WRITTEN QUESTION E-0088/02 by Erik Meijer (GUE/NGL) to the Commission. Use of the euro to make domestic payments in areas outside the European Monetary Union zone.
Date: 2002-01-24
Institutions: European Parliament, Provisional data
Subjects: Bosnia and Herzegovina, EU financing, Economic and Monetary Union, Kosovo, Montenegro, euro, issuing of currency, monetary relations

12.12.2002

EN

Official Journal of the European Communities

C 309 E/9

implementation of the Structural Funds after 2006. This is all the more serious in that they include the
conclusion of negotiations with the most advanced countries in the second half of 2002.

Since this issue affects both the candidate countries and regions in the Union of fifteen such as Galicia,
which may, after 2006, find themselves below the level of 75 % of the Community per capita average
income, what reasons which cannot be made public can there be to explain why the Council presidency’s
priorities do not include the preparation of negotiations on these issues of vital importance for the shaping
of the EU?

Reply

(30 September 2002)

The Council stresses the importance it attaches to the policy of economic and social cohesion, as well as to
the continuation of the negotiations with the candidate countries.

With respect to the budget forecasts up to 2006, the Council would remind the Honourable Member that
it intends fully to respect the 2000-2006 financial perspective attached to the Interinstitutional Agreement
of 6 May 1999 on budgetary discipline and improvement of the budgetary procedure (1). It particularly
draws attention to point 25 of the Interinstitutional Agreement of 6 May 1999 which provides, on quite
specific terms, for the 2000-2006 financial perspective to be adjusted, if need be, to cater for enlargement
to include new Member States so as to take account of the expenditure requirements resulting from this
enlargement.

Furthermore, on 30 January 2002, the Commission published a communication on the common financial
framework 2004-2006 for the accession negotiations, which outlines the global approach the Commission
intends to take in the draft common positions in the fields of agriculture, structural actions and the budget.
The Council will obviously study both this approach and the Commission’s draft common positions
carefully.

With respect to the questions and the negotiations on the financial perspective and the budget forecasts, as
well as on the implementation of the Structural Funds after 2006, these will be dealt with in due course,
since the Council has not yet in fact received a proposal from the Commission regarding the Structural
Funds.

The Council would also inform the Honourable Member that, where the Council’s priorities for the 2003
budget are concerned, the Council adopted the budget guidelines for 2003 at its meeting on 5 March 2002.

(1) OJ C 172, 18.6.1999, p. 1.

(2002/C 309 E/011)

WRITTEN QUESTION E-0088/02

by Erik Meijer (GUE/NGL) to the Commission

(24 January 2002)

Subject: Use of the euro to make domestic payments in areas outside the European Monetary Union zone

1.
Can the Commission confirm that, as of 1 January 2002, the euro was not only introduced as a
currency to replace all the separate currencies which had previously existed in the twelve EU Member
States participating in EMU, including their very remote territories outside Europe, but also became legal
tender in the former Yugoslav federal states and autonomous provinces of Kosovo, Montenegro and
Bosnia-Herzegovina, which are not involved in EMU?

C 309 E/10

Official Journal of the European Communities

EN

12.12.2002

Are any other currencies besides the euro still

legal tender in Kosovo, Montenegro and Bosnia-
2.
Herzegovina? If so, which, and for how much longer than the transition period being applied in most EMU
states, i.e. the first two months of 2002?

3. Who is organising the collection and distribution of coins and banknotes in the areas referred to in
question 2, and who is paying for these operations? Is this a responsibility of the Federal Republic of
Germany, which is taking back its marks, or of a body connected with the European Union?

Are there any states or parts of states other than the areas referred to in questions 1 and 2 where the
4.
euro is in mass circulation or is being placed in mass circulation to replace the old currency for purposes
of domestic payments? How was it introduced and who is bearing the cost?

Does the Commission anticipate that the euro will be adopted for use in domestic transactions in yet
5.
more non-members of EMU in the near future without the state in question simultaneously joining EMU?
If so, where and under what conditions?

6. What, in practice, is the difference, from the point of view of national authorities and residents,
between participation in EMU and acceptance of the euro as the most generally used domestic currency?
What role are these differences likely to play in decisions by potential new members to join EMU?

Answer given by Mr Solbes Mira on behalf of the Commission

(18 March 2002)

1. to 3.
United Nations Interim Mission in Kosovo (UNMIK) Regulation No 4, signed on 2 September
1999, legalises the use and possession of any foreign currency in Kosovo, recognising the fact that Kosovo
was and still is a largely cash-based economy, with the German mark/euro being the preferred currency.
However, under this Regulation, the Yugoslav dinar retains, in principle, its status as sole legal tender. In
Montenegro the German mark/euro is the sole legal tender, replacing the Yugoslav dinar. In Bosnia and
Herzegovina the konvertible marka (KM) was introduced in mid-1998 under a currency board regime,
pegging the KM to the German mark (and now the euro). The KM is the only legal tender in Bosnia and
Herzegovina. The Banking and Payments Authority of Kosovo (BPK) has been given overall responsibility
for organising the changeover to the euro in Kosovo. The Kosovo budget is covering the costs incurred. In
Montenegro the Monetary Council adopted a euro introduction plan in mid-2001. The changeover was
facilitated through a commercial arrangement with a German private bank that delivered euro notes and
coins before the end of 2001. The costs of the changeover in Montenegro were borne by the general
public.

Germany did not take any responsibility for the changeover of German marks into euros in third
countries. The European Central Bank (ECB) and national central banks facilitated the changeover in third
countries via the frontloading of euro coins and notes against collateral.

4. to 6.
The euro has also been introduced in Monaco, Andorra, San Maríno and the Vatican State.
Monaco, San Maríno and the Vatican State mint euro coins under a special agreement with the
Community based on Article 109(3) of the EC Treaty and Declaration No 6 annexed to the Final Act of the
Treaty on European Union. Banknotes, on the other hand, have been introduced mainly by commercial
banks.

The Commission does not expect the euro to become the transaction currency in non-member countries,
except occasionally in some border or tourist regions. Since such practices develop de facto and not de
jure, no specific conditions have been laid down.

Only countries participating in the euro may issue euro coins and take part in the decision-making
mechanisms of the Eurosystem, which is responsible for issuing banknotes and formulating monetary
policy. If a non-EU country adopts the euro as its national currency, this implies that it will cease to issue
national currency (and forgo the resulting income) and that it will have no influence whatsoever over
monetary policy, which will be decided without reference to the economic situation in its territory.