A banknote that was issued after a deadline set by the European Union could be stopped from being issued again, according to a ruling from the European Commission.
The Commission has ruled that the notes should not be issued again after April 19, 2019.
The Irish banks that issued the notes, which were issued by the Bank of Ireland, TD, Ulster Bank and the National Bank of Scotland, were allowed to issue them after they had submitted a final plan to the Commission to use the notes in 2018.
The European Commission said in its ruling on Thursday that the use of banknotes in Ireland “must not be permitted to proceed as planned, on the basis that the banknotes are a product of the post-1921 period, which is beyond the reach of the European institutions”.
It said the Irish government “did not fully take into account the relevant legal requirements” and that it had “no confidence” that the banks would “use the notes for the purpose of their internal business activities”.
The Commission said it was also concerned that the Government did not take into consideration the implications of using the notes as “a vehicle for the financing of illicit activities, including the use to fund terrorism and other serious crimes”.
“The commission finds that, in light of the fact that the Bank has no legal right to issue banknotes, and that its use would constitute a breach of the prohibition on the use and sale of bank notes, it is necessary to impose restrictions on the sale and use of the notes,” the Commission said.
The banknotes were originally issued in 2014 to help finance the operation of the Department of Finance.
The decision was announced in response to a complaint by the group, Irish Money and Banking Association (IMBA), that the Irish Government was “entangling itself in the financial crisis of the 1920s” with “the full knowledge of the banks” and “with the connivance of the EU”.
“A banknote of this type is not the best medium for an Irish Government to use to finance a crisis,” the group said.
“This decision should be reversed and that the note issued after 2020 be used for the purposes of finance to Irish citizens, businesses and the Irish people.”‘
It is the responsibility of all governments to make sure that they have an alternative, a substitute for money’The Irish Government has said it is working to make the notes “more efficient” and to introduce a “new and improved version”.
The banknote will now only be used to finance the operating costs of the department and its “corresponding” bank, the Irish Independent has reported.
A spokeswoman for the Department for Finance said: “There are no plans to issue the new note.”
The Department of Justice said it would consider any complaints raised in relation to the notes.
“We will also look at whether there is a legal requirement for banks to use banknotes of this nature for the payment of legal fees and the costs of legal proceedings, including in relation in the recent case of the Ulster Bank,” she said.
Irish Money and Finance Association chief executive Mike Cahill said it “takes a lot to drive down interest rates” in the banking sector.
“If we see that banks are using their own legal systems to cover these costs, then we have a problem,” he said.