Written Answers. - Economic and Monetary Union.

Tuesday, 4 February 1997

Dáil Éireann Debate
Vol. 474 No. 3

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  86.  Cecilia Keaveney  Information on Cecilia Keaveney  Zoom on Cecilia Keaveney   asked the Minister for Finance  Information on Ruairí Quinn  Zoom on Ruairí Quinn   the steps, if any, being taken in the Border areas to prepare for economic and monetary union in view of the direct impact it will have not only on business but also for those working on a cross-Border basis; the implications, if any, for that area should the United Kingdom not enter EMU; and if he will make a statement on the matter. [3104/97]

Minister for Finance (Mr. Quinn): Information on Ruairí Quinn  Zoom on Ruairí Quinn  The ESRI report on the economic implications for Ireland of economic and monetary union, which I commissioned last year, is a comprehensive analysis of the impact of economic and monetary union on the Irish economy. The report examined the implications for Ireland of a number of membership scenarios, including the situation where Ireland joined economic and monetary union but the UK, at least initially, did not do so. The consultants concluded that, on balance, membership of EMU, even were the UK not to join, would be beneficial for Ireland. The detailed sectoral analysis in the ESRI report of the impact of EMU on the tourism, retailing, agriculture, manufacturing industry and financial services sectors should be of considerable interest to all those preparing for EMU, both in Border areas and elsewhere.

As regards preparations, I should point out that preparedness for EMU, as for other changes in the economic environment, is primarily the task of businesses and individuals themselves to ensure. I take it, therefore, that the Deputy has in mind the measures being taken by the State to facilitate businesses and individuals in doing so.

The first requirement here is the provision, as far as possible, of a sound and stable economic environment conducive to sustainable economic and employment growth. The present economic climate in Ireland is characterised by high economic and employment growth, low inflation, sound public finances, interest rates close to historically low levels and a high level of investment, notably under the community support framework. My recent budget was designed to improve this climate further, in particular by providing tax and social insurance reductions aimed at securing continuing wage moderation and by improving our corporation tax structure.

At a more specific level, in December I launched a national information programme on [554] EMU and the changeover to the single currency, with the Ministers for Enterprise and Employment and Tourism and Trade. The programme will be in phases, designed to correspond with the phases of the changeover and to provide information in a timely way: as the Deputy will be aware, EMU will begin on 1 January 1999, when the single currency, the euro, will come into being, but euro notes and coins will not be introduced until 1 January 2002 at the latest, with the changeover to the euro being completed within six months of their introduction.

The first phase of the programme will run to the end of this year and will focus mainly on provision of information to help businesses prepare themselves for the changerover. Forfás is running a business awareness campaign to this end. The business awareness campaign is directed through business associations, professional bodies, and State agencies that deal directly with enterprises: these are represented on a consultative committee for the campaign.

Forfás has also engaged consultants to study how businesses, especially small and medium-size enterprises, should best plan for EMU and the changeover to the euro. Their study is expected to be completed in March and following that, Forfás expects to hold a series of information meetings in 1997, at which it would present the results of the study.

The national information programme will be reviewed in the second half of 1997 when the question of broadening its focus will be considered.

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