ECONOMIC AND MONETARY UNION Compilation of Community legislation June 1999 EUROPEAN COMMISSION IMPORTANT This publication includes extracts from the consolidated versions of the EU Treaty and the EC Treaty incorporating the changes made by the Treaty of Amsterdam, signed on 2 October 1997, and which entered into force on 1 May 1999. The extracts contained herein, including protocols, are numbered in accordance with the provisions of the Amsterdam Treaty. In consequence, references to the Treaties in other texts should be read in conjunction with the Table of Equivalences referred to in Article 12 of the Treaty of Amsterdam. The text has been produced for documentary purposes and does not involve the responsibility of the institutions. A great deal of additional information on the European Union is available on the Internet. It can be accessed through the Europa server (http://europa.eu.int) which has a page specifically devoted to the euro (http://europa.eu.int/euro). Cataloguing data can be found at the end of this publication. Luxembourg: Office for Official Publications of the European Communities, 1999 ISBN 92-828-4310-6 © European Communities, 1999 Reproduction is authorised provided the source is acknowledged. Printed in Belgium PRINTED ON WHITE CHLORINE-FREE PAPER Preface On 1 january 1999 the euro became a reality. In creating the single currency, Europe has given its citizens and its partners in the wider world tangible proof of its determination to build a community based on peace and prosperity. The launch of the new currency went ahead according to plan and the euro gained real credibility ftom the outset. For ordinary citizens the next milestone will be 1 january 2002, when the new notes and coins will be put into circulation. In the meantime, the Commission is working hand in hand with the Member States and the European Central Bank to ensure a smooth transition to what will be the major political event ofthe new millennium. Management ofthe new currency has been entrusted to the European Central Bank (ECB), the most independent central bank in the world and one whose main concern is stability. The euro will also be underpinned by a stability and growth pact. The single currency is furthermore emerging as a key instrument in the fight against unemployment: a balanced policy mix, sustained convergence and monetary stability are the foundations of an employment-friendly economic policy. The euro offers a unique opportunity for breaking out of the vicious circle of deficit and unemployment and setting in motion the dynamic ofstability and job creation. The single currency is also an essential complement of the single market. It brings to an end exchange-rate fluctuations between the currencies of participating Member States and, by eliminating the exchange risk, it will make firms more competitive and give them the springboard ftom which to withstand competition in the global economy. It will also make for jitrther integration ofgoods and services markets. In adopting the euro, the peoples ofEurope have decided to occupy a place on the international scene commensurate with their history and their economic and commercial strength. The single currency will enable Europe to enhance its position and role in the world. The euro's credibility, allied to a large and very liquid financial market, will attract foreign investment. More fimdamentally, the euro, through its recognised stability and widespread use, will help establish a better balance in international monetary relations. To achieve all this, Europe must be able to speak with one voice and hence play its rightful role on the international scene. The euro will therefore emerge as a reserve currency, a transaction currency and an investment currency; its aim is also to instil more stability into the international monetary system. The arrival of the euro is a major event on the monetary scene and offers all players on the financial market - issuers, intermediaries and investors - new opportunities for raising and investing capital. This compilation brings together the whole body of Community legislation on economic and monetary union and the introduction of the euro. The texts have been updated following the entry into force of the Amsterdam Treaty. 