30.12.93 OfficialJournaloftheEuropeanCommunities NoC352/3
edwithaminimumofredtape.Asuccessfuloutcome
wouldpromoteeconomicgrowthandcompetitiveness
andcouldhelptocombatunemployment .3.4.Thereiseveryreasontobelievethatthescheme
willbearealsuccessprovidedthatadequateinfor­
mationismadeavailableandtheschemeisimplement­
DoneatBrussels,20October1993.
TheChairman
oftheEconomicandSocialCommittee
SusanneTIEMANN
OpinionontheanalysisofpoliciestobepursuedintheCommunityduringthetransitional
stageofEMU:secondarylegislation
(93/C352/02)
On23March1993theEconomicandSocialCommittee,actingunderthefourthparagraph
ofArticle20ofitsRulesofProcedure,decidedtodrawupanOpinionon:Theanalysisof
policiestobepursuedintheCommunityduringthetransitionalstageofEMU.
Byletterdated1October1993,theCommissionsenttheCommittee,foritsmembers'
information ,anumberofproposalsrelatingtosecondarylegislationfortheimplementation
ofthesecondstageofEMU,asprovidedforintheTreatyonEuropeanUnion(Maastricht
Treaty).ThisOpinionthereforedealswiththesecondarylegislation,andtheCommitteewill
issueanadditionalOpinionontheeconomicandmonetaryconsiderations .
TheSectionforEconomic,FinancialandMonetaryQuestions,whichwasresponsiblefor
preparingtheCommittee'sworkonthesubject,adopteditsOpinionon5October1993.
TheRapporteurwasMrMeyer-Horn .
Atits309thPlenarySession(meetingof20October1993)theEconomicandSocialCommittee
adoptedthefollowingOpinionbyalargemajoritywithtwoabstentions .
1.Preliminarycomments ThedraftproposalscontainedintheCommissionCom­
municationof22July1993[COM(93)371final—SYN
466/4671are:
ThisOpiniondealswiththeCommission's-—initially
informal—proposalsforsecondarylegislation
implementingthesecondstageofEconomicandMonet­
aryUnion.On22June1993theEuropeanCouncil
askedtheCommissiontosubmitproposals.Untilthe
TreatyonEuropeanUnionentersintoforce,thelegis­
lationbasedonitcannotbeformallyproposedand
adopted.aRegulationaimedatspecifyingtheprohibition
(Article104oftheTreaty)ofpublicsectoraccess
toCentralBankcredit,anddefining'overdraft
facilitiesoranyothertypeofcreditfacility','public
undertakings'etc,
—aRegulationaimedatspecifyingtheprohibition
(Article104oftheTreaty)ofprivilegedaccessfor
thepublicsectortofinancialinstitutions,ThenecessarydiscussionswiththeCommunitybodies
involved(theEuropeanParliament,theCommitteeof
CentralBankGovernors,theMonetaryCommittee )
have,however,alreadystartedinformally,inorderto
acceleratethesubsequentofficialprocedures,toensure
thatthelegislationcanbeadoptedassoonasthe
MaastrichtTreatyentersintoforce,andbefore1Janua­
ry1994.—aRegulationontheapplicationoftheexcessive
deficitprocedure [Article104c(14)oftheTreaty]
inaccordancewiththeProtocol,andlayingdown
detailedrulesanddefinitions,includingthedefi­
nitionof'publicdebt',

NoC352/4 OfficialJournaloftheEuropeanCommunities 30.12.93
containedinArticles3,4,and5oftheproposal,do
not,ontheotherhand,appearabsolutelynecessary.—aDecisiononthestatisticaldatafortheestablish­
mentofthekeyforthefinancialresourcesofthe
EuropeanMonetaryInstitute(EMI)(Article16.2of
theEMIStatute).
