates, a draft of the order shall be laid before each House of the Oireachtas and the order shall not be made until a resolution approving of the draft has been passed by each such House.".
Amendment agreed to.
Amendment No. 4 not moved.
I move amendment No. 5:
In page 15, line 19, to delete "£250" and substitute "£1,000".
This is a repeat of an amendment I tabled on Committee Stage which did not find favour with the Minister. When a resolution is passed by an extraordinary general meeting of a company in respect of the renominalisation of shares, there is a requirement for copies of the resolution to be filed with the Registrar of Companies. If there is a failure to file, the penalty is a maximum fine of £250 on summary conviction. I argued on Committee Stage that a maximum fine of £250 on a company is a derisory amount.
If requirements are to be placed on companies to file documents with the Registrar of Companies, we must show that the intention is serious by having penalties which are connected to the real world. The section makes provision for a maximum fine of £250. However, the practice in the District Court on summary conviction is usually not to apply the maximum fine. The level of fine is at the discretion of the District Court judge up to the amount of £250. In practice, the maximum is rarely imposed. Therefore, under the section, the fine will not necessarily be £250, rather an amount up to that limit.
The Houses of the Oireachtas traditionally have been good law making fora. However, while the Republic is excellent at making laws, it is bad at enforcing them. There are plenty of examples where we consider that the job has been done once legislation is enacted. However, the level of enforcement is not great. Ireland is a nation of talkers. A need is satisfied once a matter has been debated. The pubs are full of people like that; they debate issues forever. Similarly, the pubs of Dublin are full of men who plan to write books, but it never happens.
If we are serious about the implementation of laws, the penalties should be realistic. It is unrealistic to decide that a procedure must be followed by a company but if it does not follow it, it will be fined a maximum of £250, which I consider derisory. It does not make sense. At a general level, it brings our work into disrepute. If the matter is serious enough to require it to be done under pain of penalty, it is important. Consequently, the penalty should at least give discretion to the District Court judge to impose a reasonable amount. At least then it would be a slap on the wrist for the company and not a matter which is treated with derision. The penalty on the company will be that it must pay lawyers rather than having to pay the fine if it is prosecuted in the District Court under this section.
My amendment suggests £1,000 as a maximum fine, which is also a modest amount. The Select Committee on Finance and the Public Service will debate the Investor Compensation Bill today. The Minister is aware the penalties under that legislation are much more severe, although the consequences of the implementation of the provisions if a company failed to comply would be more onerous on investors. It is not a straight comparison but the Investor Compensation Bill contains significant penalties. A maximum fine of £250 under this Bill is not significant.
I support the amendment. I understand the fine proposed in the Bill will be low and a fine of £1,000 would be a standard amount for many of the offences covered by company law.
I will express a concern I did not have an opportunity to mention yesterday because I had a prior engagement regarding the denomination of fines in criminal law in IR£. Is the Minister satisfied that the regulations will be sufficient to redenominate fines in criminal law in the euro? Will it be necessary to introduce amendments to specific laws?
The Deputy's point is that criminal law lists fines in IR£ and his query is whether there is a need to amend legislation to take account of the change to the euro. I am advised that it is covered in European law, but we will return for further details if the Deputy wishes.
I am satisfied that it is fine.
I have reflected on this amendment since Committee Stage and Deputy Noonan will recall I explained that the fine not exceeding £250 arises in circumstances where the company fails to send a copy of the resolution passed by the company to renominalise the share capital to the Companies Registration Office for recording. Furthermore, this section and the previous two sections are designed to facilitate companies in the changeover to the euro; in effect, these are dedicated provisions dealing with redenomination and redenominalisation compared with existing company law provisions. For a company to achieve the equivalent end result using existing procedures would be considerably more complicated. For example, where renominalisation would involve a decrease in share capital, it would involve court approval.
