Opinion of the European Monetary Institute at the request of the Austrian Ministry of Justice under Article 109f (6) of the Treaty establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI (the “Statute”) on a draft federal law changing certain provisions in the Austrian legislation as ancillary measures for the introduction of the Euro - Erstes Euro-JustizBegleitgesetz (the “Draft Law”) (CON/98/01)
Date: 1998-02-13
Institutions: European Monetary Institute
Subjects: Austria, balance sheet, central bank, euro, interest, money, share

13 February 1998

OPINION OF THE EUROPEAN MONETARY INSTITUTE

at the request of the Austrian Ministry of Justice under Article 109f (6) of the Treaty
establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the

EMI (the “Statute”) on a draft federal law changing certain provisions in the Austrian

legislation as  ancillary measures for the introduction of the Euro - Erstes Euro-Justiz-

Begleitgesetz (the “Draft Law”)

CON/98/01

1.

On  16  January  1998  the  EMI  received  a  request  from  the  Austrian  Ministry  of  Justice  for  an

opinion on the Draft Law.

2.

The EMI’s competence to deliver an opinion is based on Article 1.1,  first indent, of the Council

Decision of 22 November 1993 (93/717/EC) on the consultation of the EMI by the authorities of

the  Member  States  on  draft  legislative  provisions  as  the  Draft  Law  contains  provisions

concerning, amongst other things, currency legislation and the status of the euro.

3.

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4.

The Draft Law contains the following provisions as  ancillary measures for  the  introduction  of

the euro:

Austrian  entities  will  be  able  to  draw  up  their  balance  sheets  also  in  euro  as  from

1 January 1999.

Corporations  will  be  able  to  be  established  in  euro  and  notional  no  par  value  shares  are

introduced.

Comparable interest rates are provided for in the case of laws, regulations and contracts making

reference to an interest rate which will cease to exist in Stage Three.

In  long-term  contracts  between  consumers  and  entities,  a  statement  is  to  be  drawn  up  of  all

relevant amounts, in euro and in the Austrian schilling denomination, and consumers are entitled

to be informed about all relevant amounts, in euro, in a timely fashion.

Procedural rules aim at enabling a transparent transition to the single currency.

The EMI welcomes the comprehensive approach which has been chosen by the Draft Law. Not

only  does  the  Draft  Law  provide  for  technical  adaptations  like  the  replacement  of  schilling

amounts  by  euro  amounts,  but  it  also  aims  at  reflecting  the  Council  Regulation  on  certain

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provisions relating to the introduction of the euro (97/1103/EC) and the Draft Regulation on the

introduction  of  the  euro.  In  this  respect  the  Draft  Law  addresses  issues  like  continuity  of

contracts,  the  replacement  of  the  Austrian  schilling  by  the  euro,  rounding,  the  principle  of  “no

compulsion, no prohibition” as well as the replacement of reference interest rates.

5.

The EMI notes that the discount rate currently announced by the Oesterreichische Nationalbank

will  be  replaced  in  Stage  Three  by  an  interest  rate  to  be  determined  by  a  regulation  of  the

Austrian Government. In determining this interest rate the Austrian Government has to take into

account  the  monetary  policy  instruments  of  the  ECB  in  general  and  the  deposit  facility  in

particular. In the explanatory memorandum to the Draft Law it is stated that Section 1, Article 1

of the Draft Law is to be understood as an interim solution since a final decision on the ECB’s

monetary policy instruments has not yet been taken, and that the interest rate determined by the

Austrian  Government  shall  be  replaced  in  the  future  by  a  reference  to  a  monetary  policy

instrument  of  the  ECB.  As  regards  the  omission  of  reference  rates  in  contracts,  Section  I,

Article 2 of the Draft Law states that “such interest rate shall  be  replaced  by  the  most  closely

related interest rate”.

6.

The EMI notes that the Draft Law does not contain a specific rounding provision but makes, in

the explanatory memorandum, reference to Articles 4 and 5 of the Council Regulation on certain

provisions relating to the introduction of the euro.

7.

As  regards  long-term  contracts  between  consumers  and  entities,  the  EMI  notes  that  the  Draft

Law determines that all relevant amounts have to be shown in Austrian schillings and in euro.

8 .

The EMI welcomes  the  fact  that  in  its  explanatory  memorandum  the  Draft  Law  makes  clear

that  the  national  currencies  will  become  denominations  of  the  euro  as  from  1  January  1999.

However, references to the euro and the Austrian schilling unit are not always uniform   in the

Draft Law. For example, in “Allgemeiner Teil”, Chapter 1, page 4, second paragraph, it is stated

that the euro will, on 1 January 1999, “stand by the Austrian schilling’s side” and “respectively

will  take  the  Austrian  schilling’s  place”.  On  page  8  (“Allgemeiner  Teil”,  Chapter 1),  last

paragraph, and on page 43 (“Besonderer Teil”), ad Article II, the euro is described as “currency

unit”.  The  EMI  recommends  that  a  uniform  terminology  be  used  in  the  Draft  Law  and  the

explanatory  memorandum  in  order  to  aviod  misunderstandings  as  regards  the  relationship

between the euro and the schilling as its national denomination.

9.

As regards the amendment of Article 193 of the Commercial Code (Section II, 2. of the Draft

Law) and Section XI (“Übergangsbestimmungen”) of the Draft Law, the EMI understands that

Austrian undertakings/entities can draw up their balance sheets either in euro or in the schilling

unit  during  the  transitional  period.  However,  the  EMI  notes  that  the  wording  of  Article  193

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paragraph  4  of  the  Commercial  Code  in  its  amended  version,  according  to  which  the  balance

sheet and the profit and loss account have to be drawn up in euro (in the meaning that schillings

are  covered  by  the  term  “euro”),  could  lead  to  misunderstandings.    A  reference  to  Article  XI,

paragraph 2 might therefore be made in Article II, 2. of the Draft Law.

10.

The EMI welcomes the fact that the explanatory memorandum states that the Draft Law aims

at  providing  the  economy  with  appropriate  instruments  to  make  use  of  the  euro  as  soon  as

possible.

11.

The  present  opinion  does  not  prejudge  reports  which  the  EMI  is  required  to  draw  up  under

Article 109j (1) of the Treaty and Article 7 of its Statute.

12.

The EMI agrees to this opinion being made public by the consulting authorities.

13 February 1998