EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 23 February 2006  
at the request of the Central Bank of Malta 
on a draft law on the adoption of the euro 
(CON/2006/10) 
 On 20 January 2006, the European Central Bank (E CB) received a request from the Central Bank of 
Malta for an opinion on the Euro Adoption Act  (bill on the adoption of the euro in the Republic of Malta 
(hereinafter the ‘draft law’)). 
The ECB’s competence to deliver an opinion is based on the first and second indents of Article 2(1) of 
Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by 
national authorities regarding draft legislative provisions
1, as the draft law relates to currency matters and 
means of payment. In accordance with  the first sentence of Article 17.5 of the Rules of Procedure of the 
European Central Bank, the Governing Council has adopted this opinion.  
The ECB welcomes this initiative to prepare early for the introduction of the euro, thus ensuring the 
timely implementation of the necessary transitional meas ures. The draft law intends to establish the legal 
framework and mechanics for the adoption of the euro  as the currency of Malta and for the replacement 
of the Maltese lira. It lays down (i) measures for the adoption of the euro; and (ii) the Minister of Finance’s powers with regard to the introduction of the euro. The purpose of the delegation to the 
Minister of Finance of the power to issue regulations  in this field is to shorten the procedure for the 
adoption of the euro and increase flexibility in updating the same regulations. 
 1. Preliminary terminological considerations  
1.1 In several parts of the draft law the term ‘unit’ is  added to the word ‘curre ncy’. In consistency with 
the terminology of Council Regulation (EC) No  974/98 of 3 May 1998 on the introduction of the 
euro
2, the term ‘unit’ should be reserved for addressing the unit of account, but otherwise the euro 
is to be adopted merely as the ‘currency’ of Malta3. 
                                                      
1  OJ L 189, 3.7.1998, p. 42. 
2  OJ L 139, 11.5.1998, p. 1.  
3  In addition to being the currency of  the ‘participating Member States’.  
 
2 1.2 There is no need to define the ‘euro’ in Article 3 of the draft law as Community law defines it. For 
this reason, the draft law, when  defining the ‘euro’, should mere ly refer to the definition in 
Regulation (EC) No 974/98.  
1.3 The definition of ‘legal instrument’ should be aligned with the definition in Council Regulation 
(EC) No 974/98, to include the words ‘legislative and statutory provisions’. There is the risk that 
the current definition in the draft law has a narrower effect.  
1.4 Although the ECB is consulted on the English la nguage version of the draft law only, in 
accordance with the Maltese Constitution the final text  of the law has to be adopted also in the 
Maltese language. The Maltese version prevails in case of conflict, unless expressly specified 
otherwise. The Maltese version of the law will th erefore need to refer to the single currency as 
‘euro’ in order to comply with Article 2 of Co uncil Regulation (EC) No 974/98 that provides that 
‘the currency of the participating Member States shal l be the euro’, and with the conclusions of the 
Madrid European Council of 16 December 1995 record ed in recital 2 of the same Regulation that: 
‘the name of the single currency must be the same  in all official languages of the European Union, 
taking into account the existence of different al phabets’. In addition, the European Council has 
concluded that the uniform name ‘euro’ of th e single currency is ‘the agreed and definitive 
interpretation of the relevant Treaty provisions’, and that pursuant to Article 5(3) of the Act 
concerning the conditions of accession4, Member States have to observe the principles and 
guidelines deriving from the declarations, resolutions  or other positions of the European Council at 
the time of their accession to the EU. 
 2. Comments on Part II ‘Measures for the Adoption of the Euro’ 
2.1 The ECB notes that in Article 4(i) and (ii) of the draft law the Minister will prescribe by order that 
euro banknotes and coins are legal tender, and that  the euro is the currency of Malta. In this 
context, the ECB refers to Article 249 of the Treaty which provides that a Community regulation 
‘shall be binding in its entirety and directly a pplicable in all Member States’. A Community 
regulation therefore does not need to be trans posed into the domestic law of Member States
5. If a 
Member State transposes a regulation into national law, the fact that the provision is a Community law provision may be obscured. In addition, if a Member State transposes a regulation in even a slightly different form, there is a risk  that its content will be altered.  
2.2 Considering that Community regulations and d ecisions on monetary matters apply directly in 
Malta, Article 4 of the draft law should not repeat Article 2 of Council Regulation (EC) No 974/98 
                                                     
