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TITHE AN OIREACHTAIS

An Comhchoiste um Ghnóthaí Eorpacha

An Dara Tuarascáil Eatramhach ar AEA: Freagraí ar Mholtaí an Chomhchoiste

HOUSES OF THE OIREACHTAS

Joint Committee on European Affairs

Second Interim Report on EMU: Responses to Recommendations of the Joint Committee

Meitheamh, 1999

June, 1999

TITHE AN OIREACHTAIS

An Comhchoiste um Ghnóthaí Eorpacha

An Dara Tuarascáil Eatramhach ar AEA: Freagraí ar Mholtaí an Chomhchoiste

HOUSES OF THE OIREACHTAS

Joint Committee on European Affairs

Second Interim Report on EMU: Responses to Recommendations of the Joint Committee

Meitheamh, 1999

June, 1999

28/10

Table of Contents

Foreword

As part of its 1999 work programme the Joint Committee decided to continue to monitor the EMU Changeover procedures following on the main report of the Joint Committee to the Houses of the Oireachtas at the end of 1998. This is the second interim report in 1999 and outlines the responses to the recommendations made by the Joint Committee in its main EMU report.

The Joint Committee requests that this report be the subject of a debate in both Houses of the Oireachtas.

___________________

Bernard J. Durkan T.D.

Chairman

June 1999

EMU: Second Interim Report of the Joint Committee on European Affairs

1.In December 1998, the Joint Committee on European Affairs presented a report on Economic and Monetary Union to the Houses of the Oireachtas. This report was prepared by Mr. Gay Mitchell T.D. The report contained 15 recommendations which are summarised at Appendix 2.

2.In March 1999 the Joint Committee wrote to the various bodies concerned with those recommendations and asked then to outline the position with regard to the recommendations.

3.The various bodies have now responded and the Joint Committee would like to bring these responses to the attention of the Houses. The responses are contained in Appendix 1.

4.The Joint Committee would like to thank the following bodies for their assistance:

the Department of Finance;

the Director of Consumer Affairs;

Forfás;

IBEC;

the Euro Changeover Board of Ireland;

the Department of Foreign Affairs; and

the Department of Environment and Local Government.

5.The Joint Committee wishes to seek a debate on this report in each House of the Oireachtas.

6.As well as the main report, the Joint Committee has now made two interim reports in 1999 on this issue, of which this is the second. In accordance with its 1999 work programme the Joint Committee will continue to monitor the EMU changeover procedures. Earlier this year, it heard presentations from the Director of Consumer Affairs and from the Irish Bankers’ Federation and the resulting report was presented in May 1999 entitled EMU - Interim Report of Changeover Procedures. The Joint Committee intends to take up again the question of changeover procedure with both bodies in the Autumn and a third interim report will then be made to the Houses, before the end of 1999.

AN COMHCHOISTE UM GHNÓTHAÍ EORPACHA JOINT COMMITTEE ON EUROPEAN AFFAIRS

Imeachtaí an Chomhchoiste Proceedings of the Joint Committee

Dé Céadaoin, 23 Meitheamh, 1999

Wednesday, 23rd June,1999

1.The Committee met at 2.10 p.m.

2.Members Present.

The following Members were present:

Deputies Ulick Burke, Pat Carey, Bernard J. Durkan (in the Chair), Tony Gregory, Séan Haughey, John McGuinness, Gay Mitchell, Seán Power and Jack Wall and Senators Willie Farrell (in substitution for Senator Paddy McGowan), Camillus Glynn (in substitution for Don Lydon) and Brendan Ryan.

3.Report on Economic and Monetary Union.

The Chairman brought forward a second interim report on “Economic and Monetary Union” which was read and agreed.

Ordered: To report accordingly.

4.Adjournment.

The Committee adjourned at 2.28 p.m. until Thursday, 1st July, 1999.

1.Chruinnigh an Coiste ar 2.10 p.m.

2..Comhaltaí i Láthair.

Bhí na Comhaltaí seo a leanas i láthair:

Na Teachtaí Ulic de Búrca, Pádraig Ó Carú, Brian Mac Dhurcáin (i gCeannas), Antóin Ó Greagóir, Seán Ó hEochaidh, Seán Mac Aonghusa, Gabriel de Mistéal, Seán de Paor, agus Seán de Bhál agus na Seanadóirí Liam Ó Fearaíl (in ionad an tSeanadóra Pádraig Mac Gabhann), Camillus Mag Fhloinn (in ionad an tSeanadóra Domhnall S. Ó Loideáin) agus Breandán Ó Riain.

