They were not expected to benefit from it - in fact they were thought more likely to suffer adverse consequences - but the traditional Irish industries exporting to Britain always believed they were better off inside economic and monetary union than outside it.

Sterling volatility and weakness outside the euro zone was the greatest fear.

So far, however, the opposite has been the case. In an eerie repeat of the 1979 experience, sterling has proved much stronger than anticipated, giving Irish exporters a significant competitive edge.

Now it appears they are also benefiting from a major shift away from invoicing in sterling in favour of the pound and other euro currencies.

Irish exchange rate policy has been viewed as bedevilled by our exports being split roughly evenly between Britain and the rest of the EU zone.

In practice, the share of trade going to Britain has been declining steadily while that for the EU 11 has been rising at a fairly rapid pace.

The British share of combined exports and imports is now around 26 per cent while that for the EU 11 is 32 per cent.

When it comes to exchange rate policy, however, trade shares are of limited relevance since what matters is the currency in which the trade is invoiced.

We do not have proper statistics on this but surveys have indicated most of our trade is done in sterling and the dollar.

While the share of trade with the EU 11 is around one-third, it is likely that the proportion of trade invoiced in those currencies is significantly less.

On the face of it, therefore, participating in exchange rate systems such as the European monetary system and the euro exposed us to fluctuations a-vis regarding sterling - our biggest invoicing currency - while tying us into a much less relevant block. In fact, the reverse is happening.

`Businesses seem to have forgotten about the euro' While many believed the euro would become a more significant invoicing currency, this was only expected to happen over a long period.

In a recent assessment of the international role of the euro, the European Central Bank suggested the value of euro-denominated world exports was likely to be similar to that of euro-area exports.

By contrast, the value of world exports settled in US dollars is nearly four times as high as actual US exports.

Clearly, the ECB did not expect any dramatic change in the short term.

This assessment may, however, be unduly pessimistic and there are signs that, at least in so far as trade with the Britain is concerned, a much more rapid change is in train.

Though they have received little publicity, two recent Forfas surveys of EMU business awareness indicate invoicing patterns between Ireland and Britain are changing dramatically (see table).

At the beginning of the year, as one would expect, about 70 per cent of exports to the UK were quoted in sterling and around one-third in pounds.

By July, however, the responses indicated the share in sterling had fallen to 54 per cent while that of the pound and the euro combined had risen to 56 per cent - a rise of no less than 22 percentage points.

Though not nearly as dramatic, there were significant changes on the imports side too. The share of invoicing in sterling fell by 5 per cent, that in pounds was static but 7 per cent said they were quoting in euro.

These are fairly dramatic movements in a relatively short period of time.

They are also unexpected given that the euro seems to have been forgotten about by businesses, especially small to medium firms, not just in Ireland, but right across the euro zone.

These trends are, moreover, expected to continue and by 2002 roughly 60 per cent of exporters to and 55 per cent of importers from Britain expect to be quoting in euro. Though tentative, the evidence to date points to a situation whereby invoicing in euro would become the norm with sterling relegated to a much more minor role.

This, of course, would bring the benefits of the single currency to Irish exporters and importers in a way that was hardly expected.

Trading in their own currency would remove the costs associated with conversion and hedging and transfer them to the UK exporter.

This could be important in the much more competitive environment that the euro will generate.

It would also provide the exchange rate certainty which would facilitate forward planning by Irish business in a way that is not possible at the moment. Finally, it would make the question of whether or not the UK joins the euro much more academic.

Just as one swallow does not make a summer neither does one survey. It is interesting, therefore, that the trends in the Forfas survey are confirmed in separate work.

A KPMG study of UK to euro zone transactions shows that while the overall share of sterling as a payment currency has remained static or even risen slightly, that of the euro and its component currencies has jumped.

Consistent with the experience in Ireland, exporters to the UK across Europe are forcing their own currencies on the British importer.

The share of payments in euro and its component currencies made by UK companies rose from 19 per cent in the first quarter to 40 per cent in the second.

Pat McArdle is head of strategic and economic planning in Ulster Bank Markets. The views expressed in this article are personal and do not necessarily reflect those of Ulster Bank Markets.