Written Answers. - Economic and Monetary Union.
Seán Haughey
Question:
254
Mr. Haughey
asked the
Minister for Finance
when the decision was taken by the Government to join the euro; the manner in which this decision was taken; if a referendum on joining was considered; the issues taken into account in making the decision to join; and if he will make a statement on the matter.
[28607/01]
The formation of economic and monetary union, EMU, including the establishment of the euro, are the culmination of a process of preparation which has been going on since the signing in 1992 of the Treaty of the European Union, the Maastricht Treaty. The Delors Committee report of 1989, together with the European Commission report "One Market, One Money" of 1990, laid the foundations for the provisions on EMU that are set out in the Maastricht Treaty. Among other provisions, the Maastricht Treaty provided, in essence, that member states which fulfilled the necessary conditions and which did not have an opt-out were to participate in EMU.
The treaty received widespread support in Ireland and the leaders of the four main political parties issued a joint statement urging a "yes" vote in the referendum on it held in June 1992. The treaty was endorsed by a substantial majority; just under 70% of those who voted were in favour of it. Essentially, therefore, it was the people of Ireland who made the decision to join the euro, by way of referendum.
The goal of qualifying for EMU membership has been a consistent element of the policy of successive Governments. The previous Government commissioned the Economic and Social Research Institute, ESRI, to conduct an independent study of the likely economic implications of EMU for Ireland, with particular reference to employment, in the context of various membership scenarios. Essentially the findings of the ESRI report were that, on balance, membership of EMU would be economically advantageous for Ireland.
In May 1998, the heads of state or government of the EU member states decided that 11 member states, including Ireland, qualified to form economic and monetary union, EMU, and to adopt the single currency, the euro, from 1 January 1999. On 6 May 1998, the Taoiseach, Deputy Ahern, stated that membership of the euro was in Ireland's long-term strategic interests.
In the lead-up to the EU leaders' decision, the Houses of the Oireachtas discussed Ireland's prospective participation in EMU on a number of occasions. In particular, I appeared before a joint meeting of the Oireachtas Joint Committees on Finance and the Public Service, and on Enterprise and Small Business, on 4 February 1998.
As the Deputy will be aware, the Oireachtas has passed a significant body of legislation which was required for Ireland's participation in EMU. In particular, in February-March 1998, the Central Bank Act, 1998, was debated and passed by both Houses of the Oireachtas. This Act was designed to bring the legislation governing the Central Bank of Ireland into conformity with the relevant provisions of the Maastricht Treaty and of the Statute of the European System of Central Banks and of the European Central Bank set out in Protocol No. 3 to that Treaty. Following publication in March 1998 of the convergence reports from the EMI, the European Commission and the Central Bank of Ireland, and the European Commission's recommendation, the Government introduced motions on Ireland's prospective participation in EMU in Dáil Éireann on 1 April and in Seanad Éireann on 7 April 1998. Both Houses noted the recommendation from the Commission that Ireland fulfilled the necessary conditions for the adoption of the single currency. In introducing the debate in the Dáil, I stated that the reason I had put down this motion was to provide Dáil Éireann with the opportunity to discuss Ireland's prospective participation in economic and monetary union at the outset on 1 January 1999. I also stated that the people of Ireland decided by referendum in 1992 that we should participate in EMU if we qualified and the Government resolved to give effect to that decision. The Oireachtas also passed the Finance Act, 1998, which provided,inter alia, for the taxation changes required for the introduction of the euro on 1 January 1999, and the Economic and Monetary Union Act, 1998, which declared that by virtue of Council Regulation (EC) No. 974/98, from 1 January 1999 the currency of the State is the euro and the Irish pound is a subdivision of it.
Since 1 January 1999 the euro has been usable in cashless form, cheque, direct debit, credit transfers. On 1 January next, euro notes and coins will be introduced into circulation and the withdrawal of Irish pound notes and coins will begin.
