No C 100/6 Official Journal of the European Communities 20. 4. 90 
Amended proposal for a Council Decision on the attainment of progressive convergence of 
economic policies and performance during stage one of economic and monetary union (') 
COM(90) 82 final 
(Submitted by the Commission pursuant to Article 149(3) of the EEC Treaty on 2 March 1990) 
(90/C 100/04) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Articles 103 and 
145 thereof, 
Having regard to the proposal from the Commission, 
Having regard to the opinion of the European 
Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas the European Council, at its meeting in Madrid 
in June 1989, restated 'its determination progressively to 
achieve economic and monetary union as provided for in 
the Single Act'; whereas it decided that 'the first stage of 
the realization of economic and monetary union would 
begin on 1 July 1990'; whereas it stated that 'economic 
and monetary union must be seen in the perspective of 
the completion of the internal market and in the context 
of economic and social cohesion', and that 'its real­
ization would have to take account of the parallelism 
between economic and monetary aspects, respect the 
principle of "subsidiarity" and allow for the diversity of 
specific situations'; 
Whereas progress towards economic and monetary 
union requires a high degree of convergence of 
economic performances between Member States through 
greater compatibility and closer coordination of 
economic policies; whereas such strengthening of 
economic policy coordination also contributes to the 
achievement of Community objectives, in particular to 
convergence at a high level of economic performance in 
the framework of monetary stability; 
Whereas the achievement of the goals of the Single 
European Act, more especially the completion of the 
internal market, will require more effective policy coor­
dination to the extent that it will increase the degree of 
economic and financial integration and reinforce compe­tition and structural change and thus amplify the cross-
border effects of economic policies; 
Whereas, pursuant to Article 102a of the Treaty, 
Member States are to take account of the experience 
acquired in cooperation within the framework of the 
European Monetary System and in developing the ecu, 
and shall respect existing powers in this field; whereas 
the first stage of economic and monetary union should 
provide a sound basis for successful further development 
and sustainability; 
Whereas the strengthening of coordination should rely 
on the political will to develop further the consensus on 
the broad economic policy approach; whereas progress 
in this coordination process calls for flexibility, subsi­
diarity and precise and appropriate commitments in 
decision-making as well as for learning-by-doing; 
Whereas Council Decision 74/120/EEC of 18 February 
1974 on the attainment of a high degree of convergence 
of the economic policies of the Member States of the 
European Economic Community (2) and Council 
Directive 74/121/EEC of 18 February 1974 on stability, 
growth and full employment in the Community (3) shall 
be repealed, 
HAS ADOPTED THIS DECISION: 
Article 1 
In order to help to achieve sustained non-inflationary 
growth in the Community, together with a high level of 
employment and the degree of economic convergence 
necessary for the success of stage one of economic and 
monetary union, in the perspective of the completion of 
the internal market and in the context of the economic 
and social cohesion, the Council shall undertake multi­
lateral surveillance. In this context it shall apply the 
following principles; price stability, sound public finances 
and monetary conditions, sound overall balances of 
payments and open, competitive markets. It shall 
examine at least twice a year: 
(') OJ No C 283, 9. 11. 1989, p. 6. (2) OJ No L 63, 5. 3. 1974, p. 16. 
(3) OJ No L 63, 5. 3. 1974, p. 19. 
20. 4. 90 Official Journal of the European Communities No C 100/7 
— the economic conditions, prospects and policies in 
the Community and its Member States, 
— the compatibility of policies within Member States 
and in the Community at large, 
— the external economic environment and its inter­
action with the economy of the Community. 
Multilateral surveillance shall cover all aspects of 
economic policy in both the short-term and 
medium-term perspectives. 
Article 2 
The Council shall undertake multilateral surveillance in 
restricted sessions. It may authorize its President to make 
public the results of its deliberations. 
Through learning-by-doing, multilateral surveillance 
should increasingly result in compatible policies, with 
precise and appropriate commitments by the Member 
States. In this context, the Council may make economic 
policy suggestions and upon a proposal of the 
Commission, issue economic policy recommendations. 
Article 3 
Multilateral surveillance shall focus on macroeconomic, 
microeconomic and structural policies; this surveillance 
will be conducted by the Council on the basis of reports 
and analyses submitted by the Commission. These shall 
include: 
— indicators of economic performance and economic 
policies including monetary and budgetary policies, 
such as supply and demand trends, price and cost 
developments, employment, regional development, 
financial markets, public finance, monetary 
aggregates, interest rates, exchange rates and external 
imbalances, 
— regular reports on national economic conditions, 
prospects and policies, 
— periodic assessments of the economic situation of the 
Community and an annual report to review the 
economic outlook, the underlying economic policy 
orientations in the medium-term and their inter­
actions. 
A review of budgetary policies will take place possibly 
ahead of national budgetary planning, and will focus 
particularly on the size and financing of budget deficits, 
as well as the medium-term orientation of budgetary policy, the aim being to reduce excessively high deficits 
and avoid monetary financing. 
The Council's work on multilateral surveillance shall be 
prepared by the Monetary Committee, which for such 
purposes shall include, as experts, a representative of 
each Member State and of the Commission on the 
Economic Policy Committee. The chairmen of the 
Monetary Committee and the Economic Policy 
Committee shall attend the Council meetings at which 
surveillance is carried out. 
Article 4 
On a proposal from the Commission the annual 
economic report shall be adopted by the Council, after 
consulting the European Parliament and the Economic 
and Social Committee. 
Article 5 
When potential or actual economic developments in one 
or more Member States threaten the economic stability 
and cohesion of the Community, the Council shall 
undertake an examination of the economic situation. 
Such examination may result in the formulation of 
country-specific recommendations with a view to 
encouraging the necessary policy corrections. 
Article 6 
When events outside the Community threaten the 
economic stability and cohesion of the Community, 
consultation shall take place in the appropriate 
Community bodies to consider possible measures. 
Article 7 
In order to promote consistency between monetary and 
other economic policies, the chairman of the Committee 
of Governors of the central banks of the Member States 
of the European Community shall be invited to 
participate in the relevant Council meetings. 
Article 8 
The President of the Council and the Commission shall 
report regularly on the results of multilateral surveillance 
to the European Council and the European Parliament. 
In addition, the President of the Council may be invited 
to appear before the relevant Committee of the 
European Parliament when the Council has issued policy 
recommendations. 
Governments shall bring the results of the multilateral 
surveillance to the attention of their national parliaments 
so that it can be taken into account in national policy 
making. 
No C 100/8 Official Journal of the European Communities 20. 4. 90 
Article 9 Article 10 
On the basis of reports submitted by the Commission, Decision 74/120/EEC and Directive 74/121/EEC shall 
and after consultation of the Monetary Committee, the be repealed. 
Council shall periodically examine the progress made in 
multilateral surveillance through the application of this Articl 11 
Decision. This report shall also be transmitted to the 
European Parliament. This Decision is addressed to the Member States.