asked the Minister for Finance if he will detail precisely the existing arrangements governing payments between this country and other European countries which are members of the European Payments Union, and referred to in the reservation to the Government's approval of the agreement for the establishment of the payments union, and the advantages in such existing arrangements which, in his view, justify the opinion expressed by him in Dáil Éireann on 9th November, that these existing arrangements are preferable to any alternative methods for settling payments with European countries.
Ceisteanna—Questions. Oral Answers. - European Payments Union.
Payments in respect of transactions approved under the Exchange Control Orders may be made to other European countries which are members of the European Payments Union, either.
(1) in Irish currency to the account in a bank in Ireland of a resident of the country concerned; or
(2) in sterling to the account in a bank in Great Britain of a resident of the country concerned; or
(3) in the currency of the country concerned if payments to that country may be so made under existing regulations.
Payments in respect of exports from Ireland to other European countries which are members of the European Payments Union may be accepted
(a) in Irish currency from the account in a bank in Ireland of a resident of the country concerned; or
(b) in sterling from the account in a bank in Great Britain of a resident of the country concerned; or
(c) in the currency of the country concerned provided that it is a currency which has been declared by Order to be subject to the provisions of Article 4 of the Exchange Control Order, 1947.
The acceptance of payment in any other form requires a special exemption under the Exchange Control Orders.
Irish banks' requirements of foreign currencies are met from customers' receipts sold to the banks and, to the extent to which those receipts are inadequate, by purchases from the banks' London agents. Receipts, apart from currency notes held to supply travellers with their requirements, are credited to the accounts of the Irish banks in the foreign countries concerned, and any sum in excess of their current requirements is sold through their London agents to the Bank of England.
Ireland, on balance, incurs deficits in her transactions with all the Continental European members of the European Payments Union. Payments in sterling as at (2) above are the principal means by which these balances are settled so far as this country is concerned. For the purpose of the periodic settlement with the European Payments Union, account is taken of the balances of the sterling area as a whole arising out of current transactions with the monetary areas of other members of the European Payments Union.
The existing arrangements for the settlement of payments with Continental European members of the European Payments Union are convenient and satisfactory and there is, therefore, no occasion for incurring the initial technical difficulties and dislocation which would be entailed by the establishment of an alternative system. Moreover, any such alternative would, like the present arrangements, have to be consistent with the basic fact that, because of the nature of the Irish balance of payments, deficits with European countries have to be settled ultimately in sterling, this being the only international medium of exchange of which we have an adequate supply.
asked the Minister for Finance if he will state whether, in view of the fact that the surplus arising from Irish trade with European countries who are members of the European Payments Union, accrues, under the provisions of the agreement approved by the Government, to the benefit of Great Britain as representative of the sterling area, any assurance has been sought or obtained from the British Government that the whole or any part of such surplus will be convertible, at the discretion of the Irish Government, into gold or dollars to meet the requirements of our trade with the dollar area after Marshall Plan loans have ceased.
As Ireland incurs a deficit in her transactions with the monetary areas of all members of the European Payments Union, other than the sterling area, no benefit can accrue to Great Britain as a result of Ireland's participation in the union as a member of the sterling area. The second part of the question does not, therefore, arise.