The Minister for Finance will resume his speech in reply to the Second Stage.
Order of Business. - Euro Changeover (Amounts) Bill, 2001: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
I will begin by thanking Deputies for their support for the Bill and for their contributions to the debate on Second Stage. I will try to deal with as many of the points raised as I can.
Briefly, the aim of the Bill is to provide, where necessary, for the replacement of Irish pound amounts in law with convenient amounts in euro to apply from 1 January 2002. Taken together with other similar measures, such as those in the Finance and Social Welfare Acts, the Bill should broadly complete what might be called the euro price list for the more common transactions between the citizen and the State. Amounts that are not dealt with by the various pieces of national legislation will of course be converted to euro, at the conversion rate, by the relevant EU regulation.
Deputies Mitchell and McDowell referred to concerns that the changeover might affect prices. As I mentioned previously, the consumer aspects of the changeover are being addressed by the Minister with responsibility for consumer affairs and the Director of Consumer Affairs. They relaunched the national code of practice on the euro changeover last December, along with an action plan for consumer protection. A key aspect of the code is that subscribers to the code commit themselves to carry out the changeover fairly and to seek no advantage from the conversion.
The Director of Consumer Affairs has sent the national code to more than 200 organisations, inviting them and their members to subscribe to that code or to draw up a suitable sectoral code for approval under the national code. Any approved code would have to contain the same commitment about carrying out the changeover fairly. Retailers who have signed up to the code or to an approved sectoral code will be entitled to display a euro logo, and the Director of Consumer Affairs will be advising consumers to shop where they see that logo. In addition, of course, before the euro comes in, consumers will have had ample opportunity to inform themselves on the changeover and to build up a scale of values in euro. Dual display of prices is already fairly visible in the Irish economy.
I note Deputy McDowell's suggestion that euro amounts should perhaps take the lead in some cases, though of course Ireland is unique in the euro area in that here, prices in euro look bigger than prices in national currency. I expect dual display here to increase over the coming months, and especially from 1 October 2001, the date by which subscribers to the national and sectoral codes are committed to introducing it.
The take-up of services in euro, which are already available, for example, from banks and from the Revenue Commissioners, should also be increasing. Deputies McDowell and Fleming referred to ATMs. I understand that about 80% of ATMs will change over on 1 January 2002, and the remainder will follow within a few days. Initially they will issue predominantly 10 and 20 euro notes, so as to help put low-denomination notes into circulation from the start. Deputy Mitchell suggested that we have a three month changeover period. I am afraid I could not accept this suggestion. All the euro member states are committed to a changeover period of two months or less. The period we have chosen strikes a fair balance between giving people time to adapt to the new money and getting the changeover completed in a reasonably speedy way.
The changeover will be carried out by financial institutions converting accounts to euro on 1 January 2002; from then on, cash going outwards will be in euro, while Irish cash coming inwards will be retained. An important part of this process is that while retailers will continue to accept Irish cash up to 9 February, they will charge only in euro and will give change only in euro.
To do this, retailers will have to get euro cash from banks in advance of 1 January 2002, and will have to lodge the Irish cash they receive inwards during the dual circulation period. It is to facilitate this process that it has been agreed to meet part – and only part – of the income that banks would otherwise obtain from retailers through cash handling charges on euro cash provided before 1 January, and on Irish cash lodged during the dual circulation period. In return, banks will waive those charges for retailers. Banks will of course be meeting their own costs in the changeover.
Deputy Mitchell asked if section 5 of the Bill would impact on the value of shares for credit union members. Section 5 redefines a share in a credit union as 1, in place of £1. The value of each individual's shareholding – that is, the amount of money in his or her account – will be converted to euro at the conversion rate. The answer to the Deputy's question is that the value of a person's shareholding will not be affected by the redefinition of a share.
Deputy Mitchell also asked what would happen about elderly people, in particular, who have Irish cash on hands after 9 February 2002. Financial institutions will continue to provide cash exchange as set out in the cash changeover plan, and to accept Irish cash in customer lodgements, for a time after 9 February. The Central Bank will give value indefinitely for Irish notes and coins. However, I am sure the Deputy would join me in urging people, and elderly people in particular, not to keep large quantities of cash on hands at any time.
Deputy McDowell expressed concern about the level of preparedness and general awareness of the changeover both as regards businesses and the public. While I would not accept his view of how we compare with other euro member states, I do agree with him that companies need to accelerate their preparations considerably from now on, and that public information efforts will need to be intensified in the run-up to 1 January.
A number of important initiatives will be launched on the public awareness front in the autumn. The European Central Bank will unveil the security features of the euro notes at the end of August, and they and the appearance of the notes will be widely advertised from then on. The Euro Changeover Board will increase its advertising campaign substantially from September onwards and will also distribute a booklet on the changeover to every household. Extensive dual display of prices will begin from 1 October. Starter packs of euro coins will be put on sale, mainly at post offices, from 17 December. There will be lots of activity aimed at making sure everyone is ready for the changeover when it begins on 1 January 2002.
Deputy McDowell asked about the changeover to euro operation by the Revenue Commissioners and the Department of Social, Community and Family Affairs. I can report that since 1 January 1999, Revenue has offered its business customers the facility to conduct their revenue affairs either in Irish pounds or in euro during the transitional period. Revenue have put together a comprehensive changeover plan across all their operations and they are confident they will be fully ready for the changeover to the euro on 1 January 2002.
Work is also well in hand in the Department of Social, Community and Family Affairs. Cus tomers receiving payments by order books will have books spanning the changeover period well in advance of the change. Customers receiving their payments by cheque, by direct credit to bank etc. accounts or on presenting their social services card at their local post office, will be paid in euro on their first pay day in 2002.
The Deputy mentioned the budget day report. He may be confusing issues arising from the euro changeover with other issues that have to do with the alignment of the tax and calendar years from 1 January next. Arising from the decision on the latter, the Government decided that from next year, social welfare increases will also take effect from 1 January. The next budget on 5 December 2001 will provide for these increases. For logistical reasons, however, they will not be paid on time in all cases, though in any case where there is delay all arrears due will be paid in February effective from 1 January. This has nothing to do with the euro changeover, the delay in implementing the budget changes is solely due to timing considerations. Given the choice between April implementation on time, and January implementation with some delay, the Government chose the latter. I believe our choice was correct.
Preparations for the changeover to the euro are already extensive and they are gathering pace. A great deal of work has already been done in the legislative field, and this Bill marks a further step in those preparations. Although a technical Bill, it incorporates an important principle – that the changeover should favour the citizen where convenience demands that there must be a departure from mutual conversion. The Bill is a further demonstration of the Government's commitment to making timely preparations for the changeover and in that sense it sets a good example for the rest of the economy.
I thank Deputies for their contributions.
Question put and agreed to.