2.Generalcomments3.4.TheCentralBanksmaintainaccountsintheir
capacityasfiscalagentsforgovernments ,arolespecifi­
callyenshrinedinArticle104(1)oftheTreaty.Inthe
courseofdailycredittransfers,netdebtorpositionscan
arisewhicharetantamounttoCentralBankloansto
thepublicsector.TheCommissionfeelsthatthevery
short-termandtechnicalnatureoftheseloansmeans
thattheywillhavepracticallynoeffectontheCentral
Banks'independentmonetarypolicy.However,inorder
topreventArticle104beingcircumvented ,theCom­
missionproposesthatloansarisingfromcredittransfers
beconsideredprohibitedcreditfacilitiesiftheyare
extendedovernight(Article3).Isthisappropriate ?The
CommissionitselfpointsoutthatArticle104isnot
intendedtohindertheCentralBanks'managementof
paymentstransactions .TheEconomicandSocialCommitteeregretsthat
decisionsonsecondarylegislationarebeingdrawnup
inthisinformalwayandinsuchhaste.Thedecisions
ondefinitionsare,insomecases,ofgreatimportance
fornationalandregionalauthorities,forthebanking
system,fortheCentralBanksandforpublic-sector
undertakings .Thedefinitions,demarcationlinesand
proceduresmustthereforebediscussedatlengthwith
allconcernedanddrawnupwithgreatclarityand
attentiontodraftingdetail.Insomecases,theExplana­
toryMemorandum declaresmatterscompatibleornon­
compatiblewiththeArticlescontainingthedefinitions,
withoutthereferencebeingcoveredintheArticles
themselves .
TheEconomicandSocialCommitteewouldliketo
makeanumberofcommentsasitscontribution tothe
'informaldiscussion'ofthefourproposalsforsecond­
arylaw.3.5.Thesameconsiderationappliestochequecollec­
tion.TheCentralBanksometimescreditschequesin
favourofthegovernmenttothegovernment'saccounts
beforetheaccountsoftheprivatesectordraweesare
debited.TheCommission seesthisdifferenceinvalue
datesasconstitutingloansincompatiblewithArticle
104.Althoughtheeffectsofthisarerelativelyinsignifi­
cant,theCommissionfeelsthatthereisstillaneedfor
regulation.Article4stipulatesthatdifferencesinvalue
dateswillnotbeheldtoconstituteprohibitedoverdraft
facilitiesonlyifthetimelagsinvolvedarenormalfor
chequeclearanceinthecountryinquestion.Issecond­
arylegislationreallyneededhere?3.CommentsonthedraftRegulationspecifyingdefi­
nitionsfortheapplicationoftheprohibitionon
directCentralBankfinancingofthepublicsector
[Articles104and104b(l)oftheTreaty]
3.6.Coinsissuedbygovernmentsandcirculatedby
theCentralBanksarealsoseenasgivingrisetoover­
draftfacilitiesrequiringregulation .InsomeMember
StatesthevalueofcoinsiscreditedtotheTreasury
accountsbeforeallthecoinshavegoneintocirculation;
theTreasuryaccountsarenotdebited,however,when
reflowstotheCentralBankoccur.3.1.Article1andtheExplanatoryMemorandum
statethattheCentralBanks'creditfacilitiestothe
publicsectormustberepaidorconvertedintofixed­
maturitydebtby1January1994.Claimsacquired
before1January1994donotcountascreditfacilities.
ThedraftRegulationthereforeconfinesArticle104of
theECTreatytoborrowingscontractedafter1January
1994.Inviewofthelargepublic-sectordebtofsome
MemberStates,itwouldberealisticnottorequireall
claimsoutstandingattheendof1993toberepaid,but
rathertoallowareasonableperiod(e.g.10-15years)
fortheirconversionintodebtinstruments .ForpracticalreasonstheCommission proposes
(Article5)that,ingeneral,theCentralBanks'stocksof
coinsshouldnotberegardedasprohibitedcreditfacili­
tiesprovidedthattheyconstitutelessthan10%oftotal
coinsincirculation .
3.2.Articles2and5ofthedraftRegulationprovide
theusefulclarificationthatopen-marketoperationsin
governmentsecuritiesintheframeworkoftheCentral
Banks'monetarypolicy,andstandbycreditswiththe
IMFandtheEMS,donotfallunderthecreditfacilities
prohibitionlaiddownbyArticle104oftheTreaty.4.CommentsonthedraftRegulationspecifyingdefi­
nitionsfortheapplicationoftheprohibitionof
privilegedaccessofthepublicsectortofinancial
institutions (Article104a)
TheExplanatoryMemorandum statesthattheprohib­
itiononprivilegedpublicsectoraccesstofinancial
institutionsisintendedtosubmitthepublicauthorities3.3.TherulesgoverningtheroleoftheCentral
Banksasfiscalagentsandinthecirculationofcoins,

30.12.93 OfficialJournaloftheEuropeanCommunities NoC352/5
tomarketdiscipline.Thisinturnisintendedtohelp
preventexcessivebudgetdeficits.Thisisbynomeans
certain,however,giventhelowinterest-ratesensitivity
ofthepublicsector.104a,asanyloangrantedbyapublicly-owned financial
institutiontothepublicsector,incompetitionwith
private-sectorbanks,wouldthengiverisetosuspicion
ofprivilegedaccess.
