Proposal for a Council Regulation amending Regulation (EC) No 974/98 as regards the introduction of the euro in Estonia
Date: 2010-05-12
Institutions: European Commission
Subjects: EU financial instrument, Estonia, European Monetary System, euro, exchange rate, national currency

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EUROPEAN COMMISSION 

Brussels, 12.5.2010 
COM(2010) 240 final 

2010/0136 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 974/98 as regards the introduction of the euro in Estonia  

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

On  12  May  2010,  the  Commission  adopted  a  proposal  for  a  Council  Decision  in 
accordance  with  Article  140(2)  Treaty  on  the  Functioning  of  the  European  Union 
(hereinafter  the  Treaty),  indicating  that  Estonia  fulfils  the  necessary  conditions  for 
the adoption of the euro and that the derogation of Estonia is abrogated with effect 
from 1 January 2011. 

In case  of  a positive decision, the Council will subsequently have to take  the other 
measures necessary for the introduction of the euro in Estonia. 

Council  Regulation  (EC)  No  974/98  on  the  introduction  of  the  euro1  governs  the 
initial  introduction  of  the  euro  in  the  first  wave  euro-area  Member  States  and 
Greece2. This Regulation was amended by: 

- The Regulation (EC) No 2169/2005, in order to prepare for future enlargements of 
the euro area 

- The Regulation (EC) No 1647/2006, in order to cover Slovenia (which adopted the 
euro on 1 January 2007) 

-  The  Regulation  (EC)  No  835/2007,  in  order  to  cover  Cyprus  (which  adopted  the 
euro on 1 January 2008)  

- The Regulation (EC) No 836/2007, in order to cover Malta (which adopted the euro 
on 1 January 2008)  

- The Regulation (EC) No 693/2008, in order to cover Slovakia (which adopted the 
euro in January 2009). 

In order for Estonia to also be covered by Regulation (EC) No 974/98, a reference to 
this  Member  State  needs  to  be  added  to  this  Regulation.  The  present  proposal 
contains the necessary amendments to this Regulation. 

Estonia's changeover plan specifies that the so-called “big bang” scenario should be 
applicable,  i.e.  that  the  adoption  of  the  euro  as  the  currency  of  Estonia  and  the 
introduction of euro banknotes and coins in this Member State should coincide. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENT 

The  formal  procedure  following  the  Commission  proposal  for  a  Council  Decision 
involves  consultation  of  the  ECB.  Discussions  with  Member  States  on  economic 

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OJ L 139, 11.5.1998, p. 1. Regulation as last amended by Council Regulation (EC) No 1647/2006 of 7 
November 2006 (OJ L 309, 9.11.2006, p. 2). 
Cf. Council Regulation (EC) No 2596/2000 of 27 November 2000 amending Council Regulation (EC) 
No 974/98 on the introduction of the euro (OJ L 300, 29.11.2000, p, 2). 

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policy  challenges  in  Member  States  are  held  under  various  headings  on  a  regular 
basis  in  the  Economic  and  Financial  Committee  and  ECOFIN/Eurogroup.  These 
include  informal  discussions  on  issues  specifically  relevant  to  the  preparation  of 
eventual euro area entry (incl. exchange rate policies). Dialogue with academics and 
other interested groups takes place in the context of conferences/seminars and on an 
ad-hoc basis. 

Economic developments in the euro area and the Member States are assessed in the 
framework  of  the  various  procedures  of  economic  policy  co-ordination  and 
surveillance (notably under Art. 121 of the Treaty), as well as in the context of the 
Commission’s  regular  monitoring  and  analysis  of  country-specific  and  area-wide 
developments  (incl.  forecasts,  regular  publication  series,  input  to  EFC  and 
ECOFIN/Eurogroup).  In  accordance  with  the  proportionality  principle  and  in  line 
with  past  practice,  the  Commission  proposes  not  to  develop  a  formal  impact 
assessment. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Legal basis 

The legal basis for the present proposal is Article 140(3) of the Treaty, which allows 
for the adoption of the other measures necessary for the introduction of the euro in 
the Member State the derogation of which has been abrogated under Article 140(2) 
of the Treaty. 

The Council shall act with the unanimity of the Member States whose currency is the 
euro and the Member State concerned on a proposal from the Commission and after 
consulting the ECB. 

3.2. 

Subsidiarity and proportionality 

The  proposal  falls  under  the  exclusive  competence  of  the  Union.  The  subsidiarity 
principle therefore does not apply. 

The present initiative does not go beyond what is necessary to achieve its objective 
and, therefore, complies with the proportionality principle. 

3.3. 

Choice of the legal instrument 

The Regulation instrument is the only appropriate legal instrument to amend Council 
Regulation (EC) No 974/98 on the introduction of the euro. 

4. 

BUDGETARY IMPLICATION 

The proposal has no implications for the budget of the Union. 

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5. 

COMMENTARY ON INDIVIDUAL ARTICLES  

5.1. 