4 Economic and monetary union - Compilation of Community legislation It provides the appropriate legal basis for detennining the scope of the decisions taken in this area and will constitute an essential refirence tool for all those working in the field and a usefit! aid to understanding what economic and monetary union means both now and in the future. Giovanni Ravasio Director-General for Economic and Financial Affairs Contents Tables of equivalences referred to in Article 12 of the Treaty of Amsterdam 9 Part A - Extracts from the Treaty establishing the European Community, annexed protocols and declarations A 1 - Article 4 (ex Article 3a) 19 A 2 - Title VII (ex Title VI)- Economic and monetary policy 20 A 3 - Protocol on the Statute of the European System of Central Banks and of the European Central Bank 35 A 4 - Protocol on the excessive deficit procedure 50 A 5 - Protocol on the convergence criteria referred to in Article 121 (ex Article 109j) of the Treaty establishing the European Community 51 A 6 - Protocol amending the Protocol on the privileges and immunities of the European Communities 53 A 7 - Protocol on Denmark 54 A 8 - Protocol on Portugal 55 A 9 - Protocol on the transition to the third stage of economic and monetary union 56 A 10 - Protocol on certain provisions relating to the United Kingdom of Great Britain and Northern Ireland 57 A 11 - Protocol on certain provisions relating to Denmark 59 A 12 - Protocol on France 60 A 13 - Declarations 61 Part B - The scenario for the changeover to the single currency B 1 - Presidency conclusions of the Madrid European Council of 15 and 16 December 1995 on the scenario for the changeover to the single currency 65 B 2 - Annex I to the conclusions of the European Council held at Madrid on 15 and 16 December 1995 67 Part C - Decisions on Member States adopting the euro C 1 - Council decision of 3 May 1998 in accordance with Article 109j( 4) of the Treaty (98/317/EC) 75 C 2 - Council Regulation (EC) No 2866/98 of 31 December 1998 on the conversion rates between the euro and the currencies of the Member States adopting the euro 83 Part D - Legal framework for the euro D 1 - Council Regulation (EC) No 11 03/97 of 17 June 1997 on certain provisions relating to the introduction of the euro 87 6 Economic and monetary union - Compilation of Community legislation D 2 - Council Regulation (EC) No 97 4/98 of 3 May 1998 on the introduction of the euro 91 Part E - Economic policy coordination E 1 - Resolution of the European Council of 13 December 1997 on economic policy coordination in stage 3 of EMU and on Treaty Articles 109 and 109b of the EC Treaty (Parts I and Ill) 101 E 2 - Declaration of 1 May 1998 by the Ecofin Council and the ministers meeting in that Council accompanying the Council's recommendation on Member States participating in EMU 104 E 3 - Council decision of 21 December 1998 on the detailed provisions concerning the composition of the Economic and Financial Committee (98/7 43/EC) 106 E 4 - Council decision of 31 December 1998 adopting the Statutes of the Economic and Financial Committee (1999/8/EC) 108 Part F - Stability and Growth Pact, growth and employment F 1 - Resolution of the European Council on the Stability and Growth Pact - Amsterdam, 17 June 1997 113 F 2 - Resolution of the European Council on growth and employment- Amsterdam, 16 June 1997 11 6 F 3 - Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies 119 F 4 - Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure 126 Part G - Exchange rate mechanism in stage three of EMU G 1 - Resolution of the European Council on the establishment of an exchange-rate mechanism in the third stage of economic and monetary union -Amsterdam, 16 June 1997 137 G 2 - Agreement of 1 September 1998 between the European Central Bank and the national central banks of the Member States outside the euro area laying down the operating procedures for an exchange rate mechanism in stage three of economic and monetary union 140 Part H - External aspects of the euro H 1 - Resolution of the European Council of 13 December 1997 on economic policy coordination in stage 3 of EMU and on Treaty Articles 109 and 109b of the EC Treaty (Part II) 151 H 2 - Report of the Council to the European Council on the state of preparation for Stage Ill of EMU, in particular the external representation of the Community (Annex II of the Presidency conclusions of the Vienna European Council of 11 and 12 December 1998) 153 Contents 7 H 3 - Council decision of 23 November 1998 concerning exchange rate matters relating to the CFA franc and the Comorian franc (98/683/EC) 158 H 4 - Council decision of 21 December 1998 concerning exchange rate matters relating to the Cape Verde escudo (98/7 44/EC) 161 H 5 - Council decision of 31 December 1998 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Principality of Monaco (1999/96/EC) 164 H 6 - Council decision of 3 1 December 1998 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Republic of