Proposal for a Council Decision in accordance with article 122(2) of the Treaty for the adoption by Greece of the single currency on 1.1.2001
Date: 2000-05-03
Institutions: European Commission
Subjects: Economic and Monetary Union, Greece, economic convergence, euro, exchange rate

C 248 E/124

EN

Official Journal of the European Communities

29.8.2000

Proposal for a Council Decision in accordance with article 122(2) of the Treaty for the adoption
by Greece of the single currency on 1 January 2001

(2000/C 248 E/11)

COM(2000) 274 final (cid:151) 2000/0110(CNS)

(Submitted by the Commission on 3 May 2000)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 122, paragraph 2 thereof,

three of economic and monetary union (ERM II) were laid
down in the agreement of 1 September 1998 between the
ECB and the national central banks of the Member States
outside the euro area (3).

Having regard to the proposal from the Commission,

Having regard to the report from the Commission,

Having regard to the report from the European Central Bank,

Having regard to the opinion of the European Parliament,

Having regard to the discussion of the Council, meeting in the
composition of Heads of State or Government,

(1) Whereas the third stage of economic and monetary union
(EMU) started on 1 January 1999; whereas the Council,
meeting in Brussels on 3 May 1998 in the composition of
Heads of State or Government, decided that Belgium,
Germany, Spain, France, Ireland, Italy, Luxembourg, the
Netherlands, Austria, Portugal and Finland fulfilled the
necessary conditions for adopting the single currency in
1 January 1999 (1).

(2) Whereas, in accordance with paragraph 1 of Protocol 25
of the Treaty, the United Kingdom notified the Council
that it did not intend to move to the third stage of EMU
on 1 January 1999; whereas this notification has not been
changed; whereas,
in accordance with paragraph 1 of
Protocol No 26 of the Treaty and the Decision taken by
in Edinburgh in
the Heads of State or Government
December 1992, Denmark has notified the Council that
it will not participate in the third stage of EMU; whereas
Denmark has not requested that the procedure referred to
in Article 122(2) is initiated.

(3) Whereas Greece and Sweden have a derogation as defined

in Article 122 of the Treaty.

(4) Whereas the European Central Bank (ECB) was established
on 1 July 1998; whereas the European Monetary System
has been replaced by an exchange rate mechanism the
setting up of which was agreed by a Resolution of the
European Council on 16 June 1997 (2); whereas
the
procedures for an exchange rate mechanism in stage

for abrogation of

the derogation of

(5) Whereas paragraph 2 of Article 122 lays down the
procedures
the
Member States concerned; whereas according to that
Article at least once every two years, or at the request
of a Member State with a derogation, the Commission and
the ECB shall report to the Council in accordance with the
procedure laid down in Article 121(1); whereas such
reports have to be prepared in 2000; whereas on 9
March 2000 Greece made a request.

(6) Whereas national

legislation in the Member States
including the statutes of national central banks shall as
necessary be adapted with a view to ensuring compati-
bility with Articles 108 and 109 of the Treaty and the
Statute of
the
Commission and the ECB provide a detailed assessment
of
the legislation of Greece and
Sweden with Articles 108 and 109 of the Treaty and
the statute of the ESCB.

the compatibility of

the ESCB; whereas

reports of

the

for

the purpose of

that of, at most,

(7) Whereas according to Article 1 of Protocol No 21 the
criterion on price stability referred to in the first indent
of Article 121(1) shall mean that a Member State has a
price performance that is sustainable and an average rate
of inflation, observed over a period of one year before the
that does not exceed by more than 1 ‰
examination,
percentage points
the three best
performing Member States in terms of price stability;
whereas
the criterion on price
stability inflation will be measured by the harmonised
indices of consumer prices (HICPs) defined in Council
Regulation (EC) No 2494/95; whereas in order to assess
the price stability criterion a Member State’s inflation has
been measured by the percentage change in the arithmetic
to the
average of
arithmetic average of
the
previous period; whereas in the one year period ending
in March 2000 the three best performing Member States
in terms of price stability were France, Austria and
Sweden, with inflation rates of, respectively 0,9 %, 0,9 %
and 0,8 %; whereas a reference value calculated as the
simple arithmetic average of the inflation rates of the
three best performing Member States in terms of price
stability plus 1,5 percentage points was considered in
the reports of the Commission and the ECB; whereas,
on this basis, the reference value in the one year period
ending in March 2000 was 2,4 %.

twelve monthly indices of

twelve monthly indices

relative

(1) Council Decision 1998/317/EC, OJ L 139 of 11.5.1998.
(2) OJ C 236 of 2.8.1997.

