Opinion of the European Central Bank of 23 February 2006 at the request of the Central Bank of Malta on a draft law on the adoption of the euro (CON/2006/10)
Date: 2006-02-23
Institutions: European Central Bank
Subjects: Malta, euro, monetary integration, money, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 23 February 2006  

at the request of the Central Bank of Malta 

on a draft law on the adoption of the euro 

(CON/2006/10) 

On  20  January  2006,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Central  Bank  of 

Malta for an opinion on the Euro Adoption Act (bill on the adoption of the euro in the Republic of Malta 

(hereinafter the ‘draft law’)). 

The ECB’s competence to deliver an opinion is based on the first and second indents of Article 2(1) of 

Council  Decision  98/415/EC  of  29  June  1998  on  the  consultation  of  the  European  Central  Bank  by 
national authorities regarding draft legislative provisions1, as the draft law relates to currency matters and 

means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the 

European Central Bank, the Governing Council has adopted this opinion.  

The  ECB  welcomes  this  initiative  to  prepare  early  for  the  introduction  of  the  euro,  thus  ensuring  the 

timely implementation of the necessary transitional measures. The draft law intends to establish the legal 

framework and mechanics for the adoption of the euro as the currency of Malta and for the replacement 

of  the  Maltese  lira.  It  lays  down  (i)  measures  for  the  adoption  of  the  euro;  and  (ii)  the  Minister  of 

Finance’s  powers  with  regard  to  the  introduction  of  the  euro.  The  purpose  of  the  delegation  to  the 

Minister  of  Finance  of  the  power  to  issue  regulations  in  this  field  is  to  shorten  the  procedure  for  the 

adoption of the euro and increase flexibility in updating the same regulations. 

1. 

Preliminary terminological considerations 

1.1 

In several parts of the draft law the term ‘unit’ is added to the word ‘currency’. In consistency with 

the terminology of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the 
euro2, the term ‘unit’ should be reserved for addressing the unit of account, but otherwise the euro 
is to be adopted merely as the ‘currency’ of Malta3. 

1  
2  
3  

OJ L 189, 3.7.1998, p. 42. 
OJ L 139, 11.5.1998, p. 1.  
In addition to being the currency of the ‘participating Member States’.  

 
 
 
 
                                                      
1.2  There is no need to define the ‘euro’ in Article 3 of the draft law as Community law defines it. For 

this  reason,  the  draft  law,  when  defining  the  ‘euro’,  should  merely  refer  to  the  definition  in 

Regulation (EC) No 974/98.  

1.3  The  definition  of  ‘legal  instrument’  should  be  aligned  with  the  definition  in  Council  Regulation 

(EC) No 974/98, to include the words ‘legislative and statutory provisions’. There is the risk that 

the current definition in the draft law has a narrower effect.  

1.4  Although  the  ECB  is  consulted  on  the  English  language  version  of  the  draft  law  only,  in 

accordance  with  the  Maltese  Constitution  the  final  text  of  the  law  has  to  be  adopted  also  in  the 

Maltese  language.  The  Maltese  version  prevails  in  case  of  conflict,  unless  expressly  specified 

otherwise.  The  Maltese  version  of  the  law  will  therefore  need  to  refer  to  the  single  currency  as 

‘euro’ in order to comply with Article 2 of Council Regulation (EC) No 974/98 that provides that 

‘the currency of the participating Member States shall be the euro’, and with the conclusions of the 

Madrid European Council of 16 December 1995 recorded in recital 2 of the same Regulation that: 

‘the name of the single currency must be the same in all official languages of the European Union, 

taking  into  account  the  existence  of  different  alphabets’.  In  addition,  the  European  Council  has 

concluded  that  the  uniform  name  ‘euro’  of  the  single  currency  is  ‘the  agreed  and  definitive 

interpretation  of  the  relevant  Treaty  provisions’,  and  that  pursuant  to  Article  5(3)  of  the  Act 
concerning  the  conditions  of  accession4,  Member  States  have  to  observe  the  principles  and 

guidelines deriving from the declarations, resolutions or other positions of the European Council at 

the time of their accession to the EU. 

2. 

Comments on Part II ‘Measures for the Adoption of the Euro’ 

2.1  The ECB notes that in Article 4(i) and (ii) of the draft law the Minister will prescribe by order that 

euro  banknotes  and  coins  are  legal  tender,  and  that  the  euro  is  the  currency  of  Malta.  In  this 

context, the ECB refers to Article 249 of the Treaty which provides that a Community regulation 

‘shall  be  binding  in  its  entirety  and  directly  applicable  in  all  Member  States’.  A  Community 
regulation therefore does not need to be transposed into the domestic law of Member States5. If a 

Member State transposes a regulation into national law, the fact that the provision is a Community 

law provision  may be obscured. In addition, if a Member State transposes a regulation in even a 

slightly different form, there is a risk that its content will be altered.  

