Proposal for Council Regulation amending Regulation (EC) No 974/98 on the introduction of the euro
Date: 2000-05-30
Institutions: European Commission
Subjects: Economic and Monetary Union, European Monetary System, Greece, euro, exchange rate

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 30.5.2000
COM(2000) 346 final

2000/0137 (CNS)
2000/0134 (CNS)
2000/0138 (CNB)

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN
CENTRAL BANK

secondary legislation relating to
the euro and Greece

Proposal for

COUNCIL REGULATION

amending Regulation (EC) No 974/98
on the introduction of the euro

Proposal for

COUNCIL REGULATION

amending Regulation (EC) No 1103/97 on
certain provisions relating to the introduction of the euro

Proposal for

COUNCIL REGULATION

amending Regulation (EC) No 2866/98 on the
conversion rates between the euro and the currencies of the
Member States adopting the euro

(presented by the Commission)

COMMUNICATION FROM THE COMMISSION
TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN
CENTRAL BANK

secondary legislation relating to
the euro and Greece

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.

The Commission presents the respective proposals ahead of the decision of the Council on the
abrogation of the derogation of Greece in order to ensure flexibility with respect to the date of
adoption of the regulations by the Council.

The Communication includes proposals for:

• Council Regulation amending Council Regulation (EC) N° 974/98 on the introduction of

the euro.

• Council Regulation amending Council Regulation (EC) N° 1103/97 on certain provisions

relating to the introduction of the euro.

• Council Regulation amending Council Regulation (EC) N° 2866/98 on the conversion

rates between the euro and the currencies of the Member States adopting the euro.

2

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 euro1 and Regulation (EC) N° 1103/97
on certain measures relating to the introduction of the euro2 – 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.

II. Comments on the articles

Article 1

three definitions in Article 1 of Regulation (EC)
In the first paragraph of this article,
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.

1

2

OJ L 139, 11.5.1998, pp. 1-5
OJ L 162, 19.6.1997, pp. 1-3

3

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.

4

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,1

Having regard to the opinion of the European Parliament,2

Having regard to the opinion of the European Central Bank,3

Whereas:

(1)

(2)

(3)

(4)

Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro4 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;

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;

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;

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;

1

2

3

4

…
…
…
OJ L 139, 11.5.1998, pp. 1-5

5

(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:

1.

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

Article 1

–

–

–

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.”

This Regulation shall enter into force on 1 January 2001.

Article 2

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

Done at Brussels,

For the Council
The President

6

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 Regulations (EC) N° 1103/97 on certain provisions relating to the introduction of the
euro1 and N° 974/98 on the introduction of the euro2 are complementary. Regulation N°
1103/97 includes those provisions where there was an urgent need for legal certainty before
the date at which it was possible to take measures on the basis of Article 123 (4) of the Treaty
(ex 109 l (4)). The latter article was available as a legal basis only after it was confirmed
which Member States fulfilled the necessary conditions for the adoption of the single
currency. Forming together the legal framework of the euro, the two regulations include a
number of current definitions of notions relating to the currency. The purpose of the proposed
amendment is to ensure that the definitions in the two regulations remain identical in order to
avoid legal uncertainty.

II. Comments on the articles

Article 1

In this article, two definitions in Article 1 of Regulation (EC) N° 1103/97 are amended: 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)), and 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.

Article 2

This article fixes the date of entry into force of the regulation at 1 January 2001, ensuring that
the new definitions are applicable as from the date at which the amended Regulation (EC)
N° 974/98, which includes the same definitions, enters into force.

