Oireachtas

Disclosure of rate of pound's entry into EMU sought

The Minister for Finance, Mr McCreevy, was accused of shirking his responsibilities by refusing to indicate the rate at which…

Thu Jan 29 1998 - 00:00

The Minister for Finance, Mr McCreevy, was accused of shirking his responsibilities by refusing to indicate the rate at which he wanted the currency to lock into European Monetary Union.

The Fine Gael spokesman on finance, Mr Michael Noonan, said the Minister was "seriously out of line" with the other member-states. The other 10 members who intended joining EMU were "hugging their central rate".

He added that Mr McCreevy's "Hamlet-like procrastination" was not going to impress the markets.

Mr McCreevy rejected the accusations and said some people wanted him to make his decision last July. "The policy I have adopted in not giving the markets the indication has been the correct one and I think history will prove that to be so."

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The Minister said the Government's intention "is that Ireland joins EMU at an exchange rate that meets the needs of the economy in the fullest sense of the term, and that between now and decisions day we will be keeping the issue under active review."

There would be an announcement in May of the bilateral exchange rates of the currencies of the participating member-states. Before then "it would be totally irresponsible to signal my intentions in any particular way. It is a matter which must be decided by unanimity of all member-states."

The Fine Gael deputy described the Minister's position as "downright silly". If Mr McCreevy left it any longer "it is the speculators who will decide the Irish rate rather than the Irish Government advised by the Minister for Finance."

Mr McCreevy replied: "It is not the job of the Minister for Finance to encourage the markets in any one direction or another. Let them make their decision as best they can. Their job is to make money it is not my job to assist them."

No decision had been taken on what the mechanism would be for deciding rates and the setting of those bilateral exchange rates had to be done with unanimity by the member-states.

"You can't just wake up one morning and say `there's an old rate I'd like now. I think I'll go for that particular rate'."

"It's as clear as crystal that we're the only people who don't know what rate we're going in at," Mr Noonan responded.

By not giving an indication of that rate, the Minister "is causing speculation in the market and he is being unfair to people who are involved in import and export activities, where the rate at which we locked in is becoming increasingly relevant."