AGREEING the principles of the single currency was the highlight of the Dublin summit this weekend. The controversial agreement took the best part of two days for Europe's finance ministers, but agreement when it came was fast and unequivocal.
But a lot of work remains to be done. And the lead-up to the Amsterdam summit in June next year promises to be almost as busy for the group of finance ministers, Ecofin.
All of the work will be a follow-on to the three major elements of the single currency addressed by the Dublin summit this weekend. The structure of the new exchange rate mechanism, which will regulate the movements of the new euro currency against those remaining on the outside, was agreed. The ministers have now been invited to prepare a draft resolution on the fundamental elements of the new exchange rate mechanism in June next year.
The ministers finalised the urgent aspects of the legal frame-work for the euro. These have yet to be adopted while agreement on the other provisions is not quite complete. The Council has now been asked to adopt the first regulation "without delay". The second regulation will be adopted by the Council as early as possible in 1998, when the decision on which states will participate in the euro area is taken.
While the principles and main elements of the new Stability and Growth Pact to ensure member-states behave in a fiscally responsible fashion after monetary union have been agreed, there is much left to be done.
Ecofin has now been asked to "examine intensively" Commission proposals for two key regulations. One is on the strengthening of the surveillance and co-ordination of budgetary positions while the other is on the implementation of the excessive deficit procedure.
Surveillance is essentially an early warning mechanism to ensure that member-states and the new European Central Bank will be aware in plenty of time if a country is in danger of running an excessive deficit.
Ecofin is also being asked to prepare a draft resolution on the Stability and Growth Pact to be adopted by the Council in June 1997. This will record the commitments of member-states, the Commission and the Council to a "strict application" of the treaty, as well as the legal provisions on budgetary stability.
One paragraph in the presidency conclusions which may set off a few alarm bells in Ireland is on exchange rate stability. The Council has "underlined the importance" of exchange rate stability.
This is the one area which Ireland could conceivably fail the Maastricht criteria for entry into the single currency.
Most serious contenders have been holding their currencies within a 2.25 per cent central band around the ECU. The pound, however, has been one of the most volatile currencies in the grid in recent weeks. It has appreciated significantly against the mark and other currencies.
Another initiative which has been progressing in this area is SEM 2000 - the Commission's sound and efficient management initiative.
This principally proposes to improve the financial management of EU expenditure. The Council and Commission have now been invited to report on their progress at the meeting in December 1997.
One area which could cause problems for Ireland is in the framework for stability. The problem is that membership of ERM2 is voluntary, and as the British are not even in the current ERM, it seems unlikely they will join after monetary union.
While Ecofin has stated that member-states with a derogation can be expected to join and thus to have a central rate against the Euro, it is voluntary.
But in a rather weak paragraph member-states outside ERM2 can only be presented with non-binding recommendations. This ill "seek to ensure" real exchange rate misalignments are avoided.
This is likely to prove of little use to Irish exporters worried that Britain could pursue a policy of competitive devaluation after we are locked into the single currency.