Accordingly, we are putting a simplified procedure in place to facilitate companies on the introduction of the euro. In companies legislation, two provisions are particularly relevant in the context of the present amendment. Section 143 of the Companies Act, 1963, provides for the forwarding of resolutions passed by companies in various circumstances to the Companies Registration Office. Where a company fails to comply with this section, a person who is in default is liable to a fine not exceeding £250. More specifically, section 68 of the same Act deals with the power of a company to alter share capital by members in general meeting. Again, copies of the resolution making such a change must be notified to the Companies Registration Office under section 69 and a person in default is liable to a fine not exceeding £250. This fine is a revised amount introduced by the Companies (Amendment) Act, 1982. In the circumstances I am satisfied that the fine of £250 is the correct amount and I cannot accept the amendment.
Redenominalisation is at the lower end of seriousness of charges that could be brought under the Companies Act. It is a long time since I looked at the Companies Act, which is a mammoth document with a large range of penalties, but the Minister for Enterprise, Trade and Employment is carrying out a major review of company law and I am sure these matters will be reviewed. I do not want to increase the fine to a figure not to exceed £1,000 and then to have someone point out that the fine for a more serious breach of company law is a lot less. That is not the proper procedure and for this and other reasons I have decided to leave the fine at £250.
I accept Deputy Noonan's point on bringing the law into disrepute. We pass laws but do not implement them or allocate enough staff to enforce them. Old Acts with low fines bring the law into disrepute, but I do not think it appropriate to amend company law on a piecemeal basis. For those reasons I cannot accept this amendment.
I support the Minister but I also understand Deputy Noonan's point. Rather than looking at this in a piecemeal basis, we should do as the Minister says and look at the range of fines in company law. I predict that under current arrangements we will find that, five years after the introduction of the euro, thousands of Irish companies will not have notified the Companies Registration Office of their formal resolutions, yet none will be brought to court or fined £250.
If there is a date by which a company must fulfil its obligations under the Companies Act that the company fails to do so, interest and penalties should accrue and the matter should then be forwarded to the Revenue Commissioners. It could then become part of the fine imposed in the company's tax settlement. Going to court for £250 would clog up the courts and be a waste of time and money.
We are either serious about these fines or we are not, and even if they are small there must be a simple way to collect them. Perhaps they should be collected automatically by the Revenue Commissioners when they are overdue. We should not look at this fine in isolation because there is a broader issue here.
Has it struck the Minister that as we deal with the last piece of legislation to bring in the euro——
Hopefully.
——and deal with a section allowing Irish companies to denominate their shares in euros rather than pounds, we are imposing penalties in Irish pounds, which is ironic?
That had struck me but it is the way it must be.
The Minister should inform us whether, across the whole corpus of law where there are penalties, the Government plans to denominate all penalties in law in euros. If so, will there be discretion for rounding those penalties up or down just as there is for companies which denominate their shares into euros? It seems anachronistic that our laws are littered with penalties expressed in pounds; every time a district judge imposes a fine the clerk will have to get a calculator to turn it into euros using the exchange rate. That will be great fun. Nobody has referred to this, but it will have to be done. The facilities afforded to private enterprises will have to be extended to fines also. There will have to be a mechanism to round fines off so that £250 is not translated into a peculiar combination of euros and cents which does not appear sensible as a maximum fine. If that is so, I presume one piece of enabling legislation will be brought in to trigger everything to round sums off to the nearest euro.
The Minister should consider a fines indexation Bill. It seems that fines are always out of date, often appearing to be out of date by the time the law is implemented. In times of high inflation they go out of date very quickly, and a fines indexation Bill would be simple enough legislation, though the Department of Justice has traditional reasons of principle for not proceeding in this way. It holds that each Act and penalty has its own validity and that having common criteria for raising fines is not in accordance with best judicial or law reform practice. However, even if there were objections to applying an index to criminal law an index could be applied to company law. The Minister should discuss with the Tánaiste the possibility of taking note of the increase in inflation since fines were upgraded in 1982, increasing the fines and denominating them in euros.
I know why the Minister is not accepting my amendment. It has nothing to do with the invalidity of my argument. It is because it arises from the 1982 revision in company law. The Minister is afraid that if it goes up to £1,000 it will be out of kilter with other penalties in the legislation. It is the internal inconsistency that makes the Minister's advisers reluctant to change rather than any flaw in my argument. If the Minister refuses to make change on a piecemeal basis for good and valid reasons, he will never make change.
