It all comes down to the price of a pint

IT'S midJuly 2001 and the euro notes and coins have just come into circulation. The pound is still with us - but only until early next year, 2002 - and everything in the shops is priced in both euros and pounds. Many items have four or more price tags, as prices per unit, in both pounds and euros, must also be displayed.

We have got used to the idea of the single currency over the past 3 1/2 years. After all, the euro has been the official national currency since January 1st, 1999. Many people recently opened euro bank accounts and some brave souls even have euro credit cards. Big businesses regularly use the currency.

But the actual notes and coins have only just hit the streets. We are starting to get used to the seven notes - adorned by drawings of bridges - and the coins, the most valuable of which is the two euro coin. And everyone knows that there are one hundred cents in a euro.

But shopping isn't easy. Shops are having to operate two tills - one for pounds and the other for euros - and many shoppers have resorted to carrying two purses. Many people resolutely refuse to deal in the new currency, though they won't have any choice early next year, when the pound finally disappears from circulation.

There is no shortage of arguments over the prices being charged. Keen shoppers bring their calculators, to work out whether they are getting a better deal in pounds or euros.

Remember decrimalisation and all the rows over the rounding up of the price of a box of matches? Well, we're back there again. The £2.50 DART return ticket should be three euros and 30 cents. But it's sneakily gone up to three euros and 50 cents. The packet of fags (amazingly, there are still smokers even with criminalisation of smoking in public) used to be £2.82. Now? Rounded up to four euros. The 85p Irish Times is precisely 1.12 euros, however.

The price of the europint has become a big issue. Publicans rounded up the £2.20 pint to three euros instead of charging 2.90. This led to a furious row, with allegations that the publicans are getting in a sneaky price increase, which will stick once the pound disappears. The Minister for Consumer Affairs has told the publicans to "think again".

There is intense speculation, meanwhile, that the government is about to call an early election after four years in office. And it will be against a less favourable economic backdrop than when the Rainbow coalition called the last one in June 1997. Then EMU was a peripheral issue but now no one is in any doubt that it will be a central feature of the coming campaign.

The economy continued to grow above the European average after the pound was locked to the other EU member currencies in 1999. But growth slowed from the record 7 per cent plus of the mid to late 1990s to between 3 and 4 per cent per annum now. And there have been a number of high profile industrial closures.

Overseas investment projects continued but the major multinationals are increasingly consolidating their manufacturing plants to one or two locations in the single currency area. The IDA has been in a succession of fights with other development agencies across Europe to land the jobs. The EU competition directorate has had to step in on a couple of occasions and the government is continually defending its grants and tax package against criticism from elsewhere in Europe.

Small Irish owned businesses have benefited from currency stability against the other EU currencies. But they have suffered from periodic swings in sterling and particularly the collapse of the British currency of late 1999, when investors reacted to the decision of the Blair government not to hold a referendum on British membership of EMU until at least 2003.

There was no provision in Partnership 2000 for adjustment to such swings and a number of smaller companies exporting to Britain went out of business, as the pound rose to £1.10p against sterling.

The resulting problems had also caused difficulties for the government. An emergency cut in PRSI, was introduced to try to help the companies affected, but the resulting economic slowdown hit the Budget and the Government had to introduce cutbacks to stay within the Maastricht budget target.

But sterling has since recovered and the economy has been improving again. Now if only the European Central Bank in Frankfurt would cut its interest rates I could reduce my repayments to the Rhineland Building Society .......