Ireland now looks certain to qualify for EU monetary union, along with 10 other memberstates, according to new figures submitted to the European Commission.
They showed that Ireland had one of the best sets of budgetary figures in the EU for 1997, and that all the other likely members of the single currency also meet the criteria.
The strong performance of the Irish public finances is continuing this year, with the Government already increasing its estimates for this year's surplus.
The Department of Finance has confirmed that Ireland achieved an Exchequer surplus of 0.9 per cent of gross domestic product in 1997, compared with an original Budget projection of a deficit of 1.5 per cent.
The Department is already pencilling in a surplus of 0.5 per cent this year, up from its earlier 0.3 per cent prediction.
The Minister for Finance, Mr McCreevy, yesterday described the result as "a milestone in Ireland's fiscal performance which confirms that the public finances are now on a stable footing." The only important decision now facing the Minister is the rate at which the pound should be tied in to the single currency. Exporters and farming groups favour the central ERM rate of 2.41 deutschmarks, but the Irish Congress of Trade Unions this week came out in favour of a rate of DM2.50.
The official economic results for 1997 were submitted by all EU member-states to the European Commission yesterday and confirm that 11 countries are likely to participate in the single currency from day one.
In a joint statement with the President of the Commission, Mr Jacques Santer, the Economic Affairs Commissioner, Mr Yves Thibault de Silguy, welcomed the evidence of successful convergence but would only say that they were "confident a large number of countries will be participating in the launch of the Euro on January 1st, 1999".
Greece is unable to make the grade yet, and Britain, Sweden and Denmark have invoked opt-outs, although they all comply with the criteria. The other 11 must wait for the final decision on who will be in. It is due to be taken by heads of state over the first weekend of May.
In the meantime the verdicts of the Commission and the European Monetary Institute (EMI), due on March 25th, will be eagerly awaited. Both reports are expected to be favourable to all 11 applicant countries, although they will lay a heavy emphasis on the need to sustain the strong performances recorded last year.
Yesterday's results confirm the speed of the French and German economic recoveries, although the French budget deficit just squeezed in on the 3 per cent limit.
Italy also met the budget deficit target. Remarkably, Rome has cut its deficit from 10 per cent of GDP in just four years, but it is not yet out of the woods. Some of the success is attributable to a one-off euro-tax, and the government will have to convince the EMI and the Commission that this performance is repeatable.
EU confirms 11 countries to participate: page 16