This makes apparent another problem in the way we legislate. The departmentalisation of the process causes difficulties. The Tánaiste's office, being responsible for company law, should upgrade fines right across the board. Then we would not have this difficulty. The precedent for the Minister's Bill comes from company law and the fine is £250, so the Minister feels he has no discretion because it would stick out like a sore thumb in the corpus of company law if a requirement to file in one instance was associated with a penalty of £1,000 and a requirement to file documents elsewhere was associated with a penalty of £250. The matter should be seriously addressed. A fines indexation Bill of some sort which applied right across the board would have favourable consequences for the Revenue, and the courts would have more discretion in the imposition of fines.
European law and the European Law directive, Council Regulation 974/98 Article 14, states that where a legal instrument is existing at the end of the transitional period, reference is made to the national currency units; these references shall be read as references to the euro unit according to the respective conversion rates; and the ground rules laid down in regulation No. 1103/97 shall apply.
The conversion rates will have to be rounded up or down.
The legal base is covered by this regulation, but in relation to the Deputy's other point, there could be very unusual fines as a result of the conversion. It may be necessary for individual Ministers to bring piecemeal legislation before the House and avail of the opportunity of standardising fines to round euro amounts. As of now the legal base is there and it will happen automatically.
The Deputy also made a case for a fines indexation Bill. That could be considered in the future but it is not something for me to consider at this time. I see some merit in what the Deputy says, but a fines indexation Bill would lead to unusual amounts. Some other mechanism would have to be found to round the figures. The subject can be considered at another time.
Deputy Seán Fleming also raised questions about fines. Not all companies renominalise their share capital. Also this provision ceases to have effect 18 months from 1 January 2002, which means it will cease to have effect on 30 June 2003. I agree with the Deputy that all fines should be kept under review, and I am sure the Minister for Enterprise, Trade and Employment will bear that in mind.
The courts have always taken the view, for right and understandable reasons, that criminal law should be strictly construed, and that if we want to amend it we have to go through the process in the Dáil and the Seanad. I assume the Minister's advisers in the Department have taken the advice of the Attorney General on this. I am not convinced we can change criminal law by a simple application of the regulation. I would like to be reassured by the Minister that that is the case.
The regulation gives the legal basis for it. I do not profess to have any particular expertise in the criminal law. I am just pointing out the effect of Regulation 974/98 Article 14. It will automatically convert the amount from Irish pounds to euro.
If the Road Traffic Acts provide for a fine of £100 can we, simply by application of this regulation, read that now to mean 130 euro, or do we explicitly have to amend the Road Traffic Acts?
I am advised that we can. Amendment put and declared lost.
I move amendment No. 6:
In page 16, lines 39 and 40, to delete "designs, dimensions, weights and metal or metals and composition," and substitute "technical specifications, dimensions, composition and design or designs".
Deputy Noonan raised in Committee the difference in drafting between sections 11 and 30.
I explained that the difference arises because section 11 reflected the wording of the treaty in relation to coins intended for circulation across the euro area, while section 30 reflected previous Irish law on commemorative coins.
However, I agreed with the Deputy that it was desirable to have consistency in drafting within the Bill in so far as possible, and I undertook to see whether I could accept the Deputy's suggestion that the wording of section 30 be aligned with that of section 11. I have now considered the question, and I have joined the Deputy in proposing this amendment.
I am not too sure whether I am correct, but I think this is the first occasion where an amendment was tabled jointly by a Minister and the Opposition spokesperson. Perhaps we have created history. I agreed with this amendment and added my name to it. It is Deputy Noonan's amendment.
I thank the Minister for making the point I made yesterday in Committee. When I saw the amendments which were circulated this morning a shiver ran up my spine and the hair stood on the back of my neck because I know the Minister's long-held view that the grand coalition of 1919 should be re-established. I asked myself whether this was the start of the campaign.
I and the late John Kelly were the original proposers of the idea.
Amendment agreed to.
