Strict arrangements to monitor the budget policy of the euro member-states have been agreed by finance ministers. A toughly-worded declaration, issued after they met yesterday evening, means the Minister for Finance, Mr McCreevy, will have to outline his Budget plans to the EU Council, before it can be announced in Dublin.

The new budget rules were agreed as Ireland was officially nominated as one of the 11 countries to enter the single currency on January 1st next year. The meeting of finance ministers in Brussels yesterday formally recommended the membership list to the Summit, which will agree it in Brussels today. According to the British Chancellor of the Exchequer, Mr Gordon Brown, who is president of the council of finance ministers, it was "an historic decision of great import".

The meeting also ratified the declaration which emphasises budget discipline and employment. It calls for closer co-ordination of economic policies and highlights the strict surveillance which will be applied to the policies of all member-states.

Specific measures include a commitment from member-states to outline budgetary intentions for 1999. However, Mr McCreevy insisted that this would only be in very broad terms and would not require him to disclose any of his Budget detail ahead of time.

The declaration states that the surveillance of budgetary positions will begin on July 1st. As a result, the finance ministers will meet informally over the coming months to start the monitoring work.

The declaration also restates the commitment of all states to use any excess monies in their exchequers to reduce debt, rather than increase spending or cut taxes. In addition, there is an obligation on countries with high levels of debt, principally Belgium and Italy, to reduce debt level "rapidly".

The declaration also confirms that no specific transfers can be sought, illustrating the determination of Germany in particular that the richer member-states will not be called on to "bail out" any memberstate which gets into difficulty.

"Monetary union cannot be invoked to justify specific financial transfers," according to the declaration. The draft declaration has also been amended to include more detail on employment, on the insistence of France. It promises to take "all necessary initiatives" to combat unemployment.

EU finance ministers also made a commitment to make capital markets more efficient and to ensure easier access to the markets and to venture capital funds, particularly for small and medium-sized enterprises.

The declaration was first promoted by German Finance Minister, Mr Theo Waigel at an informal meeting of finance ministers in York about a month ago. He was anxious to ensure that tough measures on economic monitoring, agreed in Dublin in December 1996 in the Stability and Growth Pact, come into play this year.

Speaking before the meeting, Mr McCreevy dismissed talk of a possible revaluation of the central ERM rates of the pound and a number of other currencies, when finance ministers decide today the exchange rates at which at the member currencies will lock together.

According to Mr Brown, there are huge challenges ahead and the decision should be seen as a beginning of a new era and not the end. He repeated that Britain would not be joining before the next British election but that he would hope to examine this afterwards, before holding a referendum.

Monetary union must provide a platform of stability which would allow strong economic and employment growth, he insisted.