THE Minister for Finance, Mr Quinn, used his Budget speech to reaffirm his determination that Ireland would be among the initial group of states qualifying for European Monetary Union.
"The policies required to ensure our successful participation within EMU are already being implemented and will need to be intensified in the lead up to January 1999," said Mr Quinn yesterday.
"EMU will be good for Europe and for Ireland. It will provide us with a stable currency, low interest rates and low inflation. It will also remove currency risks as well as reducing transaction costs. EMU also provides challenges, particularly as regards the relationship between countries taking part from the outset and the other states," he told the Dail yesterday.
A study of the implications of monetary union commissioned by the Department of Finance will be published by the middle of the year and will give more detailed information for decision making, according to Mr Quinn. The study is being carried out by the State backed Economic and Social Research Institute.
One essential ingredient in the process of positioning Ireland for EMU is ensuring that the public finances are in a healthy condition, according to Mr Quinn.
The real increase in current supply spending for 1996 will be 2.5 per cent compared to an average of 5.5 per cent over the last five years, he said. This was despite the abolition of third level fees, more students staying on to do the leaving certificate and increased health spending, he said.
"The Government is committed to firm management of the public finances ... keeping the General Government Debt below 3 per cent of GDP each year is, of course, crucial in the context of the Maastricht criteria," he said.
Mr Quinn said that, with EMU in mind, he had adopted a prudent approach in framing his expenditure targets for 1996 which was similar to the one adopted in previous years. The result was an Exchequer Borrowing Requirement of £729 million, representing 2 per cent of the Gross National Product. The General Government Deficit would be equivalent to 2.6 per cent of GDP, well within the Maastricht guideline of 3 per cent, he said.