COMMISSION RECOMMENDATION of 19 April 1994 concerning the legal treatment of the ecu and of contracts denominated in ecu in view of the introduction of the single European currency (94/284/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community, and in particular the second indent of Article 155 thereof,

Whereas the introduction of this recommendation is pursuant to the aims set out in the Commission's White Paper Removing the legal obstacles to the use of the ecu (1), whose main orientations have been examined and approved by the European Parliament (2) and the Economic and Social Committee (3);

Whereas the Treaty establishing the European Community states in Article 109g that the currency composition of the ecu is frozen and that, from the start of the third stage, the value of the ecu shall be irrevocably fixed in accordance with Article 109 l (4); whereas Article 109 l (4) establishes that, at the starting date of the third stage, the Council shall, acting with the unanimity of the Member States participating in stage three, on a proposal from the Commission and after consulting the European Central Bank, adopt the conversion rates against the currencies of the Member States participating in stage three, at which the Ecu will become a currency in its own right;

Whereas Article 109 l (4) explains further that the decision regarding the conversion rates shall by itself not modify the external value of the ecu; whereas this means that one ecu in its current composition of a basket of component currencies will be exchanged, at the due time and in accordance with the procedures described in the Treaty, for one ecu in its new composition of a currency in its own right at 1: 1 conversion rate (rule of nominal continuity);

Whereas in stage two of the Economic and Monetary Union the development of principles of uniformity of treatment of obligations denominated in ecu depends on the will of the Member States to adopt a similar legal treatment of the ecu in their national legal systems;

Whereas Article 105 (1) of the Treaty defines price stability as the primary objective of the action of the European System of Central Banks; whereas the objective of price stability implies the application, in the legal system of the European Union, of the nominalistic principle, as set up by Article 109 l (4) of the Treaty which is well known in the Member States and constitutes a general principle of their monetary law, in the legal system of the European Union; whereas the Treaty establishing the European Community is a starting point for the elaboration of the first principles of European Monetary Law;

Whereas the European Commission has already stated in its White Paper Removing the legal obstacles to the use of the ecu that, in order to create principles of European Monetary Law, Member States should, as a minimum requirement grant by legislation to the ecu the legal status of a foreign currency; whereas the same White Paper asked each Member State to ensure that, in its own legal system the ecu is not treated worse than the currencies of other Member States; whereas it does not imply that the ecu is granted the status of 'parallel currency', which is not provided for in the Treaty on the European Union and has been rejected by the Member States during the negotiations,

HEREBY RECOMMENDS:

A.

TITLE 1 REMOVING LEGAL OBSTACLES TO THE USE OF THE ECU 1. that the Member States ensure that the ecu is given, by legislation, the legal status of a foreign currency;

2. that the Member States ensure that the ecu is not discriminated, in their own legal systems, against the other currencies to which the same legal status is granted.

TITLE 2 LEGAL PROTECTION OF THE ECU 3. that the Member States extend to the ecu adequate legal protection.

TITLE 3 CONTINUITY OF CONTRACTS DENOMINATED IN ECU 4. that all the parties in contracts denominated in ecu or in other similar denominations or referring to the ecu or to other similar denominations should comply with the provisions contained in the Annex hereto;

5. that in case of doubt references in contracts to the ecu should be interpreted as meaning the ecu as defined in Community legislation.

B. Member States are invited to inform the Commission within 12 months of the notification of this Recommendation of the texts of the main laws, regulations and administrative provisions which have been adopted with respect to Titles 1 and 2 of this Recommendation and inform the Commission of any further changes in this field.

C. This Recommendation is addressed to the Member States. Title 3 is also addressed to all contractual parties which contracted or are contracting any sort of legal obligation denominated in ecu.

Done at Brussels, 19 April 1994.

For the Commission

Henning CHRISTOPHERSEN

Vice-President

(1) Document SEC(92) 2472 final.

(2) Resolution A3-0296/93 of 27 October 1993 on removing the legal obstacles to the use of the ecu.

(3) ESC 236/94.

ANNEX

1. This Annex applies to all parties to contracts denominated in ecu or making reference to the ecu, whether they are natural or legal persons.

2. For the purposes of this Annex the following definitions apply:

- 'ecu' is the European currency unit to which Article 109 g of the Treaty establishing the European Community makes reference, both in its present composition as a basket of component currencies and in its future definition as a currency in its own right,

- 'other similar denominations' are ecu, écu, Ecu, ECU, E.C.U. as well as any other wording used to make reference to the ecu as unit of account of the European Communities or to the ecu as denominator of the exchange rate mechanism,

- 'ecu basket' is the ecu in its present composition as a basket of component currencies,

- 'ecu as single currency' is the ecu in its future composition as a currency in its own right.

3. In all contracts denominated in ecu or in other similar denominations or making reference to the ecu or to other similar denominations, the contractual parties are deemed to make reference to the ecu as defined in Article 109 g of the Treaty establishing the European Community.

4. At the due time and in accordance with the procedures described in Article 109 g and in Article 109 l (4) of the Treaty establishing the European Community, every obligation to pay a sum in the ecu basket will be converted into an obligation to pay the same sum in ecu as single currency.