1

2

OJ L 162, 19.6.1997, pp. 1-3
OJ L 139, 11.5.1998, pp. 1-5

7

2000/0134 (CNS)

Proposal for

COUNCIL REGULATION

amending Regulation (EC) No 1103/97 on
certain provisions relating to the introduction of the euro

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article
308 thereof,

Having regard to the proposal from the Commission,1

Having regard to the opinion of the European Parliament,2

Having regard to the opinion of the European Central Bank,3

Whereas:

(1)

(2)

Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the
introduction of the euro4 includes rules on the adoption of the conversion rates
between the euro and the currencies of the Member States which adopt the euro and on
the use of these rates for conversions of monetary amounts; whereas these rules apply
to the conversion rates of the currencies of those Member States which adopted the
euro when the Community entered the third stage of Economic and Monetary Union;
whereas it is necessary to extend the rules to the conversion rates of the currencies of
any Member States which adopt the euro at a later date;

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,

HAS ADOPTED THIS REGULATION:

In Article 1 of Regulation (EC) No 1103/97,

Article 1

1

2

3

4

…
…
…
OJ L 162, 14.6.1997, pp. 1-3

8

–

–

the words “or in accordance with the fifth paragraph of this article” shall be added at
the end of the third 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 of the fourth indent.

Article 2

This Regulation shall enter into force on 1 January 2001.

Done at Brussels,

For the Council
The President

9

EXPLANATORY MEMORANDUM

On 31 December 1998, the Council adopted the conversion rates between the euro and the
eleven currencies of the Member States which fulfilled the necessary conditions and which
adopted the euro with effect from 1 January 1999. The Council had decided on 2 May 1998
that Greece was one of the Member States which at that time did not fulfil the necessary
conditions for the adoption of the single currency.

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 conversion rates of the currencies which were replaced by the euro at the beginning of
Stage Three were adopted on the basis of the first sentence of Article 123 (4) of the Treaty (ex
109 l (4)). The rates of currencies of Member States joining the euro area at a later date are
adopted according to Article 123 (5). In 1998, the rates had to be fixed under the constraint
that this measure would by itself not modify the external value of the euro, i.e. that the rate of
conversion between the ECU basket and the euro would be 1 : 1. Therefore it was not possible
to determine and to adopt the conversion rates between the euro and the national currencies
before the last day of the year, after the final exchange rates of the ECU basket had been
calculated by the Commission according to the established rules. This constraint is no longer
existent.

Fixing the conversion rate of the drachma and substituting the euro for the drachma are
complementary decisions which must take effect on the same date, as was the case for the
initial eleven currencies. By contrast, the date at which the decisions are taken must not
necessarily be the same; it would not, however, seem logical to adopt the conversion rate
before taking a decision on the substitution of the currency.

II. Comments on the articles

Article 1

The proposed rate is the present central rate of the drachma in the exchange rate mechanism
(ERM II). This is the rate following revaluation of the drachma by 3½ percent on 15 January
2000.

As for the other currencies and in accordance with Council regulation (EC) N° 1103/97 on
certain provisions relating to the introduction of the euro, the rate is determined with six
significant figures.

10

Article 2

This article ensures that the regulation will be applicable in conformity with the timing of the
other Council acts relating to the abrogation of the derogation of Greece and the date of the
substitution of the euro for the drachma.

11

2000/0138 (CNB)

Proposal for

COUNCIL REGULATION

amending Regulation (EC) No 2866/98 on the
conversion rates between the euro and the currencies of the
Member States adopting the euro

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission,1

Having regard to the opinion of the European Central Bank,2

Whereas:

(1)

(2)

(3)

(4)

(5)

Regulation (EC) No 2866/98 of 31 December 1998 on the conversion rates between
the euro and the currencies of the Member States adopting the euro3 determines the
conversion rates as from 1 January 1999 pursuant to Regulation (EC) No 974/98 of
3 May 1998 on the introduction of the euro;4

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

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;

Pursuant to Regulation (EC) No 974/98, as amended by Regulation (EC) No ../00, the
currency of Greece will be the euro as from 1 January 2001;

The introduction of the euro in Greece requires the adoption of the conversion rate
between the euro and the drachma,

1

2

3

4

…
…
OJ L 359, 31.12.1998, pp. 1-2
OJ L 139, 11.5.1998, pp. 1-5

12

HAS ADOPTED THIS REGULATION:

Article 1

In the list of conversion rates in Article 1 of Regulation (EC) No 2866/98, the following shall
be inserted between the rates of the German mark and the Spanish peseta:

“ = 340.750 Greek drachma”.

This Regulation shall enter into force on 1 January 2001.

Article 2

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

Done at Brussels,

For the Council
The President

13