3.Tuarascáil ar Aontas Eacnamaíoch agus Airgeadaíochta.

Tharraing an Cathaoirleach anuas an dara tuarascáil eatramhach ar “Aontas Eacnamaíoch agus Airgeadaíochta” agus rinneadh í a léamh agus a aontú.

Ordaíodh: Tuairisciú dá réir.

4.Athló.

Chuaigh an Coiste ar athló ar 2.28 p.m. go dtí Déardaoin, 1 Iúil, 1999.

Appendix 1

Responses of bodies and institutions to the recommendations contained in the December 1998 Report of the Joint Committee on Economic and Monetary Union

Appendix 2

Recommendations of the Joint Committee Report (December 1998)

[NOTE: the page numbers at the end of each paragraph refer to pages in the December 1998 report]

Recommendations

The following is a summary of the recommendations made in the body of the report:

1.The Committee recommends that the proposed six months of dual currencies (January–June 2000) be shortened to perhaps two months starting on 1 February, 2002. In this way the winter sales would be over and also a shorter “dual period” would be less confusing for consumers and less expensive for retailers. The Minister for Finance and the Taoiseach should report back to the Oireachtas on their efforts with ECOFIN and the European Council in this regard (see pages 14 and 17).

2.The Committee recommends that the Department of Finance lay a report on the continuing implications for the Irish economy of the Stability and Growth Pact before the Oireachtas twice annually, before any such report is submitted to European institutions (see page 14).

3.The Director of Consumer Affairs should be authorised, and funded to appoint a “Yell and Tell” Consumer Representative in each Euro-Parliamentary constituency on a modest fee, free-lance basis during the changeover period (see page 18).

4.The Committee recommends that the Director of Consumer Affairs pay particular attention to money-lending practices and how interest rates are applied by moneylenders, to ensure that poorer persons are not further exploited in terms of interest charges (see page 19).

5.The Committee recommends that FORFÁS and IBEC intensify their efforts to educate employees and customers in advance about issues surrounding the Euro, encouraging companies and helping to design specific programmes (see page 19).

6.The Committee recommends that concerns it raises regarding the availability of computer packages be given priority consideration by Government, if not addressed by the time this report is issued (see page 23).

7.The Committee recommends that the campaign of FORFÁS and the Euro Changeover Board be re-examined so as to ensure that SMEs are targeted for special assistance towards preparation for EMU (see page 23).

8.The Committee recommends that the Director of Consumer Affairs publish details of his intentions in relation to assistance to SMEs, especially under Section 149 of the Consumer Credit Act, as soon as possible (see page 23).

9.The Committee recommends that FORFÁS and the Euro Changeover Board give careful consideration to ways and means of assisting sectors of industry to change to Euro invoicing together where practicable (see page 24).

10.The Committee recommends that the Communicating European Task Force be again chaired by a Minister of State, as was the norm before its transfer to the Department of Foreign Affairs, and that the Task Force report on its activities twice annually to the Houses of the Oireachtas (see page 24).

11.Sterling devaluation could cause serious problems for Irish indigenous industry. The Committee therefore recommends that a special strategy be put in place to provide for such a possible eventuality. The Minister for Finance should lay plans for such a strategy before both Houses of the Oireachtas (see page 26).

Anticipating future budget surpluses and a forecasted debt/GNP ratio of about 30 per cent. in the first 5 years of the new century, it would not seem prudent to apply forecasted surpluses to simply reducing Government indebtedness, especially when wise investment in housing, and other infrastructure, is badly needed.

12.The Committee recommends that part of the forecasted annual budget surpluses be allocated to investment in needed additional infrastructure in such a way as to attract private partnership co-funding (see page 26).

13.The Committee recommends that consideration be given to setting specified increased local authority house building quotas, and financing this in part out of forecasted budget surpluses, thereby reducing these surpluses, by investing in new local authority housing stock, accompanied, where appropriate, by upgraded infrastructure such as roads, rail, etc. (see page 27).

14.The Committee suggests that consideration be given to the creation of a National Contingency Fund, into which part of the forecasted future budget surpluses be paid to provide for possible unforeseen events arising from EMU (see page 28).

15.The Committee recommends that the ESRI be asked to undertake further studies on how income flexibility to cope with economic shocks can be extended in the private sector and implemented in the public sector (see page 29).

