Proposal for COUNCIL REGULATION amending Regulation (EC) No 974/98 on the introduction of the euro

(presented by the Commission)

EXPLANATORY MEMORANDUM

On 3 May 2000, the Commission adopted a proposal for a Council Decision in accordance with Article 122 (2) of the Treaty, proposing that Greece fulfils the necessary conditions for the adoption of the single currency and that the derogation of Greece is abrogated with effect from 1 January 2001.

In case of a positive decision, the Council will subsequently have to adopt the conversion rate between the euro and the drachma which will take effect from 1 January 2001 and will have to take the other measures necessary for the introduction of the euro in Greece.

I. General considerations

The envisaged date for the adoption of the euro in Greece falls into the transitional period (1 January 1999 until 31 December 2001) during which the former currencies of the participating Member States are sub-units of the euro. Euro banknotes and coins will be introduced as from 1 January 2002. The scope of the measures to be taken for the introduction of the euro in Greece depends to a large extent on whether the length of the transitional period remaining after 1 January 2001 can be considered to be sufficiently long for Greece. Given that Greece will benefit from the experience gained in the other countries with respect to the preparations for 2002, it can be assumed that Greece will be able to comply with the established deadline of the end of the transitional period and that no specific provisions in the legal framework of the euro are necessary.

Therefore, the two Council regulations which form part of the legal framework of the euro -Regulation (EC) N° 974/98 on the introduction of the euro [1] and Regulation (EC) N° 1103/97 on certain measures relating to the introduction of the euro [2] - can be fully applied to Greece. They need to be amended for the sole purpose of integrating Greece and its currency into the existing framework.

[1] OJ L 139, 11.5.1998, pp. 1-5

[2] OJ L 162, 19.6.1997, pp. 1-3

II. Comments on the articles

Article 1

In the first paragraph of this article, three definitions in Article 1 of Regulation (EC) N° 974/98 are amended: Greece is included in the definition of 'participating Member States'; the definition of 'conversion rate' is broadened to include conversion rates which are adopted after the start of the third stage of EMU on the basis of Article 123 (5) (ex 109 l (5); the definition of 'national currency units' is broadened to include units of former national currencies which are replaced by the euro after the start of the third stage.

The second paragraph provides for the substitution of the drachma by the euro as the currency of Greece as from 1 January 2001.

Article 2

The article fixes the date of entry into force of the regulation at 1 January 2001, ensuring that it will be applicable in conformity with the timing of the other Council acts relating to the adoption of the euro by Greece, i.e. the date of the abrogation of the derogation and the date of the entry into force of the conversion rate of the drachma.

2000/0137 (CNS)

Proposal for COUNCIL REGULATION amending Regulation (EC) No 974/98 on the introduction of the euro

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 123 (4), third sentence, and (5) thereof,

Having regard to the proposal from the Commission, [3]

[3] ...

Having regard to the opinion of the European Parliament, [4]

[4] ...

Having regard to the opinion of the European Central Bank, [5]

[5] ...

Whereas:

(1) Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro [6] provides for the substitution of the euro for the currencies of the Member States which fulfilled the necessary conditions for the adoption of the single currency at the time when the Community entered the third stage of Economic and Monetary Union; whereas this Regulation also includes rules which apply to the national currency units of these Member States during the transitional period ending on 31 December 2001, and rules on banknotes and coins;

[6] OJ L 139, 11.5.1998, pp. 1-5

(2) Decision of 3 May 1998 in accordance with Article 121 (4) of the Treaty (98/317/EC) stipulated that Greece did not fulfil the necessary conditions for the adoption of the single currency;

(3) Pursuant to Decision of 20 June 2000 in accordance with Article 122 (2) of the Treaty (00/.../EC) Greece now fulfils the necessary conditions and the derogation of Greece is abrogated with effect from 1 January 2001;

(4) The introduction of the euro in Greece requires the extension to Greece of the provisions on the introduction of the euro which are applicable in the Member States in which the euro was introduced when the Community entered the third stage of Economic and Monetary Union;

(5) For Member States whose currency is replaced by the euro after the date at which the Community entered the third stage of Economic and Monetary Union, the definition of "national currency units" should refer to the unit of the Member State's currency as it was defined immediately before the introduction of the euro in that Member State,

(6) The provisions on the transitional period apply as from 1 January 2001 in the case of Greece,

HAS ADOPTED THIS REGULATION:

Article 1

1. Article 1 of Regulation (EC) No 974/98 shall be amended as follows:

- in the first indent, the word "Greece" shall be inserted between the words "Germany" and "Spain",

- in the third indent, the words "or in accordance with the fifth paragraph of this article" shall be added at the end,

- in the fifth indent, the words "or, as the case may be, on the day before the euro is substituted for the currency of a Member State which adopts the euro at a later date" shall be added at the end.

2. The first sentence of Article 2 of Regulation (EC) No 974/98 shall be replaced by the following: "As from 1 January 1999 the currency of the participating Member States except Greece shall be the euro. As from 1 January 2001 the currency of Greece shall be the euro."

Article 2

This Regulation shall enter into force on 1 January 2001.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the Council

The President