Article 1 

In  accordance  with  Article  1  lit.  (a)  and  with  Article  1a  of  Regulation  (EC)  No 
974/98,  the  table  in  the  Annex  to  that  Regulation  lists  the  participating  Member 
States  and  defines  the  euro  adoption  date,  the  cash  changeover  date,  and  the 
“phasing-out” period, if applicable, for all these Member States. According to Article 
1  lit.  (i)  of  Regulation  (EC)  No  974/98,  a  "phasing-out"  period  can  only  apply  to 
Member States where the euro adoption date and the cash changeover date fall on the 
same  day.  This  was  not  the  case  for  the  eleven  Member  States  which  adopted  the 
euro on 1 January 1999 and for Greece which adopted the euro on 1 January 2001. 
Slovenia, Cyprus, Malta and Slovakia's euro adoption date and cash changeover date 
coincided (1 January 2007 for Slovenia, 1 January 2008 for Cyprus and Malta and 1 
January  2009  for  Slovakia),  but  the  countries  have  chosen  not  to  have  a  "phasing-
out" period. Also Estonia's changeover plan sets the same date for the euro adoption 
date and for the cash changeover date (1 January 2011), while the country has chosen 
not to have a "phasing-out" period. 

This  Article  adds  Estonia  and  the  following  relevant  data  for  this  Member  State  to 
the table in the Annex to Regulation (EC) No 974/98 in protocol order. 

Member State 

Euro adoption date 

Cash changeover date 

Member State with a 
"phasing-out" period 

"Estonia 

1 January 2011 

1 January 2011 

No" 

5.2. 

Article 2 

This  Article  sets  the  date  of  entry  into  force  of  the  Regulation  at  1  January  2011, 
ensuring that it will be applicable in conformity with the timing of the other Council 
acts relating to the adoption of the euro by Estonia, i.e. the date of the abrogation of 
the  derogation  and  the  date  of  the  entry  into  force  of  the  conversion  rate  of  the 
Estonian kroon. 

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2010/0136 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 974/98 as regards the introduction of the euro in Estonia  

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 140(3) thereof, 

Having regard to the proposal from the European Commission3, 

Having regard to the opinion of the European Central Bank4, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

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Council Regulation (EC) No  974/98 of 3 May 1998 on the introduction  of the euro5 
provides for the substitution of the euro for the currencies of the Member States which 
fulfilled  the  necessary  conditions  for  the  adoption  of  the  euro  at  the  time  when  the 
Community entered the third stage of economic and monetary union. 

Council  Regulation  (EC)  No  2596/20006  amended  Regulation  (EC)  No  974/98  to 
provide for the substitution of the euro for the currency of Greece. 

Council  Regulation  (EC)  No  2169/20057  amended  Regulation  (EC)  No  974/98  in 
order to prepare for subsequent introductions of the euro in Member States which have 
not yet adopted the euro as the euro. 

Council  Regulation  (EC)  No  1647/20068  amended  Regulation  (EC)  No  974/98  to 
provide for the substitution of the euro for the currency of Slovenia.  

Council  Regulation  (EC)  No  835/20079  amended  Regulation  (EC)  No  974/98  to 
provide for the substitution of the euro for the currency of Cyprus. 

Council  Regulation  (EC)  No  836/200710  amended  Regulation  (EC)  No  974/98  to 
provide for the substitution of the euro for the currency of Malta. 

OJ C […], […], p. […] 
OJ C […], […], p. […]. 
OJ L 139, 11.5.1998, p. 1. Regulation as last amended by Council Regulation (EC) No xxx/2007 (OJ L, 
, p.). 
OJ L 300, 29.11.2000, p. 2. 
OJ L 346, 29.12.2005, p. 1. 
OJ L 309, 9.11.2006, p. 2. 
OJ L 186, 18.07.2007, p.1. 

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(7) 

(8) 

(9) 

Council  Regulation  (EC)  No  693/200911  amended  Regulation  (EC)  No  974/98  to 
provide for the substitution of the euro for the currency of Slovakia. 

According to Article 4 of the 2003 Act of Accession, Estonia is a Member State with a 
derogation  as  defined  in  Article  139(1)  of  the  Treaty  on  the  Functioning  of  the 
European Union (hereinafter the Treaty). 

Pursuant to Council Decision 2010/…/EC of … … 2010 on the adoption by Estonia of 
the euro on 1 January 201112, Estonia fulfils the necessary conditions for the adoption 
of  the  euro  and  the  derogation  in  favour  of  Estonia  is  abrogated  with  effect  from 
1 January 2011. 

(10)  The introduction of the euro in Estonia requires the extension to Estonia of the existing 
provisions on the introduction of the euro set out in Regulation (EC) No 974/98. 

(11)  Estonia's changeover plan specifies that euro banknotes and coins should become legal 
tender in that Member State on the day of the introduction of the euro as its currency. 
Consequently, the euro adoption date and the cash changeover date shall be 1 January 
2011. No “phasing-out” period should apply. 

(12)  Regulation (EC) No 974/98 should therefore be amended accordingly, 

HAS ADOPTED THIS REGULATION: 

The Annex to Regulation (EC) No 974/98 shall be amended in accordance with the Annex to 
this Regulation. 

Article 1 

Article 2 

This Regulation shall enter into force on 1 January 2011. This Regulation shall be binding in 
its entirety and directly applicable in all Member States.  

Done at Brussels, 

For the Council 
The President 

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OJ L 186, 18.07.2007, p.3. 
OJ L 195, 24.07.2008, p. 1. 
OJ L […], […], p. […]. 

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ANNEX 

In the Annex to Regulation (EC) No 974/98, the following line is inserted between the entries 
for Germany and Greece.  

Member State 

Euro adoption date 

Cash changeover date 

Member  State  with  a 
"phasing-out" period 

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

"Estonia 

1 January 2011 

1 January 2011 

No" 

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