Theenactmentoftheprohibitiononprivilegedaccess
isofgreatsignificanceforthewholebankingsystem.
Itis,therefore,regrettablethatimportantproblems
arediscussedtoobriefly,andonlyintheExplanatory
Memorandum ;theRegulationwillthereforeonlybe
partiallybindingtherefore.ThiswouldeffectivelyendangertheentireStructural
andRegionalPolicyoftheCommunityandtheMember
States,asthebulkoffundingischannelledtothelocal
authoritiesandpublic-sectorbodiesviaspecialized—
andusuallypublicly-owned —financialinstitutions .
ThisalsoappliestotheEuropeanInvestmentBank's
globalloansandthechannellingofsupportprogramme
fundsviacreditinstitutions .Itmustbemadeclear
thereforethatsuchcasesdonotconstituteprivileged
accesswithinthemeaningofArticle104a.Itcouldat
thesametimebestipulatedthatthegrantingofloans
andchannellingoffundstothepublicsectormustnot
breachcompetitionandprudentialrules.Itcouldalso
bespecificallystatedthattheproposedRegulationdoes
notprejudiceArticles90and92oftheTreaty.Ontheotherhand,theoperationofthefinancialsys­
tem,andinparticularpublic-sectorfinancialinsti­
tutions,shouldnotbehinderedbythedefinitions (pub­
licundertakings ,financialinstitutions,privileged
access).Thismightbetheresult,however.
4.1.TheExplanatoryMemorandum toArticle1
excludesfromthebanonprivilegedaccess:
—certainfinancialinstitutions'obligationtofinance
socialhousingonspecialconditions;
—interestsubsidiesorothertransfersfromonearea
ofthepublicsectortoanother.4.2.Article2statesthatprudentialmeasuresleading
toprivilegedaccessarecompatiblewithArticle104
oftheTreaty.Thiswouldappearjustified,giventhe
prudentialtreatmentof(normallylow-risk)claimson
thepublicsector.ECruleswhichforthesamereason
giverisetoprivilegedtreatmentofpublicdebtinstru­
ments,andthusconstituteprivilegedaccess,arealso
allowed(e.g.lowerweightinginthecalculationof
solvencyratios,diversification requirementsforUCITS
investmentfunds). Thisisreasonableaswearedealingwithquestionsof
competitionand/orprudentialsupervision,ratherthan
potentialobstaclestoeffortstoachieveimproved
budgetarydisciplinewhichmightcompromisestability­
orientatedmonetarypolicy.Itisnotclear,however,
fromthewordingofArticle1thattheabove,referred
tointheExplanatoryMemorandum ,arecompatible
withArticle104aoftheTreaty.Thereason,basedonmonetarypolicy,givenforthe
requirementthatfinancialinstitutionsholdpublic-sec­
tordebtinstruments [fifthrecital,andExplanatory
Memorandum toArticle3(2)]isquiteadifferentmatter.
Theminimumreserverequirementsarequoted,under
whichallcreditinstitutionshavetoholdpartoftheir
depositswiththeCentralBankasminimumreserves(*).
Themaintenance ofsuchminimumreservescannotbe
construedasprivilegedaccess.AnotherquestionnotaddressedintheExplanatory
Memorandum isthegrantingofcreditfacilitieson
specialconditionstolocalauthoritiesbytheirown
financialinstitutions,e.g.localcreditinstitutions .
UnderthedefinitionproposedinArticle3,thiswould
beclassifiedasprivileged (andthereforeprohibited)
public-sectoraccesstofinancialinstitutions,although
public-sectorbudgetdisciplinewouldinnowaybe
affected.Whetherafinancialinstitutionincurshigher
loancostsforitsowners,andinreturnpayshigher
dividends,orwhetheritkeepsloancostsdownand
makessmallerprofitshasnobearingonbudgetary
discipline.Fundsaremerelymovedaroundthepublic
sectorwithoutcreatingcreditforthepublicsector
whichwouldaffectmonetarypolicy.InsomeMemberStates,however,financialinstitutions
arealsorequiredtomaintainholdingsofpublic-sector
debtinstrumentsand/orcertificateswhichthegovern­
mentrequirestheCentralBanktoissue,whichareat
leastlikereserves.Suchcompulsoryholdingsundoubt­
edlyconstituteprivilegedaccess,astheyamounttothe
compulsory,long-termplacingofpublic-sectordebt
instrumentswithfinancialinstitutions .Thisformof
Thus,itisdebatablewhetherprivilegedaccessshould
bedefinedsothatloansbypubliclyownedcreditinsti­
tutionsandbankstothepublicsectorfallunderArticle (l)OJNoC129,10.5.1993.

