A4-0238/95

Resolution on the Commission Green Paper on the practical arrangements for the introduction of the single currency (COM(95)0333)

The European Parliament,

- having regard to the Commission Green Paper on the practical arrangements for the introduction of the single currency, COM(95)0333,

- having regard to the public hearings on these issues held on 17 and 18 July 1995 by its Subcommittee on Monetary Affairs,

- having regard to its resolutions of 27 October 1993 on EMS plus 1992 Programme: Lessons to be drawn for the implementation of EMU ((OJ C 315, 22.11.1993, p. 91.)) and on removing the legal obstacles to the use of the ecu ((OJ C 315, 22.11.1993, p. 94.)), its resolution of 15 December 1993 on international monetary cooperation within the framework of the easing of restrictions on capital markets ((OJ C 20, 24.1.1993, p. 74.)), its resolution of 6 May 1994 on the impact of exchange rate fluctuations on the Community's internal and external trade ((OJ C 205, 25.7.1994, p. 511.)), its resolution of 17 May 1995 on the functioning of the Treaty on European Union with a view to the 1996 Intergovernmental Conference - Implementation and development of the Union ((OJ C 151, 19.6.1995, p. 56.)), its resolution of 19 May 1995 on the introduction of the ecu as legal tender (Maas Group report) ((OJ C 151, 19.6.1995, p. 483.)) and its resolution of 14 June 1995 on the first annual report of the European Monetary Institute ((Minutes of that Sitting, Part II, Item 2.)),

- having regard to the motion for a resolution by Mr Garrigo Polledo on the final cost of introducing the single currency (B4-0558/95),

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy (A4-0238/95),

A. acknowledging the contribution of monetary union to the deepening of the European Union, the completion of the internal market, prosperity and employment and hence greater political and economic security; whereas failure to achieve monetary union could result in the dislocation of the internal market and the reintroduction of border controls as a means of protection against competitive devaluation; fearing that deferment of monetary union could delay any further enlargement to include the countries of Central and Eastern Europe,

B. stressing the fact that monetary union will depend not only on acceptance by the markets but also decisively on acceptance by the public,

C. whereas, although Article 109l of the EC Treaty lays down the beginning of the third stage of monetary union, the irrevocable adoption of exchange rates and the swift introduction of the single currency, the timescale and legal and organizational framework for the introduction of the single currency are not mentioned,

D. having regard to the economic and employment situation and the convergence programmes to be carried out by the Member States, which, viewed at present, make the entry into force of monetary union before 1 January 1999 doubtful,

E. having regard to the need to act in accordance with the Treaty and therefore to carry out convergence appraisals in 1996 and complete the preparatory work at the European Monetary Institute in good time in 1996, so that an early start to monetary union will be possible if a majority of the Member States fulfils the convergence criteria by then,

F. having regard to the lack of convergence between the Member States in terms of the real economy and social situations;

G. recognizing the need for the introduction of the single currency to be mapped out in a transparent, clear, unambiguous, comprehensive, credible, efficient, cost-effective plan which will not affect competition and will include binding key elements and deadlines,

H. having regard to the various scenarios for the introduction of the single currency, particularly the 'critical mass', 'big bang', 'delayed big bang', 'mounting wave' and 'demand-driven scenario' plans, which, with the exception of the 'big bang' and 'critical mass' plans, are at variance with the Treaty, while the 'big bang' plan is not technically feasible,

1. Welcomes the fact that the presentation of the Commission Green Paper has given a fresh impetus to the preparations for the third stage and the implementation thereof, and insists on a comprehensive, clear decision, in accord with the Treaty, being taken at the 1995 European Summit in Madrid regarding the timescale and key elements for the transition to the third stage;

2. Insists on being involved fully and in good time by the Commission, the Council and the EMI in the preparatory process, and points out that transparency regarding the preparations is more essential than ever in order to promote acceptance by the public and by the markets; also calls on the Commission to take full account of the need for democratic accountability during the transition to the third stage and the role of the European Parliament in this process, particularly within the scope of existing Treaty provisions, such as those relating to the replacement of Protocols 5 and 6 annexed to the Treaty;

3. Rejects any attempts by Member States to change the timetable set out in the Treaty on European Union and insists that it be adhered to; warns the monetary authorities against using the technical, legal and organizational problems of the transition to the single currency, which have regrettably not been tackled as soon as they should, and have also been underestimated, as leverage to postpone monetary union; urges them to contribute to currency stability by adopting a brisk, decisive and constructive stance and making extremely painstaking and detailed preparations and to put an end to the confusion and uncertainties which cloud the acceptance and credibility of Europe's commitment;

4. Stresses the potentially catastrophic effect on the internal market if monetary union were postponed or called into question;

5. Calls for measures to ensure that as many Member States as possible, while complying strictly with the convergence criteria, are able to participate and therefore calls for more measures to create jobs, so that monetary union and the preparations leading up to it engender not fragmentation but closer integration; also wishes such measures to contribute just as much to the strict fulfilment of the convergence criteria as to employment-generating growth, increased trade and economic and social cohesion;