2.2  Considering  that  Community  regulations  and  decisions  on  monetary  matters  apply  directly  in 

Malta, Article 4 of the draft law should not repeat Article 2 of Council Regulation (EC) No 974/98 

4  
5  

OJ L 236, 23.9.2003, p. 34. 
As stated by the Court of Justice of the European Communities in Case 34-73 Fratelli Variola S.p.A. v Amministrazione 
italiana delle Finanze [1973] ECR 981: ‘by virtue of the obligations arising from the Treaty and assumed on ratification, 
Member  States  are  under  a  duty  not  to  obstruct  the  direct  applicability  inherent  in  regulations  and  other  rules  of 
Community  law.  Strict  compliance  with  this  obligation  is  an  indispensable  condition  of  simultaneous  and  uniform 
application  of  Community  regulations  throughout  the  Community’.  This  position  was  also  reiterated  in  Case  50-76 
Amsterdam Bulb BV v Produktschap voor Siergewassen [1977] ECR 137. 

2 

 
 
                                                      
and  Article  106(1)  of  the  Treaty,  which,  in  addition,  are  clear  and  sufficiently  comprehensive. 

Article 4 instead should merely refer to the abovementioned Community provisions and the Statute 

of the European System of Central Banks and of the European Central Bank as the legal basis for 

the adoption of the euro in Malta, and provide the Minister with the capacity to prescribe by order 

the discontinuation of the legal tender status of the Maltese lira banknotes and coins (Article 15(1) 

of  Council  Regulation  (EC)  974/98),  to  regulate  the  dual  circulation  period  until  the  withdrawal 

from  circulation  of  national  banknotes  and  coins  (Article  15(2)  of  Council  Regulation 

(EC) 974/98), as well as their late redemption (Article 16 of Council Regulation (EC) 974/98), and 

to adopt any necessary provision regarding the logistics of the cash changeover.  

2.3  For  the  same  reason,  Article  5  of  the  draft  law  granting  powers  to  the  Minister  in  relation  to 

Community provisions that have direct effect needs to be reconsidered, given that the application 

of the reference to euro in legal instruments and the principle of continuity are already provided for 

in  Article  6(2)  of  Council  Regulation  (EC)  No  974/98  and  Article  3  of  Council  Regulation  (EC) 
No 1103/97  on  certain  provisions  relating  to  the  introduction  of  the  euro6  respectively.  It  should 

instead refer to these Community provisions. Any reference to ‘legal instruments’ should be in line 

with  the  same  definition  in  Council  Regulation  (EC)  No  974/98.  Hence  phrases  such  as  ‘law, 

contract or other legal instrument’ should be replaced by ‘legal instrument’. It is also important to 

refer to the euro as the currency of Malta when necessary, since from the adoption date the euro 

will be legal tender in Malta.  

3. 

Comments on Part III ‘Powers of the Minister’ 

3.1  Article 6 of the draft law has the nature of an enabling provision, granting powers to the Minister to 

make regulations. In view of the obligation on authorities of Member States to consult the ECB on 

any draft legislative provision within its field of competence in accordance with Council Decision 

(EC) No 98/415, all relevant significant subsidiary legislation by virtue of Article 6 of the draft law 

will need to be submitted to the ECB for its opinion before it is adopted.  

3.2  Additionally, in Article 6(ii), the phrase ‘when the euro is not the currency unit of Malta’ should be 

substituted with ‘when the euro is not yet the currency of Malta’. It is clear that this provision refers 

to the dual pricing period in place before the adoption of the euro, hence such an insertion would 

clarify  the  timing  of  its  effect.  Article  6(iii)  should  either  refer  to  Article  4  of  Regulation  (EC) 

No 1103/97,  as  this  a  directly  applicable  Community  provision,  or  Article  6(iii)  of  the  draft  law 

should be deleted.  

3.3  Moreover, in view of Malta’s Treaty and international obligations vis-à-vis the adoption of the euro 

in Article 7(1) of the draft law, the ECB proposes implementation instead of compliance.  

6  

OJ L 162, 19.6.1997, p. 1. 

3 

 
 
                                                      
This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 23 February 2006. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

4