WRITTEN QUESTION E-0089/02 by Erik Meijer (GUE/NGL) to the Commission. Adverse impact of the use of the euro as a parallel domestic currency for the purchase of luxury services and durable consumer goods.
Date: 2002-01-24
Institutions: European Parliament, Provisional data
Subjects: accession to the European Union, consumption, euro, euro area, exchange rate, national currency, non-participating country (euro area), purchasing power

6.2.2003

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Official Journal of the European Union

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The information provided by the Member of the provincial parliament has helped the Commission to
4.
ask precise information on aspects of the case on which the Dutch authorities had initially not given full
information. It appeared that the Dutch authorities did not consider a number of measures as State aid in
the meaning of Article 87.1 of the EC Treaty. In the final decision the Commission partly came to an
opposite conclusion.

5.
Almost the whole of the three northernmost provinces forms part of the Dutch regional aid map,
which defines the regions that are eligible for regional aid under Article 87(3)(c) of the EC Treaty. In these
regions the Dutch authorities may grant regional aid (e.g. on the basis of the ‘Investeringspremieregeling’-
scheme), but also the level of aid for training, Research and Technological Development (R & D) and
environment can be higher than the level that can be allowed in other, more prosperous regions in the
Netherlands. More information can be found on the Commission’s website (2).

(1) OJ C 301 E, 5.12.2002, p. 21.
(2) http://europa.eu.int/comm/competition/index_en.html.

(2003/C 28 E/014)

WRITTEN QUESTION E-0089/02

by Erik Meijer (GUE/NGL) to the Commission

(24 January 2002)

Subject: Adverse impact of the use of the euro as a parallel domestic currency for the purchase of luxury

services and durable consumer goods

1.
Does the Commission anticipate that the acceptance of payment in euro outside the territory of the
EMU Member States and other areas where the euro has been generally introduced will remain confined to
department stores, tourist shops, hotels, cafés and restaurants frequented by people from the euro zone in
centres of tourism in the three EU Member States which are not participating in EMU, or does it expect
that the euro will soon be widely used on a large scale as a domestic currency in other states with
considerably lower standards of living than the EU average and weak national currencies?

2.
for
On 7 January 2002, Commissioner Verheugen stressed the expectation that candidates
membership of the EU would naturally introduce the euro after accession to the EU, despite the fact that
at present most candidate countries cannot meet the Stability Pact criteria relating to annual government
deficits and ceilings on state debt. Was this intended to increase the scope for using the euro as a domestic
currency in those countries without their participating in EMU?

3.
As a result of the replacement of twelve national currencies with the euro, is it likely that areas will
come into being outside the EU and EMU territories where the wages of most low-paid workers will for a
long time continue to be paid in the traditional local currency but prices (cid:1) particularly those of expensive
consumer goods and luxury services (cid:1) will increasingly be quoted and charged in euro?

Does the Commission agree that,

4.
if people are compelled to change money for domestic
consumption purposes, they will constantly run the risk of fluctuations in the exchange rate between
their local currency and the euro, as a result of which their purchasing power will decline, a situation
comparable to that which exists in some Third World countries where the American dollar has long
played a similar role as a parallel currency?

5. What will the EU institutions do to prevent a widening gulf between rich and poor in third countries
which are influenced by the euro and to prevent situations arising similar to that which occurred around
New Year in Argentina due to the increasing use of the dollar instead of the peso?

Answer given by Mr Solbes Mira on behalf of the Commission

(16 April 2002)

As is the case with other major international currencies, such as the American dollar, it can be expected
that the euro will be accepted as means of payment in many areas outside the euro zone (for example: in

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tourist areas, by hotels, etc.), in addition to the national currency. Certain companies and large retailers,
notably in pre-in countries, have already made announcements that they will accept payments in euros.
This will in particular apply to areas, such as the Balkan countries, where Union currencies, and notably
the Deutsche Mark, have been widely used in the past. It is not expected that the euro will be used as a
domestic currency on a large scale, except for Montenegro and Kosovo.

After their accession, the candidate countries are expected to adopt the euro, but not immediately, and
only when they fulfill the necessary conditions for its adoption, as set out in the EC Treaty. Full equal
treatment will be applied to these countries compared to the initial participants in the euro area in
deciding whether they have reached a high degree of sustainable convergence allowing them to adopt the
single currency (see appendix for details on the institutional framework). The Commission has no position
as to the use of the euro as an international currency by private operators in third countries.

The choice of the monetary policy and exchange rate regime in third countries is a domestic policy issue,
which has to be seen as part of the wider economic policy framework. It is unilaterally decided by the
countries concerned, and cannot give rise to particular obligations on the part of the Union. However, in
addition to an active economic policy dialogue, the Union is supporting technically and financially in the
context of its development and external relations policies the efforts of third countries to reduce poverty
and to implement economic reform programmes.

Appendix: The institutional framework for EMU participation

The EU has entered the third stage of EMU on 1 January 1999. From the date of its accession, the new
Member State will participate in Economic and Monetary Union and will assume the rights and obligations
that constitute the third stage. According to the EC Treaty, and disregarding an opt-out status, a member
State is either a Member State that has adopted the euro or a ‘Member State with a derogation’. According
to the EC Treaty, the decision to adopt the euro is preceded by the procedure foreseen in Article 121(1)
(former Article 109 j(1)). The new Member State cannot adopt the euro upon accession because this
procedure, which requires inter alia an assessment of the sustainability of the government financial
position in accordance with Article 104(6) (former Article 104 c(6)), cannot be applied before accession.
Nor will the new Member State have participated in the Exchange Rate Mechanism, which is not open to
the candidate countries prior to accession. According to the EC Treaty, a decision to grant derogation is
taken in accordance with the procedure laid out in Articles 121 and 122. Therefore, the status of the new
Member State as a ‘Member State with a derogation’, the implications of which are listed in Article 122(3)
of the EC Treaty, must instead be determined in the Accession Treaty. Only after the application of
Article 104 and participation in the Exchange Rate Mechanism, could a decision be taken on the new
Member State’s fulfilment of the necessary conditions for the adoption of the euro as referred to in the EC
Treaty.

(2003/C 28 E/015)

WRITTEN QUESTION E-0139/02

by Salvador Garriga Polledo (PPE-DE) to the Commission

(31 January 2002)

Subject: Budget heading for the activities of the Praesidium of the European Convention

The Laeken Declaration not only mentions the launching of a constituent process for the European Union,
but also openly proposes the direct election of the Commission President, points the way for the
establishment of a European government, outlines a common penal system and includes the regions in the
debate on the distribution of powers in the EU.

The work of the Praesidium responsible for examining proposals on these matters is therefore highly
important and it should be given the resources and facilities to perform its task.

Will the Commission say which budget heading will be used to ensure that the Praesidium has the material
resources to perform its job in a trouble-free manner and how it will be developed in future, including the
appropriate budgetary control?