NoC352/6 30,12.93 OfficialJournaloftheEuropeanCommunities
privilegedaccesshasclearlybeenusedtofinance
governmentbudgetdeficitsviatheCentralBank,which
willinfuturebeillegal(').OneoftheProtocolstotheTreatyonEuropeanUnion
laysdownthereferencevaluesforthebudgetpolicy
convergencecriteria,aswellasanumberofdefinitions
andproceduresforthetransmissionofstatisticaldata.
InaccordancewithArticle104c(4),theproposal
containsfurtherdetails,includingmoredetaileddefi­
nitionswithreferencetotheEuropeanSystemofInte­
gratedEconomicAccounts (ESA)oftheStatistical
OfficeoftheEuropeanCommunities (SOEC).4,3.TheExplanatoryMemorandum 'scommentson
Article3(3)areunclear;itisstatedthattheCentral
Banks'monetarypolicyshouldnotbebasedexclusively
onpublic-sectordebtinstruments,asiscustomarywith
loansattheLombardrate,loanswithsecurities
depositedascollateralandopenmarketoperations .
TheCentralBanksdousethesetransactionstoinflu­
encethemoneysupply,eitherwithdrawingliquidity
fromtheeconomybytheissueorreturnofsecurities,
ormakingadditionalliquidityavailablebytheredemp­
tionofsecurities.Thismerelyentailsthetemporary
changeofownershipofpublic-sectordebtinstruments,
whichwerepreviouslyplacedandwhichwerenot
issuedspecificallyforthatpurpose.Thisdoesnotcon­
stituteprivilegedaccessofbudgetaryrelevance.The
exclusiveuseofpublic-sectordebtinstrumentsformon­
etarypolicydoeshoweverraisecompetitionandpru­
dentialissues.5.1.InArticle1(1),governmentissub-dividedinto:
centralgovernment,localgovernmentandsocialsecur­
ityfunds,asdefinedintheESA.ESAdefinitionS62,
usedbytheSOECandreferredtointheAnnextothe
proposal,definesthelocalgovernmentsub-sectoras
'thosetypesofpublicadministration whosecompetence
extendstoonlypartoftheeconomicterritory'.Itis
notclearwhetherregionalauthoritiesliketheGerman
'Lander'ortheBelgian'communautes/gemeenschapp­
en'arecoveredbythisdefinition.
5.2.Article4oftheproposalrequirestheMember
StatestonotifytheCommissionoftheirplannedand
actualgovernmentdeficitsandlevelsofgovernment
debtbefore1Februaryand1Julyofeachyear.They
arealsorequiredtoprovidetheCommissionwith'any
relevantsupplementary information'asitbecomes
available.Theseinterimreportscouldberestrictedto
datarelevanttotheassessmentoftrendsinthebudget
deficit,governmentdebt,therelationshipbetweenthe
deficitandpublicinvestmentandthemedium-term
economicsituation.4.4.Article4excludespublic-sectorpostalfinancial
servicesfromthedefinitionoffinancialinstitutions
withinthemeaningofArticle104a.Itisconcededin
theExplanatoryMemorandum thatpostalfinancial
servicesareobligedtomakefundsavailabletothe
publicsector.Thiswouldclearlyconstituteprivileged
accessofbudgetaryrelevance,asbycreatingcredit,
postalfinancialservicescandirectlycontributetothe
financingofpublic-sectordeficits.Whetherornotpost­
alfinancialservicesaresufficientlyseparatefrom
governmentmakeslittledifferencetotheirbudgetary
relevancewithinthemeaningofArticle104a,asthe
publicsectorhasprivilegedaccesstothem,irrespective
oftheirlegalororganizational form.Article4(1)and
(2)shouldthereforebeamendedtostatethatpostal
financialservicesareindeedfinancialinstitutionswithin
themeaningofArticle104a.TherequirementthatMemberStatesreportplanned
levelsofgovernmentdebtgoesbeyondtherequirements
oftheProtocolannexedtotheTreaty.Thisisjustified
however,asitwillenabletheCommission ,inassessing
thebudgetaryconvergencecriteriainaccordancewith
Article104c(2),toconsiderwhethertheratioof
governmentdebttoGDP'issufficientlydiminishing
andapproachingthereferencevalueatasatisfactory
pace'.
