WRITTEN QUESTION P-3931/00 by Sylvia-Yvonne Kaufmann (GUE/NGL) to the Commission. Introduction of the Euro in the Yugoslav Republic of Montenegro.
Date: 2000-12-06
Institutions: European Parliament, Provisional data
Subjects: Germany, Kosovo, Montenegro, accession negotiations, currency area, euro area, national currency, single monetary policy

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Official Journal of the European Communities

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The Commission also declared its willingness to allow greater use of State aid for research and
development (R&D) in the shipbuilding sector and recalled that substantial funding was also available
under the Community research framework programme. In addition Community shipyards would continue
to be able to benefit from other aid possibilities such as investment aid for innovation, regional investment
aid for the modernisation of existing shipyards, as well as restructuring and closure aid, where necessary,
to help in the process of structural adjustment and reconversion to other activities.

These views were presented to the Industry Council on 5 December 2000, which welcomed the
Commission(cid:146)s determination to tackle the problem of unfair Korean competition and took note of the
Commission(cid:146)s proposals in this regard.

The operational programme for the Lisbon and Tagus Valley region includes under Priority III-Measure
3.17 projects to improve river connections between the banks of the Tagus at Lisbon. These projects have
not yet been submitted to the Commission, which is not therefore in a position to confirm or deny the
figure of 60 % of Community funding claimed by the honourable Members. The average rate of funding
for the measure is only 48,8 %, however, and in view of the fact that these projects are likely to generate
income, the actual figure in the case of this project could in no event exceed 50 %.

(1)

If appropriate, the directive relevant to the contract in question is Council Directive 93/36/EEC of 14 June 1993
coordinating procedures for the award of public supply contracts (OJ L 199, 9.8.1993), as amended by European
Parliament and Council Directive 97/52/EC of 13 October 1997 amending Directives 92/50/EEC, 93/36/EEC and
93/37/EEC concerning the coordination of procedures for the award of public service contracts, public supply
contracts and public works contracts respectively (OJ L 328, 28.11.1997).

(2) COM(2000) 730 final.
(3) OJ L 202, 18.7.1998.

(2001/C 174 E/202)

WRITTEN QUESTION P-3931/00

by Sylvia-Yvonne Kaufmann (GUE/NGL) to the Commission

(6 December 2000)

Subject: Introduction of the Euro in the Yugoslav Republic of Montenegro

1.
Is the Commission aware whether and, if so, how and by what concrete means and to what extent
the Government of the Federal Republic of Germany and the German Bundesbank have supported and
promoted the introduction of the Deutschmark in the Yugoslav Republic of Montenegro?

2. What is the Commission(cid:146)s view of the declared intention of the Government of the Yugoslav
Republic of Montenegro of introducing the Euro as its sole currency as of 1 January 2002?

Does the Commission take the view that the Yugoslav Republic of Montenegro is currently fulfilling,
3.
or can fulfil by 1 January 2002, the stability criteria for membership of the single currency set out in the
Treaties (in particular, in Article 121 of the EU Treaty and Protocols 11 and 12 to the Amsterdam Treaty)?

4. What concrete measures to prevent the introduction of the Euro in Montenegro will be taken by the
Commission, which states in section III.3 of its most recent strategy paper on enlargement that the
introduction of the Euro in new Member States (as in the case of the original Euro-zone participants) will
only be decided when it has been ascertained, in accordance with Article 121 of the EU Treaty, whether a
high degree of sustainable convergence has been achieved?

5.
Does the Commission know whether the Euro is also to be introduced in the Yugoslav region of
Kosovo from 2002 and, if so, does Kosovo, in the opinion of the Commission, fulfil the stability criteria
enshrined in the EU Treaty and applying to all States participating, or wishing to participate, in the single
currency?

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6. What concrete measures does the Commission propose to take in order to prevent the introduction
of the Euro in Kosovo if the latter does not achieve the stability criteria for membership of the Euro by
2002?

How does the Commission view the introduction of the Deutschmark in Montenegro and Kosovo
7.
against the background of UN Resolution 1244, which establishes the territorial integrity of the Federal
Republic of Yugoslavia?

8. What are the consequences, in the view of the Commission, of the fact that 33 % of all Deutschmark
notes and coins are in circulation abroad, and what are the consequences as regards the proof of the Euro
against forgery?

Answer given by Mr Solbes Mira on behalf of the Commission

(5 January 2001)

The Commission was informed by the German Bundesbank that it has neither supported nor
1.
promoted the introduction of the Deutsch Mark (DM) in the Republic of Montenegro. The Deutsche
Bundesbank stressed, that there are no legal restrictions as to the use of DM in foreign countries and
territories. However, at the same time, the Deutsche Bundesbank has no legal obligations to support
countries or territories that decide to use the DM as a legal tender.

2.
In November 1999, the Republic of Montenegro decided unilaterally to establish a dual currency
system and adopted the DM as a parallel currency. According to the authorities, the decision was mainly
driven by an unstable, expansionary monetary policy stance of the National Bank of Yugoslavia, which
resulted in significant inflationary pressures throughout the Federal Republic of Yugoslavia (FRY). The
establishment of an independent monetary regime from the FRY central bank was an attempt to isolate the
Montenegrin economy from the negative consequences of monetary expansion. The change-over was
facilitated by the fact that the DM was already circulating in Montenegro, mainly for savings purposes and
large ticket transactions such as real estate transactions.

