McCreevy coy on pound's EMU rating

The Minister for Finance, Mr McCreevy, has again declined to pinpoint the rate at which he thinks the pound should enter EMU, saying the issue will be only decided in discussions with other EU finance ministers.

"If I signal what my preferred rate would be, I would simply be giving licence to the financial community to make a lot of money," he said.

He was speaking at a meeting of the Oireachtas joint committees on finance and the public service and enterprise and small business yesterday.

He added that the final decision would take account of all the economic considerations, including inflation and competitiveness. The EU group of finance ministers - Ecofin - will meet in the first weekend of May to set the lock-in rates for the euro. Mr McCreevy said any comments about rates had no real validity until then.

The general view of the financial markets that the pound was a "clone" of sterling was described as a "complicating factor" by Mr McCreevy. He said his view was that the importance of sterling to the pound was "over-exaggerated".

He said he would continue his policy of "the less said the better" about the entry rate for the euro. His position was strongly criticised by the Fine Gael spokesman on finance, Mr Noonan, who said the Minister had a "democratic obligation" to discuss the issue.

He said either Mr McCreevy knows the rate and is not telling the public or there is division among Government policy makers. The Labour spokesman on finance, Mr Derek McDowell, said Mr McCreevy's silence was being seen by the markets as "a statement of policy anyway".

He voiced concerns over possible inflation pressures at the time of entering EMU and said this would be made worse when £500 million entered the economy in April as a result of changes in the budget.

He said there was a good case for not going in at a level as low as DM2.41.

Asked about what would happen to the billions of pounds in the Central Bank reserves, Mr McCreevy said his "preferred option" would be to use them to reduce the national debt, but nothing had been decided yet.