Edward Nealon
Ceist:27 Mr. Nealon asked the Minister for Finance if Ireland is in a position to join a European single currency if Britain and Northern Ireland remain outside.
Written Answers. - Single Currency.
Phil Hogan
Ceist:32 Mr. Hogan asked the Minister for Finance if Ireland is in a position to join a European single currency if Britain and Northern Ireland remain outside.
P. J. Sheehan
Ceist:36 Mr. Sheehan asked the Minister for Finance if Ireland is in a position to join a European single currency if Britain and Northern Ireland remain outside.
Patrick D. Harte
Ceist:38 Mr. Harte asked the Minister for Finance if Ireland is in a position to join a European single currency if Britain and Northern Ireland remain outside.
Liam Burke
Ceist:55 Mr. L. Burke asked the Minister for Finance if Ireland is in a position to join a European single currency if Britain and Northern Ireland remain outside.
Godfrey Timmins
Ceist:66 Mr. Timmins asked the Minister for Finance if Ireland is in a position to join a European single currency if Britain and Northern Ireland remain outside.
John Bruton
Ceist:119 Mr. J. Bruton asked the Minister for Finance if Ireland is in a position to join a European single currency if Britain and Northern Ireland remain outside.
I propose to take Questions Nos. 27, 32, 36, 38, 55, 66 and 119 together.
I believe that Ireland will be in a position to participate in Economic and Monetary Union (EMU), including the introduction of a single currency, even if Britain and Northern Ireland remain outside.
The Deputies are aware that, under the provisions of the Treaty on European Union, the third stage of European Monetary Union will coincide with the irrevocable fixing of exchange rates. Under the timetable set out in the Treaty, the third stage will begin no earlier than 1 January 1997. If by the end of 1997 the date for the beginning of the third stage has not been set, the third stage will begin on 1 January 1999. At the start of the third stage, the Council will adopt the measures necessary to introduce the ECU as a single currency of the member states participating in the Union.
It is the Government's objective to proceed to European Monetary Union as quickly as possible following ratification of the Treaty. We intend that Ireland will be among the first group of countries participating in European Monetary Union and we will continue to pursue vigorously our strategy to achieve the convergence necessary to enable us to take part in it.
EMU offers many advantages. To begin with, it will be based on closer co-ordination of member states' economic policies, which should make them more beneficial for growth and employment than policies pursued by member states in isolation. Secondly, the low-inflation environment promoted by European Monetary Union will provide a sound basis for sustainable economic growth and also for lower interest rates. Thirdly, the introduction of a single currency will eliminate both the cost of currency transactions and exchange rate risk for our trade with participating States.
It is true that the advantages of European Monetary Union will be even greater if the United Kingdom participates in it. However, I would point out that Ireland's trade with the UK, as a proportion of our total trade, has fallen significantly since our entry into the EC. This process is likely to continue over the coming years, while our trade with the rest of the EC is likely to grow as the process of closer integration intensifies. The UK itself is also likely to become more closely integrated with the EC over coming years. In addition, it should be borne in mind that Ireland participated in the narrow band of the Exchange Rate Mechanism of the European Monetary System from its inception in 1979, despite the fact that the UK remained outside until 1990: this demonstrated our ability to pursue a policy of closer integration with the European Community without the UK. Finally, of course, the non-participation of the UK in European Monetary Union would not mean its withdrawal from membership of the EC, or that Ireland could no longer trade with the UK and the UK with Ireland: in European Monetary Union or not, the UK would remain an important market for Ireland. Ireland would, however, be enjoying the advantages of European Monetary Union set out above which would not be available to the UK if it remained outside European Monetary Union.
In the final analysis, however, the fundamental question is whether we in Ireland view our future as lying with the European Community or as lying with the UK. The Government is firmly convinced that our future lies with the Community; that the Community's future lies in closer integration; and that Ireland should participate fully in that process, with or without the UK. Our policies will continue to be directed to this objective.