Appendix 3

Members of the Joint Committee

Joint Committee on European Affairs

List of Members

Appendix 4

Orders of Reference of the Joint Committee

Joint Committee on European Affairs

Orders of Reference

(1) (a)That a Select Committee, which shall be called the Select Committee on European Affairs, consisting of 14 members of Dáil Éireann (of whom 4 shall constitute a quorum), be appointed to consider such Bills, the statute law in respect of which is dealt with by the Department of Foreign Affairs, as shall be referred to it by Dáil Éireann from time to time.

(b)For the purpose of its consideration of Bills under paragraph (1) (a), the Select Committee shall have the powers defined in Standing Order 78A(1), (2) and (3).

(c)For the avoidance of doubt, by virtue of his or her ex officio membership of the Select Committee in accordance with Standing Order 84(1), the Minister for Foreign Affairs (or a Minister or Minister of State nominated in his or her stead) shall be entitled to vote.

(2) (a)The Select Committee shall be joined with a Select Committee to be appointed by Seanad Éireann to form the Joint Committee on European Affairs to—

(i)consider such matters arising from Ireland’s membership of the European Communities and its adherence to the Treaty on European Union, as it may select,

(ii)consider such—

(I)programmes and guidelines prepared by the Commission of the European Communities as a basis for possible legislative action and such drafts of regulations, directives, decisions, recommendations and opinions of the Council of Ministers proposed by the Commission,

(II)acts of the institutions of those Communities,

(III)regulations under the European Communities Acts, 1972 to 1995,

(IV)other instruments made under statute and necessitated by the obligations of membership of those Communities,

as it may select,

(iii)consider such other matters as may be jointly referred to it from time to time by both Houses of the Oireachtas, and

(iv)represent the Houses of the Oireachtas at the Conference of European Affairs Committees (COSAC),

and shall report thereon to both Houses of the Oireachtas.

(b)The quorum of the Joint Committee shall be 5, of whom at least 1 shall be a member of Dáil Éireann and 1 a member of Seanad Éireann.

(c)The Joint Committee shall have the powers defined in Standing Order 78A(1) to (9) inclusive.

(d)The following persons may attend meetings of the Joint Committee and of its sub-Committees and may take part in proceedings without having a right to vote or to move motions and amendments:

(i)members of the European Parliament elected from constituencies in Ireland (including Northern Ireland),

(ii)members of the Irish delegation to the Parliamentary Assembly of the Council of Europe, and

(iii)at the invitation of the Joint Committee or of a sub-Committee, as appropriate, other Members of the European Parliament.

(3)The Chairman of the Joint Committee, who shall be a member of Dáil Éireann, shall also be Chairman of the Select Committee.

(1) (a)That a Select Committee consisting of 5 members of Seanad Éireann shall be appointed to be joined with a Select Committee of Dáil Éireann to form the Joint Committee on European Affairs to—

(i)consider such matters arising from Ireland’s membership of the European Communities and its adherence to the Treaty on European Union, as it may select,

(ii)consider such—

(I)programmes and guidelines prepared by the Commission of the European Communities as a basis for possible legislative action and such drafts of regulations, directives, decisions, recommendations and opinions of the Council of Ministers proposed by the Commission,

(II)acts of the institutions of those Communities,

(III)regulations under the European Communities Acts, 1972 to 1995,

(IV)other instruments made under statute and necessitated by the obligations of membership of those Communi-ties, as it may select,

(iii)consider such other matters as may be jointly referred to it from time to time by both Houses of the Oireachtas, and

(iv)represent the Houses of the Oireachtas at the Conference of European Affairs Committees (COSAC),

and shall report thereon to both Houses of the Oireachtas.

(b)The quorum of the Joint Committee shall be 5, of whom at least 1 shall be a member of Dáil Éireann and 1 a member of Seanad Éireann.

(c)The Joint Committee shall have the powers defined in Standing Order 62A (1) to (9) inclusive.

(d)The following persons may attend meetings of the Joint Committee and of its sub-Committees and may take part in proceedings without having a right to vote or to move motions and amendments:

(i)members of the European Parliament elected from constituencies in Ireland (including Northern Ireland),

(ii)members of the Irish delegation to the Parliamentary Assembly of the Council of Europe, and

(iii)at the invitation of the Joint Committee or of a sub-Committee, as appropriate, other Members of the European Parliament.

(2)The Chairman of the Joint Committee shall be a member of Dáil Éireann.