McCreevy not to be drawn on pound/euro rate

The Minister for Finance, Mr McCreevy, has ruled out seeking an early meeting of EU Finance Ministers to discuss setting the rate of entry of the pound to the euro.

Mr McCreevy, who was here for a meeting of Finance Ministers at which the issue was not raised, said that the procedure for setting the rate had been agreed last September at the Mondorf informal EU Finance Ministers' meeting. That meeting had agreed to forestall speculation in the markets in the run-up to the formal locking of currencies by an announcement on May 2nd, when the initial participants will be agreed, the rates at which the euro currencies would be locked on January 1st, 1999. "The process is well laid out," Mr McCreevy insisted, then practising his now celebrated "button-lip" strategy on any further questions about what rate he would like to see the pound joining the euro.

Mr McCreevy was slightly more forthcoming on the prospects for Italian membership of the euro. Stressing that ministers, who were discussing the Italian convergence programme, had not in any way prejudged the issue of participation, he praised the work done by the Italian Government to bring its public finances round.

"It appears to me that Italy is on course to being a participating member from the start," he said.

The verdict of the ministers on the Italian programme was largely positive but with reservations. There are still concerns whether the budget disciplines can be sustained and Ecofin conclusions refer specifically to worries about "residuals"(spending commitments currently being held back by local authorities).

The conclusions also "urged the Italian government to be vigilant on the short-term effects of the tax reform with a view to avoiding revenue losses." The Italian MInister for Finance, Mr Carlo Azeglio Ciampi, will report again to ministers on his budget plans for 1999 ahead of the May decision on euro participation.

During the debate the German Finance Minister, Mr Theo Waigel, warned that Italy's efforts for 1998 alone would not be sufficient to show that its budget reforms were structural and not just one-off. He urged the Italians to improve the transparency of their budget system.

Mr Ciampi went out of his way to reassure, insisting that Italy too "wants the euro to start as a strong euro in which the markets have confidence." Earlier, opening the meeting with a debate on the British Presidency programme, the Brisish Chancellor of the Exchequer, Mr Gordon Brown, emphasised the need to combine the move to the euro with structural reform of the European labour and capital markets. Mr Waigel and the Dutch Finance Minister, Mr Gerrit Zalm, both returned to their familiar theme of the "unfairnesss" of their budget contributions, while cohesion countries, Mr McCreevy included, reiterated their demand for the continuity of structural funding support in the post-1999 budget.

Ministers did not discuss either the membership of the executive board of the European Central Bank (ECB), or its Presidency, or that of the European Bank for Reconstruction and Development.

Again Mr McCreevy was circumspect on whether Ireland will support the Dutch ECB Presidency front-runner, Mr Wim Duisenberg, or the Frenchman, Mr Jean-Claude Trichet.

"Ireland will make its position known when it has to," he said, but did confirm that "as of now we don't have a candidate."