Question proposed: "That the Bill do now pass."
I congratulate the Minister on bringing this legislation successfully through the House. It is the last serious Bill which will be brought through in preparation for the euro. It is important to reflect on a point which Deputy Pat Rabbitte raised in Committee and which, because of the rules of Committee, could not be adequately dealt with. That is the issue of inflation, the possibility of asymmetric shocks in the future and how an Irish administration would be empowered in dealing with such shocks. The Minister should reflect on this and give us an opportunity at a future date to reflect further. I do not want to pursue the inflation argument at the moment, but it is important to note that what is happening in Europe from 1 January next is not unique. There have been currency unions before. There were five in the 19th century. Two succeeded admirably and three failed miserably. Those that succeeded were driven by a strong political agenda. Those that failed were simply put in place because of some perceived advantages in terms of trade and commerce and eventually disappeared.
People in Ireland would be familiar with the circumstances in regard to those that succeeded. I recall at one period that if students doing history in the leaving certificate did not get a question on the unification of Germany they got one on the unification of Italy. If they studied both they were sure of passing one question. Both of these unifications were preceded by monetary union and because the political momentum was so strong towards a united Germany and a united Italy monetary union succeeded and knitted into a political union. If there is any pulling back in Europe from further integration and from a progressive move towards political union, over one or two generations, what we are doing now will fall apart.
I hope the discussions in Cardiff were simply an aberration arising from the fact that there will be a general election in Germany in September because it seems that all the bogus talk about subsidiarity is at attempt to reintroduce an argument that was dealt with 15 years ago. Reintroducing it now seems to be an attempt to diminish the powers of the Commission and of the centre and move back towards greater control by the governments of member states. That argument is in the past. The perceived reluctance of those who have been the net payers to Europe since the Treaty of Rome to continue to be net payers will have adverse effects.
We have to consider what we can do as an Irish Parliament if things go seriously wrong. What mechanisms will be left open to us? Monetary and interest rate policy is gone. We may get heavy-handed advice on fiscal policy but it is not easy to cut public expenditure or renege on obligations to the social partners and to the citizenry at large to give tax relief. Much of the economic advice comes from people who, in the refined world of academia, can afford to speculate along these lines but in the real world their collective advice does not amount to anything a practical man could use.
The most successful monetary union is the United States which has automatic stabilisers built into its system between the federal and the state governments. If the grape harvest fails in California and it appears that the Californian GDP will be reduced, there are automatic arrangements between the federal and state budgets which immediately kick into place. The contribution from the state is lessened and, in certain circumstances, the transfer from the centre is increased.
The European budget is 1.27 per cent of GNP and it simply is not big enough to have any transfer of funds engineered by the Commission to member states who are in trouble. The stability pact which is in place puts the onus firmly on the member states to fund themselves.
I do not intend to delay the House much further but I would like the Minister to consider, with his advisers and excellent civil servants, putting together a portfolio of policies which could be implemented if things go wrong domestically. They could also consider the possibility of putting in place other levers which, in general terms, will be of a fiscal nature. We cannot throw our hands up in the air and say there is nothing we can do. A combination of the provisions of the stability pact, together with specific fiscal measures, should be considered for the future so that if something happens we will not be totally exposed on the European stage. I realise the Chair becomes agitated when he hears long contributions on Fifth Stage but I would like the Minister to reflect on what I have said.
I will respond briefly to the points raised by Deputy Noonan. Even though he merely touched on this matter, he raised some fundamental questions about the way Europe will develop. He pointedly referred to the deliberations at the Cardiff Summit. There seems to be a major divergence in regard to what happens at European Council and ECOFIN meetings, what some of the larger states want vis-a -vis the smaller states and what they want for themselves. On the one hand, they want the Commission to take immediate and punitive action regarding the states with which they do not agree while looking for more subsidiarity on the other.
From my experience of attending ECOFIN and European Council meetings I am aware of a growing frustration on the part of many member states with the increasing number of rules and restrictions emanating from the European Commission. That may affect the thinking of some member states but they do not follow the logic of their arguments because they say they want more subsidiarity at home but demand more regulations to affect matters that legitimately come within the remit of individual member states.
