James Browne (Wexford, Fianna Fail) | Oireachtas source

This is an amendment to the Economic and Monetary Union Act 1998 to provide for the recovery of costs by the Central Bank of Ireland for the functions carried out relating to euro coins and, in particular, relating to the protection of the euro against counterfeiting. As he was required to do under Council decision 98/415/EC, the Minister for Finance requested an opinion from the European Central Bank, ECB, on the Counterfeiting Bill. This opinion was supportive of the Bill in general, stating that the ECB welcomed the draft law which will ensure the preservation of euro banknotes and coins in circulation, resulting in continued public confidence in euro banknotes.

The opinion, however, noted that the Central Bank of Ireland should be remunerated for its tasks in respect of euro coins, in particular in the protection of the euro against counterfeiting, and noted a concern that this was only partially done currently.

The issue of notes and coins is treated differently under European law. The governing council of the ECB has the exclusive right to authorise the issue of euro banknotes within the EU. Such notes may be issued by the ECB and by national central banks. In formal terms, it is the task of the European System of Central Banks, ESCB, and, therefore, may be funded from the Central Bank of Ireland's own resources without giving rise to monetary financing concerns.

Member states, on the other hand, may issue euro coins subject to approval by the ECB of the volume of such issue. This task is done by the Central Bank of Ireland as an agent for the Minister for Finance. The monetary financing prohibition requires that such tasks be fully and adequately remunerated. Sections 13 and 14 of the EMU Act provide for the funding of the Central Bank's role in the issue of euro coins to ensure compliance with the monetary financing prohibition. In accordance with these provisions, the bank may offset its expenses associated with the issue of euro coins against the income that is thereby generated with any shortfall being met from funds to be advanced by the Minister for Finance from the Central Fund.

While the ECB opinion acknowledges that sections 13, 14 and 14(a) of the EMU Act provide for reimbursement and remuneration in the provision of euro coins, it notes that this reimbursement does not cover certain relevant costs that arise from the performance by the Central Bank of Ireland of its functions in respect of counterfeiting, and in particular the operation of the coin national analysis centre. The amendment will address this issue by extending the relevant provisions of the EMU Act to cover these functions. The net effect is that the amount that is returned by the Central Bank to the Central Fund will be reduced by the cost of the operation of the functions in respect of counterfeiting. We anticipate this will be in the order of about-----

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