 
4  OJ L 236, 23.9.2003, p. 34. 
5  As stated by the Court of Justice of the European Communities in Case 34-73 Fratelli Variola S.p.A. v Amministrazione 
italiana delle Finanze  [1973] ECR 981: ‘by virtue of the obligations ar ising from the Treaty and assumed on ratification, 
Member States are under a duty not to obs truct the direct applicability inherent in regulations and other rules of 
Community law. Strict compliance with this obligation is  an indispensable condition of simultaneous and uniform 
application of Community regulations throughout the Commu nity’. This position was also reiterated in Case 50-76 
Amsterdam Bulb BV v Produktschap voor Siergewassen [1977] ECR 137. 
 
3 and Article 106(1) of the Treaty, which, in addi tion, are clear and sufficiently comprehensive. 
Article 4 instead should merely refer to the a bovementioned Community provisions and the Statute 
of the European System of Central Banks and of  the European Central Bank as the legal basis for 
the adoption of the euro in Malta, and provide the Minister with the capacity to prescribe by order 
the discontinuation of the legal tender status of  the Maltese lira banknotes and coins (Article 15(1) 
of Council Regulation (EC) 974/98), to regulate th e dual circulation period until the withdrawal 
from circulation of national banknotes and coins (Article 15(2) of Council Regulation 
(EC) 974/98), as well as their late redemption (Ar ticle 16 of Council Regulation (EC) 974/98), and 
to adopt any necessary provision regarding the logistics of the cash changeover.  
2.3 For the same reason, Article 5 of the draft la w granting powers to the Minister in relation to 
Community provisions that have direct effect needs to be reconsidered, given that the application of the reference to euro in legal instruments and th e principle of continuity are already provided for 
in Article 6(2) of Council Regulation (EC) No  974/98 and Article 3 of Council Regulation (EC) 
No 1103/97 on certain provisions relating to the introduction of the euro
6 respectively. It should 
instead refer to these Community provisions. Any refere nce to ‘legal instrument s’ should be in line 
with the same definition in Council Regulation (EC) No 974/98. Hence phrases such as ‘law, 
contract or other legal instrument’ should be replaced by ‘legal instrument’. It is also important to 
refer to the euro as the currency of  Malta when necessary, since from the adoption date the euro 
will be legal tender in Malta.  
 3. Comments on Part III ‘Powers of the Minister’ 3.1 Article 6 of the draft law has the nature of an en abling provision, granting powers to the Minister to 
make regulations. In view of the obligation on authorities of Member States to consult the ECB on 
any draft legislative provision within its field of  competence in accordance with Council Decision 
(EC) No 98/415, all relevant significant subsidiary le gislation by virtue of Article 6 of the draft law 
will need to be submitted to the E CB for its opinion before it is adopted.  
3.2 Additionally, in Article 6(ii), the phrase ‘when the euro is not the currency unit of Malta’ should be 
substituted with ‘when the euro is not yet the currency of Malta’. It is clear that this provision refers 
to the dual pricing period in place before  the adoption of the euro, hence such an insertion would 
clarify the timing of its effect. Article 6(iii) shou ld either refer to Artic le 4 of Regulation (EC) 
No 1103/97, as this a directly applicable Community  provision, or Article 6(iii) of the draft law 
should be deleted.  
3.3 Moreover, in view of Malta’s Treaty and international obligati ons vis-à-vis the adoption of the euro 
in Article 7(1) of the draft law, the ECB proposes implementation  instead of compliance .  
                                                     
 
6  OJ L 162, 19.6.1997, p. 1. 
 
4  
This opinion will be published on the ECB’s website.  
  Done at Frankfurt am Main, 23 February 2006. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET