EU leaders have taken the final, irrevocable step towards launching the historic monetary union project, but only after a major dispute which is seen as threatening the credibility of the new currency.
A compromise deal over the presidency of the European Central Bank may spark nervous trading on financial markets and is facing strong political criticism.
The Brussels European Council endorsed the recommendations of the European Commission and Ecofin that 11 member states, including Ireland, should participate in the euro from its inception in January. It was effectively the final political act ahead of the launch.
However, this agreement was only reached after 11 hours of haggling over the terms of appointment of the first President of the European Central Bank, which will manage the new currency, the euro.
A bitter row over the appointment of its first President, the Dutchman, Mr Wim Duisenberg, and the formula by which it was resolved, seemed only to emphasise the frailty of Maastricht Treaty guarantees that the bank would operate independently of political influence.
Mr Duisenberg, currently head of the European Central Bank's forerunner, the European Monetary Institute, will take office from July 1st. But he has told leaders that he does not intend to serve his full eight-year term. When he goes, he said in a carefully crafted statement, will depend entirely on himself, but he made clear he wished to oversee the introduction of notes and coins in the first half of 2002. He will then be succeeded by the French Central Bank governor, Mr Jean Claude Trichet.
Attempts by the French to insist on a particular date for his departure were blocked by the German Chancellor, Dr Kohl. The ambiguity of Mr Duisenberg's statement led within minutes of the summit's conclusions to widely differing interpretations from France's President Chirac and other leaders.
Defending the compromise, the British Prime Minister and President of the Council, Mr Tony Blair, insisted the deal preserved the sanctity of the Maastricht Treaty.
The Taoiseach, Mr Ahern, said he was pleased that Mr Duisenberg would stay until the end of the transition period. "We need consistency and continuity," he said, arguing that Mr Trichet, "an excellent candidate", will follow him for eight years, ensuring at least a decade of that consistency. The independence of the bank "won out over any other consideration", Mr Ahern insisted.
However, financial markets may feel otherwise and will be closely watching the political fallout. Investors may fear that the independence of the European Central Bank from political influence has been compromised. The Dublin stock market will be open today to react to the developments.
The deal also faced strong political criticism. In Germany, the opposition parties said it was a dilution of treaty provisions.
The President of the European Parliament was furious. "I would say it's no good at all for the European Central Bank to begin like this," a grim-faced Mr Jose Marie Gil-Robles told a news conference. "Let us hope that the baby born in such a bad form can recover and be strong in the future," he said.
The summit, however, ended by making all the key decisions needed to keep the euro project on track.
The President of the European Commission, Mr Jacques Santer, commented: "I have a great feeling of satisfaction. It is a great moment in European history."
In an important declaration leaders committed themselves to tighter budget discipline and collective monitoring of each other's budget strategies.
The Taoiseach said he had also reiterated the Government's commitment to continued stability and control of expenditure.