6. Calls for a clear, unambiguous, efficient, cost-effective, irreversible and credible transition plan that is so simple and transparent that every citizen will grasp how the currency change-over will work, that it is not a currency reform, but a neutral change-over of prices, wages, incomes, etc., affecting neither their savings nor other income or assets, and that their purchasing power will be safeguarded;

7. Insists that the plan must not result in distortion of competition or concentration of financial institutions, both of which would run counter to Articles 85 and 86 of the Treaty;

8. Recognizes the need for the single currency to be introduced in three phases (A, B and C), but calls for a swift transition:

(a) Considers it essential for phase A to begin on 1 January 1998, so that the European System of Central Banks may operate properly from 1 January 1999 at the latest;

(b) Insists that monetary union must commence on 1 January 1999 with the irrevocable fixing of exchange rates, that the single currency must become the legal tender in the European Union in phase B and that the national currencies, which will remain in circulation, must then be deemed merely different expressions of the single European currency which will retain their function as legal tender in their respective Member States until they are physically replaced by single currency bank notes and coins;

(c) Considers it essential for central bank and inter-bank operations to be conducted in the single currency from the start of phase B; all financial institutions should transact their business in the single currency, in the interests of leaving competition unaffected; in order to do so, payment conversion systems must be set up by the national central banks, free of charge, for small and medium-sized banks; in order to avoid problems at the intersection between old and new currencies, it is essential to organize the change-over in such a way as to maintain the cohesion of the system, to which end an unambiguous, universally binding plan must be drawn up;

(d) Calls for phase B to be reduced to no more than two years;

(e) Calls for phase C to be reduced to the minimum period necessary for the actual changeover between denominations, i.e. no more than a few weeks;

(f) Calls for transitional periods for specific target groups and users of banknotes and, in particular, coins, which will enable them to continue using national banknotes and coins for a further two to three months after the period laid down in (e), with simultaneous conversion rights;

9. Calls for measures to prevent the risk of speculative disruption during the individual phases of the transition and considers that the clear fulfilment of the convergence criteria by as many Member States as possible offers the best means of convincing the markets of the stability, credibility and benefit of monetary union; sees, in particular, the risk of phase A, and hence monetary union, failing if insufficient precautionary stabilization measures are taken before and during phase A;

10. Calls for a timely regulation on the single currency and for the timely adoption, by the Member States and the Union, of all the requisite legal and technical measures concerning the introduction of the single currency, so that all the technical and legal measures for the change-over, for example relating to the rounding of converted sums and the legal status of long-term loans, are in place, thereby ensuring the requisite legal certainty; insists on provisions in the following areas, in particular:

(a) a legal definition of the single currency in relation to the national currencies,

(b) the introduction of the single currency as the currency of the participating Member States and the European Union, so that all legal obstacles to its use in business transactions are removed,

(c) the introduction of the single currency as a unit of account, so that all assets and liabilities in national currencies have an equivalent in the single currency,

(d) the introduction of the single currency as legal tender,

(e) the definition and legal status of the national currencies;

11. Calls for prices to be displayed from the beginning of phase B in both the European currency and the relevant national currency, so that price comparability and market transparency may be established, creeping price increases ruled out and a new price awareness fostered; also calls for details concerning pay and invoice amounts to be shown in the single and national currency;

12. Calls on governments, in the run-up to the single currency, to assume a vanguard role in the public sector and in the important area of public administration; wishes to see the whole of any new debt entered into by the Member States' public sectors, both short-term and long-term loans, from the third stage onwards denominated in the single currency;

13. Calls on the European Summit in Madrid to decide on a name for the single currency which is the same in all European languages, if a new name has to be established for political reasons; considers that the production and placing in circulation of banknotes and coins must be carefully planned; stresses the need for professional users of cash, particularly manufacturers of cash-operated machines, small businesses and retailers, to be informed in good time about the characteristics of new notes and coins;

14. Calls, in the general political and economic interest, for a common European Monetary System to continue in the third stage, with the single currency anchoring Union currencies outside EMU, for those countries which do not participate in EMU from the outset, and advocates mechanisms which, in the context of defined currency bands, prevent unilateral re- and devaluations, provide a financing instrument, make appropriate modifications to the intervention mechanism and help prepare for and support full participation by all the Member States at a later date;

15. Calls, in connection with the Intergovernmental Conference in 1996, for a Union-wide commitment by the European Summit to move towards ever-closer union and for a proper balance between monetary union and economic union; calls in this regard for the development of new policy instruments and institutional structures to help secure this balance;

16. Calls for a Union-wide information campaign, entitled 'One Europe - one currency', which must start in 1996, to overcome problems of acceptance; calls for forums of all those involved to be set up at Union, national and regional level, so that all the problems in the pipeline are brought into the open and solutions gain a high degree of acceptance, and for a 'European currency' education and training programme, to be carried out jointly by the Member States and the European Union;

17. Instructs its President to forward this resolution to the Council, the Commission, the EMI, the governors of the central banks, and the governments and parliaments of the Member States.