In 2000, the economic objectives stressed by the authorities when the parallel circulation was allowed,
have been largely achieved. After a few months, the DM accounted for the vast majority of transactions,
and over 90 % of deposits at the central payments bureau were denominated in DM. Moreover, inflation
has been decelerating steadily; monthly inflation has been reduced from 5 % in January to 1 % in October
2000. As of 1 December 2000, the Government of Montenegro declared the DM the sole legal tender in
the territory of the Republic and abolished the use of the Yugoslav Dinar. As the exchange rate between
DM (as well as the other former currencies of the Euro-zone) was irrevocably fixed at the end of 1998,
there is no difference between the introduction of DM and the introduction of Euro; therefore the Euro is
de facto already introduced in Montenegro.

A different question concerns the procedures of the introduction of Euro notes and coins. It is the
Commission(cid:146)s view that the Montenegrin authorities, provided they are aiming at introducing Euro coins
and notes, shall contact the Deutsche Bundesbank and the European Central Bank (ECB) with respect to
the technical modalities of cash exchanges in countries that do not belong to the Euro area. The European
Central Bank recently published modalities for the distribution of front-loaded Euro banknotes outside the
Euro area (the Honourable Member is referred to the ECB press release of 14 December 2000).

3. to 6. Montenegro is currently not a member of the European Monetary Union (EMU) and is not
seeking membership. Therefore, the stability criteria for membership of the single currency set out in the
the
Treaties do not apply.
Copenhagen criteria for assuming membership of the Union as well as the procedures recalled in Question
4, are not relevant. Montenegro has unilaterally introduced the DM/Euro as its sole legal tender, and there
are no legal restrictions to do so. Such a unilateral commitment does not impose any obligations on the
ECB to supervise monetary policy in Montenegro or to provide liquidity support, and there is no formal
co-operation between the ECB and Montenegro.

In addition, Montenegro is not an accession candidate.

In this respect,

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Under the authority of United Nations (UN) Resolution 1244, the United Nations Interim Mission in
Kosovo (UNMIK) has legalised the utilisation of any currency widely accepted in the territory of Kosovo.
Under this resolution, the Yugoslav Dinar retains its legal status and can be used to the extent that
businesses and people so desire. Thus, albeit recognising that the DM has been the preferred currency in
Kosovo for some time, the resolution does not introduce the DM as the sole legal tender.

7.
UN Resolution 1244 does not apply for Montenegro. The question of the creation of sustainable
monetary and exchange rate arrangements in the FRY should be addressed in the framework of
negotiations on the future constitutional relations between Serbia and Montenegro.

Similarly as in the case of Montenegro, the legal utilisation of the DM in Kosovo provides for a stable
framework to support economic development. From an economic and social point of view, it would have
been impossible for UNMIK to stabilise the Kosovo economy after the conflict, while using the Yugoslav
Dinar, a high inflation currency, and having no control on the money supply. As said above, the resolution
does not prohibit the utilisation of the Yugoslav Dinar.

According to information that

the
8.
circulation of DM notes and coins in countries outside Germany does not represent a problem with
respect to the conduct of monetary policy, neither to the Deutsche Bundesbank nor to the European
Central Bank. No correlation is seen between the circulation of DM notes and coins outside Germany and
forgery of Euro notes. The Commission has no reason to disagree with this position.

the Commission received from the Deutsche Bundesbank,

(2001/C 174 E/203)

WRITTEN QUESTION P-3933/00

by Bart Staes (Verts/ALE) to the Council

(7 December 2000)

Subject: Common Foreign Policy and Kosovo

The former president of Finland, Martti Ahtissari, has published a book called (cid:145)Mission to Belgrade(cid:146) in
which he describes how, as the former EU peace emissary, he and the Russian emissary Viktor
Chernomyrdin went to Belgrade on 2 June 1999 to present the international community(cid:146)s peace plan to
the Yugoslav president, Slobodan Milosevic. Ahtissari says that at first Milosevic resolutely refused to
negotiate the peace plan but that the following morning he suddenly agreed to accept it. Ahtissari says that
the logical explanation for this volte-face was that Milosevic had concluded a secret deal with the Russian
generals to make northern Kosovo a Serbian zone.

1.

Can the Council confirm Ahtissari(cid:146)s hypothesis? If not, why not?

2.
If so, how does the Council explain the fact that the region of Kosovo north of Mitrovica has now
become de facto a Serbia enclave despite the fact that the Russian army has not been able to enforce the
pact on its own and despite the presence of KFOR?

3.
Is the Council prepared to do everything in its power to put an end to the creation of a Serbian
enclave in northern Kosovo as soon as possible and to return this area to its inhabitants? If not, why not?

4.
If so, when will the ethnic Albanian inhabitants be able to return to their homes in northern
Mitrovica? And when will the hospital and university of Mitrovica be accessible once again to the ethnic
Albanians?