Vol. 496 No. 6
30 Mr. Bell asked the Minister for Finance if the major Government agencies and Departments will be willing and able to do business and provide services in euros from 4 January 1999; and if he will make a statement on the matter. [23721/98]
The second edition of the national changeover plan which I published last January, sets out what the public sector will do to facilitate the changeover to the euro. The plan states that staff, pension and social welfare payments will continue in Irish pounds until 1 January 2002, but that from the commencement of EMU next February, the public sector will accept payment in euros where it is offered and where a supplier presents an invoice in euros, payment will usually be made in euros.
Departments are responsible for ensuring that they, and bodies under their aegis, will be ready to meet their commitments. All Departments are concerned that this will be the case. The plan also contains specific entries about the plans for the start of EMU in my Department, the Central Bank, the National Treasury Management Agency and the Revenue Commissioners.
From the start of EMU all budgetary, financial and economic publications from my Department will provide summary information in euros and the accounts of the Exchequer and the Paymaster General with the Central Bank will be in euros. Central Bank operations in the Irish wholesale money and foreign exchange markets will be denominated in euros. The Revenue Commissioners will accept payment of any tax in euros and Irish pounds. They will also accept returns and declarations in euros from companies and for self-assessed income tax, subject in the case of some tax heads to an irrevocable election to adopt the euro as the reporting currency for that tax head. Details of the Revenue Commissioners' plans can be found in Revenue and the Euro Changeover — A Business Guide, published earlier this year.
New issues of Irish Government bonds, bills and notes which would otherwise have been denominated in Irish pounds or other currencies being replaced by the euro, will be denominated in euros. Outstanding Government bonds, bills and notes which were issued in, and are to be redeemed in, Irish pounds will be redenominated in euros. Details of the technical arrangements for the redenomination are set out in an information booklet published by the NTMA last June. I recently signed an order under section 23 of the Economic and Monetary Union Act, 1998, in relation to the redenomination.
Payments into the Government's personal savings scheme, operated by An Post as agent for the NTMA, will be accepted in euros and Irish pounds. Withdrawals from such schemes, except those from demand deposit accounts at post office counters, may be made in euros or Irish pounds. The bodies involved have confirmed that they will be ready to meet their commitments under the plan. I will launch the third edition of the national changeover plan tomorrow. This edition will not affect the commitments set out above. As with previous editions, a copy of the third edition will be sent to all Members of the Oireachtas.
The presumption seems to be that big business and large Government agencies may choose to do business in euros, but ordinary consumers will not. It might be regarded as perverse if they were to choose to do so. What will happen if an ordinary taxpayer, consumer or small business person doing business with a Department presents a cheque made out in euros? Are Departments and agencies which deal directly with the public geared to deal with individual customers in euros?
Every Department will be able to accept payments in euros. This applies to cashless transactions. No one can ask for euro notes or coins, even in banks, as they will not be available until 1 January 2002. However, people can make tax and other payments in euros. Departments, agencies and their suppliers will be given the option of accepting payments in euros. Suppliers who wish to be paid in euros will have to open a euro bank account. That will be the position from 1 January 1999 until 1 January 2002. From that date euro notes and coins will be in circulation and Irish notes and coins will be withdrawn in the following six months. By 30 June 2002 at the latest, people will be dealing in euro notes and coins.
It only recently came to my notice that it will not be open to anyone to write a cheque in euros if they so wish. Chequebooks are configured in euros or Irish pounds. I cannot use an Irish pounds chequebook to write a cheque in euros. People will need to be told this.
That is a good point and I am sure the financial institutions will bring that to the attention of their customers. Any business dealing with other member states of the euro will open a euro account and be given euro chequebooks.
Is the Minister aware of concerns in the tourism industry, especially among the major operators, about the euro and especially about transacting business on the European mainland? Will he indicate what preparatory work the Department is doing to prepare that industry for the changeover?
One sector in which I expect there to be considerable competitive advantage is the tourism sector. From 1 January next year, people from member states joining EMU and who intend to holiday in Ireland will at least know that the rate of exchange will be set and will not change after that date. The same will apply to Irish people planning to holiday in Spain, Portugal, Germany and other member states within EMU. That should, if anything, be a boost to tourism because the exchange rate risk will be removed after 1 January.
What about Great Britain? One third of our tourists come from there.
Ireland broke its link with sterling in 1979. Since then Irish operators in the tourism and other sectors which do business with the UK have had to contend with a fluctuating exchange rate with sterling. That will continue until, if ever, the United Kingdom decides to join EMU. In some years, Irish people going to the UK will have the advantage while in others, visitors from the UK will have the advantage. However, we have lived with that for the past 20 years.