(3) OJ C 345 of 13.11.1998.

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Official Journal of the European Communities

C 248 E/125

(8) Whereas according to Article 2 of Protocol No 21 the
criterion on the government budgetary position referred
to in the second indent of Article 121(1) shall mean that
at the time of the examination the Member State is not
the subject of a Council decision under Article 104(6) of
the Treaty that an excessive deficit exists.

in

the

participation

(9) Whereas according to Article 3 of Protocol No 21 the
exchange-rate
criterion
on
the European Monetary System referred
mechanism of
to in the third indent of Article 121(1) shall mean that
a Member State has respected the normal
fluctuation
margins provided for by the exchange-rate mechanism
(ERM) of the European Monetary System without severe
tensions for at least the last two years before the exam-
ination.
In particular, the Member State shall not have
devalued its currency’s bilateral central rate against any
other Member State’s currency on its own initiative for
the same period; whereas since 1 January 1999 the ERM
II provides the framework for assessing the fulfilment of
the exchange rate criterion; whereas in assessing the
fulfilment of
the
Commission and the ECB have examined the two year
period ending in March 2000.

criterion in their

reports,

this

for

(10) Whereas according to Article 4 of Protocol No 21 the
criterion on the convergence of interest rates referred in
the fourth indent of Article 121(1) shall mean that,
observed over a period of one year before the exam-
ination, a Member State has had an average nominal
long-term interest rate that does not exceed by more
than two percentage points that of, at most, the three
best performing Member States in terms of price stability;
whereas
criteria on the
the
convergence of
interest rates comparable interest rates
on 10-year benchmark government bonds were used;
whereas in order to assess the fulfilment of the interest
rate criterion a reference value calculated as the simple
arithmetic average of the nominal long-term interest rates
of the three best performing Member States in terms of
price stability plus two percentage points was considered
in the reports of the Commission and the ECB; whereas,
on this basis, the reference value in the one year period
ending in March 2000 was 7,2 %.

the purpose of

(11) Whereas, in accordance with Article 5 of Protocol No 21
the data used in the current assessment of the fulfilment
the convergence criteria will be provided by the
of
Commission; whereas
this
proposal
data; whereas
budgetary data were provided by the Commission after
reporting by the Member States by 1 March 2000 in
accordance with Council Regulation (EC) No 3605/93,
amended by Council Regulation (EC) No 475/2000.

the preparation of
provided

for
the Commission

(12) Whereas in Greece national

legislation,

statute of the national central bank,

including the
is compatible with

Articles 108 and 109 of the Treaty and the Statute of the
ESCB;

Regarding the fulfilment by Greece of the convergence
criteria mentioned in the four indents of Article 122(1)
of the Treaty:

(cid:151) the average inflation rate in Greece in the year ending
March 2000 stood at 2,0 % which is below the
reference value;

(cid:151) on 17 December 1999 (1) the Council abrogated its
previous Decision on the existence of an excessive
deficit
the
subject of a Council Decision on the existence of an
excessive government deficit;

in Greece and therefore Greece is not

(cid:151) Greece has been a member of

the ERM and
subsequently of ERM II during the last two years; in
that period the Greek drachma (GRD) has not been
and Greece has not
subject
the GRD bilateral
devalued, on its own initiative,
central
State’s
currency up to 1 January 1999 nor against the euro
since then;

any other Member

to severe

tensions

against

rate

(cid:151) in the year ending March 2000 the long-term interest
rate in Greece was, on average, 6,4 % which is below
the reference value;

Greece has
achieved a high degree of
convergence by reference to all four criteria.

sustainable

Consequently, Greece fulfils the necessary conditions for
the adoption of a single currency.

(13) Whereas the Council, acting by qualified majority on a
proposal by the Commission, shall decide which Member
States with a derogation fulfil the necessary conditions for
the adoption of
the single currency and abrogate the
derogations of the Member States concerned,

HAS ADOPTED THIS DECISION:

Article 1

Greece fulfils the necessary conditions for the adoption of the
single currency. The derogation of Greece is abrogated with
effect from 1 January 2001.

Article 2

This Decision is addressed to the Member States.

Article 3

This Decision shall be published in the Official Journal of the
European Communities.

(1) OJ L 12 of 18.1.2000.