Two EU Council Regulations will together make up the legal framework for the use of the euro. The first, Council Regulation (EC) No 1103/97 on certain provisions relating to the introduction of the euro, was adopted on 17 June 1997 and was published in the Official Journal of the European Communities on 19 June 1997³ . It provides for the replacement of the ECU by the euro at the rate of one to one from 1 January 1999 and for continuity of contracts, and lays down technical rules for the conversion rates, including rounding rules.
The second, Council Regulation (EC) No 974/98 on the introduction of the euro, was adopted on 3 May 1998 and was published in the Official Journal on 11 May 19984. This Regulation contains the remaining provisions for the legal framework for the use of the euro, including the provisions to apply during the period 1 January 1999 to 31 December 2001.
At national level, the Central Bank Act, 1998 provides for the compatibility of Irish Central Bank legislation with Articles 107 and 108 of the Treaty on European Union: these deal, respectively, with the independence of national central banks and with the requirement that national legislation, including central bank statutes, be compatible with the Treaty and the Statute of the ESCB and the ECB.
The Finance Act, 1998 (Section 47 and Schedule 2) provides for the taxation changes required for the introduction of the euro on 1 January 1999. In general, the amendments seek to treat, for tax purposes, gains and losses arising from the introduction of the euro in the same way as foreign exchange gains and losses are treated at present.
The Economic and Monetary Union Act, 1998 declares that by virtue of Council Regulation (EC) No 974/98, from 1 January 1999 the currency of the State will be the euro and the Irish pound will be a subdivision of it. The Act also removes incompatibilities between Irish monetary law and the EU legal framework for the use of the euro and gives effect to enabling provisions in that framework, for example in relation to the redenomination into euro of outstanding debt. The Act is also designed to facilitate companies which wish to redenominate and renominalise their capital structure into euro before the final changeover to the euro on 1 January 2002.