Another point made by Deputy Noonan is of major significance and that is the prognostications from the net payers to the Community. I agree with the Deputy that some of the papers have taken up this issue over the past year and put forward the view that it may have something to do with forthcoming elections in certain countries. That must be taken into account in some of the thinking but after many months of attending ECOFIN Council meetings I have concluded — I made my views known to my officials — that this is no longer a put-on game. Many of the bureaucrats and civil servants throughout Europe appeared to give the impression that this was an optics exercise, so to speak, for the people back home, but this is a real game and more and more people have come around to my view in that regard. At nearly every second meeting a point is made about this and there is enormous pressure from some of the bigger contributors to get back some of their money.
I do not want to pre-empt what might happen in that particular regard but we cannot allow a situation to develop whereby the principle is established that one must get back exactly what one puts in. The principle behind the European ideal would no longer exist if that were the case. If everybody in Ireland said they wanted to get back the equivalent amount of money they paid in taxation, the country would be unable to operate.
There will be further debate about the net contributions of some member states but we cannot allow a situation to develop where, pound for pound, we must get back what we put in. If that principle had been applied in the early 1970s we would not have been allowed to join. I expect that within the next decade Ireland will become a net contributor, and rightly so. I have got into difficulty for expressing some of these views but I believe that when a market or business in a town grows, everybody benefits. The net contributions to Ireland have been substantial but other European states have benefited from Ireland's prosperity by way of developments here.
In many instances there is ambiguity from Europe. On one hand it holds us up as the great example of what can be done if funds are utilised effectively, which embodies the European ideal. The impression is given that Ireland, which was at a certain stage of development 25 years ago, is today an example to the rest of Europe and the world. On the other hand, increasingly envious eyes are cast on Ireland by other member states. There is a contradiction there and the logic behind the position of some people, including many Europeans, is not followed through.
Deputy Noonan asked what policy tools would be available, and we discussed this matter on many occasions, including yesterday. In the rundown to EMU a strict line has been taken as to what will be available. We want to ensure monetary union will operate under a strict regime and that the new currency will have great credibility throughout the world. I am certain that in three or four years as we move forward, items will be considered which are not under consideration now because we are engaged in trying to ensure monetary union gets off to a sound and stable start. I am sure there will be many opportunities in future to debate this matter, but all we can do at this stage is wish it success. We have done our homework and this should be the last Bill to be brought before the House on this matter before economic and monetary union commences on 1 January. We will be involved in a great new experiment from that date.
I thank all Deputies for their contributions on Committee and Report Stages and for allowing the Bill to go through the House so quickly.
This is an historic occasion because the House is signing off our currency, a currency which has been in use for only about 25 years. Like virtually everybody in the House, I believe that monetary union is as much a political as an economic project. In a sense it also has the potential to threaten the political unity of Europe and we should not lose track of that. Monetary union is already used as an excuse by individual Governments to justify action they had to take in their own countries, in most cases action which they would have to take anyway. There is always a great danger that, in a matter which is bureaucratic and involves regulation and intervention of the kind with which people are not always comfortable, it will be remote from the ordinary citizenry and from individual legislators in particular countries. We cannot allow monetary union to be scapegoated. Reflecting on the Amsterdam Treaty, the deliberate effort made to bring Europe closer to the citizenry has not worked. Perhaps as the provisions of the Amsterdam Treaty operate in coming years, things will change, but I would not be too hopeful about that.
On the stability and growth pact, we should be very careful about being clear that this is not written in stone. The stability and growth agreement is no more than a political agreement that will have to be reviewed in two or three years' time, if not sooner. In recent months the Bundesbank and Germany have been anxious to formulate monetary union in the way they want. We do not have much choice about that, but we must keep an eye on the stability and growth pact. We must insist, for example, that it serves the needs of a country such as Ireland which, unlike other countries which are developed to a greater degree, needs to spend money on infrastructure and to invest. We should keep an eye on that ball because it will have to be considered in the future. I join others in marking this historic day.
Question put and agreed to.