EMU and the Euro:
the Second Edition of Ireland's National Changeover
Ireland recently published the second edition of its National
Plan for the changeover to the single currency, the euro. The first edition
of the Plan was published in May 1997. Like its predecessor, the second
edition has been approved by the Irish Government and is based on the assumption
that Economic and Monetary Union (EMU) will start on 1 January 1999 and
that Ireland will be a member of it from the outset.
The first edition of the Plan outlined the changeover
arrangements that will be made by Government Departments, the Central Bank
of Ireland. the National Treasury Management Agency and the Revenue Commissioners
(tax authorities), as well as by banks and building societies and the Irish
Stock Exchange, and promised that the Plan would be extended to include
other parts of the public sector, including State-sponsored bodies, local
authorities and health boards. The second edition fulfils this promise,
as well as developing as appropriate the arrangements set out by bodies
covered by the first edition. The second edition also includes an Appendix
which describes the changeover work being done by various public bodies
and trade and professional associations in Ireland and lists contact points
The designs for euro notes and coins, including the design
for the Irish face of euro coins, are also shown.
Briefly. on 1 January I999, EMU will begin and the euro
will come into being as the currency of the participating member States.
It will be useable for cashless transactions (e.g. cheques and credit transfers)
from that date. However, euro notes and coins will not be available for
a further three years, so Irish pound notes and coins will continue in
use and all banking facilities currently available in Irish pounds will
continue to be available: in other words, individuals will be able to operate
in Irish pounds as they do at present. On 1 January 2002, euro notes and
coins will be put into circulation and by 1 July 2002 at the latest (probably
a good deal earlier), Irish pound notes and coins will cease to be legal
tender and the changeover to the euro will be complete.
THE KEY POINTS OF THE PLAN ARE THAT FROM IRELAND'S
ENTRY INTO EMU:
The public sector will accept payment in euro as well as
in Irish pounds.
Public sector internal financial and accounting systems will
continue in Irish pounds and staff, pension and social welfare payments
will continue in Irish pounds.
In general, the public sector will also continue to make
other payments in Irish pounds. However, where a supplier presents an invoice
in euro, payment will usually be made in euro.
All budgetary, financial and economic publications from the
Irish Department of Finance, e.g. the Budget, Estimates, Economic Review
and Outlook, Accounts and Exchequer returns, will provide summary information
Central Bank of Ireland operations in the Irish wholesale
money and foreign exchange markets will be denominated in euro.
The tax authorities will accept payment of any tax in euro
as well as in Irish pounds. They will also accept returns and declarations
in euro from companies and for self-assessed (ie self-employed) income
tax (subject in the case of some taxes to an irrevocable election to adopt
the euro as the reporting currency for that tax).
New issues of Irish Government bonds, bills and notes which
would otherwise have been denominated in Irish pounds or other currencies
which are being replaced by the euro will be denominated in euro.
All outstanding Irish Government bonds, bills and notes which
were issued in and are to be redeemed in Irish pounds will be redenominated
Companies may file their accounts with the Companies Registration
Office in euro.
Tenders for public contracts may be submitted in euro.
Bills from the large public utilities will continue to be
in Irish pounds. Payment will of course be accepted in euro as well as
in Irish pounds
Any banking service required in euro will be available in
Banks and building societies will process lodgements and
payments expressed in either Irish pounds or euro regardless of which of
these the customer account is denominated in and will credit them to the
customer's account in whichever of the two currencies the account is held
in. Customers will be encouraged to use electronic means in making or receiving
euro payments, but euro cheques and credit transfers will also be available.
Charges for domestic transactions in euro will be the same as charges for
similar domestic Irish pound transactions.
In general, banks and building societies, where requested,
will provide current loan and savings accounts denominated in euro. Service
charges for such accounts will be the same as for similar Irish pound accounts.
At the request of customers, banks and building societies
will convert existing current loan and savings accounts denominated in
Irish pounds or other participating currencies into euro on a once-off
basis free of charge.
The participants in the Dublin interbank market will discontinue
the provision of reference rates for the calculation of DIBOR and will
adopt EURIBOR (the proposed reference rate for the euro area) as the standard
for the Dublin market.
Irish equities which had been traded and settled in Irish
pounds will be traded and settled on the Irish Stock Exchange in euro only.
Assuming that the European Council confirms in 1998 that
Ireland fulfils the necessary conditions for entering EMU, a Currency Changeover
Board will be established under the aegis of the Department of Finance
after the European Council's decision in order to oversee the detailed
implementation of the changeover, including the areas of public and consumer
FROM THE INTRODUCTION OF EURO NOTES AND COINS IN IRELAND
The public sector will make and accept payment in euro.
All banking services hitherto in Irish pounds and other participating
currencies will be in euro. Existing accounts denominated in Irish pounds
and other participating currencies will be converted to the euro at the
appropriate fixed conversion rates free of charge.
In launching the second edition of the National Changeover
Plan, Ireland's Minister for Finance, Mr Charlie McCreevy TD, thanked all
the various bodies involved in drawing it up and said that publication
of the second edition showed the extent of the practical work being done
across the economy, both in the private and the public sectors, to prepare
for the changeover to the euro. Publication of the second edition will
encourage economic agents to intensify their preparations so that Ireland
will have a smooth and orderly transition to the euro.
The second edition of the National Changeover Plan is
available on the Internet on the Department of Finance page on <http://www.irlgov.ie/finance>
and on the website of Ireland's EMU Business Awareness Campaign on <http://www.emuaware.forfas.ie>