5.3.Article6requirestheMemberStatestoinform
theCommissionofpaymentsmadeorforeseeablein
fulfilmentofgovernmentguaranteesorarisingfrom
thedebtsofothersectorstakenoverbythegovernment .
Thisrequirementisalsowarranted,asitenablesthe
Commission toassesstheriskofanexcessivedeficit.5.CommentsonthedraftRegulationontheappli­
cationoftheprovisionsoftheProtocolonthe
excessivedeficitprocedure [Article104c(6)and
(14)]
Article109e(4)requirestheMemberStatestoendeav­
ourtoavoidexcessivegovernmentdeficits.(Fromthe
thirdstageonwardsthisbecomesaTreatyobligation.)
Article104c(2)chargestheCommissiontoexamine
compliancewiththesearrangementsandmonitorthe
developmentofthebudgetarysituationandthestock
ofgovernmentdebtintheMemberStates.6.CommentsonthedraftDecisionontheestablish­
mentofthekeyforthefinancialresourcesofthe
EuropeanMonetaryInstitute[Article16(1)and(2)
oftheProtocolontheStatuteoftheEMI]
Theadministrative expensesoftheEMIaretobe
fundedbytheMemberStatesinaccordancewiththe (')Referredtoabove:seepoints1.2,2.4,3.5and3.5,1to3.5.4.

30,12.93 OfficialJournaloftheEuropeanCommunities NoC352/7
keylaiddowninArticle29(1)oftheStatuteofthe
EuropeanSystemofCentralBanks(ESCB)andthe
EuropeanCentralBank(ECB).Theproposaldoesnot
therefore,asthetitlesuggests,concernthekeyitself,
butratherthestatisticaldataonpopulation,GDPat
marketprices(GDPmp)andthemethodofcalculation
neededforthekey.
ThedefinitionsusedarethoseoftheESAandArticle
2ofCouncilDirective89/130EEC.Thedraftproposal
thereforecontainslittlethatisnew.Moreweightis
giventothestatisticaldatafortheESCBandECB
key,whichisthentobeappliedtotheMemberStates'
contributions totheEMI'scapital,theweightingof
votes,thepoolingofforeignexchangereservesand
thedistributionofprofitsandlosses.Althoughnothistoricallyaccurate,thisdevicewould
appearasuitablebasisforcalculatingGermany'scon­
tributiontothefinancingoftheEMI.
6,2,ThekeyforindividualMemberStates'contri­
butions(Article8)istobethearithmeticmeanof
thesharesofthecorresponding MemberStateinthe
populationandGDPmpoftheCommunity,calculated
onthebasisofthefive-yearaverage(1987-1991)
(Articles4and7).TheGDPmpdataaretobeconverted
intoecuattheaverageexchangeratesofalltheworking
daysofeachyear,aspublishedinthe'Ceditionof
theOfficialJournal.Theaccuracyofthismethodof
calculationisreflectedinthefactthattheweightingof
thenationalCentralBanksinthekeyistobecalculated
tofourdecimalplaces(Article9),
Asthekeyistobeapplicableforthe'entirelifetimeof
theEMIandwillbecalculatedonceonly,theCom­
missionandEurostatmustensurethattheGDPmpdata
areinfactcompiledinaccordancewiththeuniform
procedure (Article2)laiddowninCouncilDirective
89/130EECandthattheeconomicaggregatecalcu­
lationsarecompatible .6.1.GermanGDPmpfortheperiodbeforeunifi­
cationistobecalculatedasfollows(Article6):notional
GDPmpfiguresfortheformerGDRwillbeaddedto
thoseoftheoldFederalRepublicfortheperiod1987­
1990onthebasisoftherespective1991GDPsharesof
theoldandnew'Lander'.
DoneatBrussels,20October1993.
TheChairman
oftheEconomicandSocialCommittee
SusanneTIEMANN