WRITTEN QUESTION No. 3578/97 by Klaus LUKAS to the Commission. The Euro and price transparency
Date: 1997-11-13
Institutions: European Parliament, LUKAS
Subjects: Economic and Monetary Union, European Monetary System, competition, coordination of EMU policies, economic convergence, economic development, economic policy, monetary policy, prices policy, single market

C 187/24

EN

Official Journal of the European Communities

16. 6. 98

The French authorities indicated that they had issued three circulars to Prefectures setting out how such claims
were to be processed. A team had also been set up within the Ministry of the Interior to ensure that any problems
with processing claims within the Prefectures could be resolved.

The Commission will continue to make representations, taking into account the undertakings given publicity by
members of the French Government to their counterparts in other Member States.

(98/C 187/37)

WRITTEN QUESTION E-3578/97

by Klaus Lukas (NI) to the Commission

(13 November 1997)

Subject: The euro and price transparency

The introduction of the euro will result in a marked increase in price transparency throughout Europe. Normally,
improvements in price transparency have an impact on competitiveness and on trade and production flows.

In  this  connection,  what  is  the  Commission(cid:146)s  assessment  of  the  introduction  of  the  euro  and  its  impact  on
employment?

How does the Commission intend to assess the requirement for a two-year membership of the EMS and what
fluctuation  margins  are  considered  (cid:145)normal(cid:146)  in  this  context?  (Can  the  Commission  provide  the  relevant
percentage fluctuations?)

Answer given by Mr de Silguy on behalf of the Commission

(23 January 1998)

The establishment of economic and monetary union (EMU) and the introduction of the euro will increase price
transparency in the internal market. For consumers and enterprises it will be easier to compare prices of goods
and  services  displayed  in  different  Member  States.  This  should  lead  to  an  increase  of  competition  between
producers and greatly facilitate trade inside the euro area.

The increase of competition, the reduction of transaction costs for cross border transactions and the creation of an
integrated  euro  area  capital  market  with  the  prospect  of  low  interest  rates  will  improve  the  conditions  for
investment in Europe. The single currency is therefore one of the main elements in the strategy of the Community
to improve European competitiveness and to create the necessary conditions for long-lasting, non-inflationary
growth and for employment creation.

As the establishment of EMU implies a single monetary and exchange rate policy inside the euro area, the link
between wage settlements and employment will become more stringent. National monetary or exchange rate
policies will no longer be able to accommodate wage and price developments which are not in line with the
macroeconomic framework in Europe.

Concerning the convergence criteria (cid:145)exchange rate stability(cid:146) it should be noted that Article 109 j (1) of the EC
Treaty refers to (cid:145)the observance of the normal fluctuation margins provided for by the exchange rate mechanism
of the European Monetary System, for at least two years, without devaluing against the currency of any other
Member State(cid:146).

In August 1993, the ministers and the central bank governors of the Member States decided to widen temporarily
the  obligatory  marginal  intervention  thresholds  of  the  participants  in  the  exchange  rate  mechanism  of  the
European monetary system (EMS) to – 15% around the bilateral central rates. At the same time, they reaffirmed
their  support  for  the  procedures  and  criteria  laid  down  in  the  EC  Treaty  with  respect  to  the  attainment  of  a
sufficient degree of convergence in order to allow the realisation of EMU.

The Commission will base its assessment of this criterion on these bases when recommending in March 1998 the
list of Member States which will have reached a high degree of sustainable convergence.