Ireland is fully committed to joining monetary union as a founder member in 1999, despite the British Chancellor's announcement that sterling would not enter until after 2002, the Minister for Finance, Mr McCreevy, has reiterated.
The Labour government's decision that sterling will not join during the lifetime of this parliament means the Irish economy will be exposed to swings in the value of the British currency for a protracted period after Ireland joins monetary union. But the Government has always insisted that Ireland would enter the currency on day one, whatever Britain chooses to do.
It is now practically certain that Ireland will face three or four years during which we will be members of the single currency but our largest trading partner, Britain, will be outside.
The announcement also complicates the decision the Government will have to make next May on the rate at which the pound will enter the system.
Last night, Mr McCreevy insisted that the Government had already published the national change-over plan to the single currency and that work would continue "at all levels" to ensure that as Ireland moved to a single currency, business would be adequately informed and prepared.
Mr Tony Blair's government will be hoping for a positive reaction to its "in principle" commitment to join a successful European single currency sometime after the next British general election.
With the issue likely to dominate that campaign when it comes, Mr William Hague, the Conservative leader, described yesterday's government statement as a commitment to abolish sterling. A spokesman for the Tory leader said: "This is a declaration of the abolition of the pound. It is just a question of when."
The Chancellor, Mr Gordon Brown, effectively ruled out British participation in European monetary union during the present parliament, which could run until May 2002. At the same time, he said government and business should prepare to provide "genuine choice" so that Britain "will be in a position to join a single currency, should we wish to do so, early in the next Parliament".
In his long-awaited statement to MPs, the Chancellor declared Mr Blair's "the first British government to declare for the principle of monetary union". And he established "clear blue water" between Labour and the Conservatives with his assertion that "there is no overriding constitutional bar to membership".
Mr Brown recognised that some considered the "major pooling of economic sovereignty" resulting from EMU a bar to participation. That objection, he said, was understandable and one argued from principle. But he declared: "In our view it is wrong. If a single currency would be good for British jobs, business and future prosperity, it is right, in principle, to join."
But as the President of the European Commission, Mr Jacques Santer, voiced disappointment at the British decision to rule out membership in the 1999 first wave - while welcoming "the overall positive UK attitude towards the euro" - some Labour MPs joined Conservative and Liberal Democrat charges that Labour was still facing both ways over Europe.
Analysis and summary of Gordon Brown's text: page 16
Editorial comment: page 15