Opinion of the European Central Bank of 27 November 2012 on the introduction of the euro (CON/2012/97)
Date: 2012-11-27
Institutions: European Central Bank
Subjects: Latvia, euro, monetary integration, money, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 27 November 2012 

on the introduction of the euro 

(CON/2012/97) 

Introduction and legal basis 

On 12 November 2012, the European Central Bank (ECB) received a request from the Latvian Ministry 

of Finance for an opinion on a draft law on the introduction of the euro (hereinafter the ‘draft law’). The 

ECB was already consulted on an earlier version of the draft law and provided its observations in Opinion 
CON/2012/731. 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union and 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 provisions2, as the draft laws relate 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. 

1. 

Purpose of the draft law 

The purpose of the draft law is to prepare for the introduction of the euro in Latvia and to ensure that this 

is done in an efficient and transparent manner. In particular, the draft law determines measures related to 

the  cash  changeover,  the  exchange  of  non-cash  and  electronic  money  and  the  dual  display  of  prices  of 

goods and services. It also provides for  measures for the restatement in euro of accounting records and 

financial reports and the adjustment of financial markets for the introduction of euro. The draft law also 

contains provisions concerning the amendment and enforcement of the law.  

2. 

General observations 

The ECB welcomes the fact that the Latvian authorities have taken into account the observation  on the 

earlier version of the draft law made in paragraph 2.1 of Opinion CON/2012/73 and have clarified that the 

day  on  which  the  euro  is  introduced  in  Latvia  is  the  day  on  which  the  abrogation  of  the  derogation  in 

accordance with Article 140(2) of the Treaty enters into force.  

1 
2  

All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
 
 
                                                 
ECB-PUBLIC 

3. 

Specific observations 

Expression of amounts in legislative provisions 

3.1  With regard to the adjustment of Latvian legal acts to the introduction of the euro, the ECB notes 

that the currency of a Member State with a derogation is its national currency until the entry into 

force  of  the  Council  decision  abrogating  the  derogation  under  Article  140(2)  of  the  Treaty.  In 

accordance  with  this  principle,  the  national  authorities  should  ensure  that  the  entry  into  force  of 

national law provisions introducing amounts in euro that replace the national currency do not take 

place prior to the date of the introduction of the euro, following the Council decision abrogating the 
Member State’s derogation3. 

Rounding rules and the principle of neutrality 

3.2  Article 7  of Council Regulation (EC)  No 974/98 of 3 May 1998 on the introduction of  the  euro4 

lays  down  the  principle  that  ‘The  substitution  of  the  euro  for  the  currency  of  each  participating 

Member State shall not in itself have the effect of altering the denomination of legal instruments in 

existence on the date of substitution’ (hereinafter the ‘principle of neutrality’). Moreover, pursuant 

to Article 5 of Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating 
to the introduction of the euro5, any monetary amount to be paid or accounted for must be rounded 

up  or  down  to  the  nearest  cent.  This  provision  is  reflected  in  Article  6  and  paragraph  1  of 

Article 31(2) of the draft law. 

However,  paragraph  2  of  Article  31(2)  of  the  draft  law  also  allows  rounding  up  or  down  of  the 

converted  amount  by  a  number  of  digits  not  exceeding  the  number  of  digits  in  the  initial  legal 

provision provided that: (a) the amended legal provision is no more unfavourable for an individual 

than  the  initial  legal  norm,  save  for  the  legal  provisions  setting  fines,  and  (b)  the  substitution  of 

numerical value does not have a significant adverse effect on the state budget.  

In this regard, the ECB notes that the principle of neutrality6 does not prevent the national legislator 

from using its sovereign powers when expressing monetary amounts such as fines, fees, minimum 

capital, taxes, allowances, salaries, etc. in legislative provisions. 

Accordingly,  the  national  legislator  remains  free  to  legislate  on  the  increase  or  decrease  of  any 

monetary amounts when addressing euro changeover matters. In doing so, however, it is bound to 

act  in  accordance  with  the  principles  of  legal  certainty  and  transparency,  i.e.  it  must  ensure  that 
economic agents are able to make a clear distinction7 between a decision of the Latvian authorities 

3 
4  
5  
6  

7  

See also paragraph 3.2 of Opinion CON/2006/28 and paragraph 5.1 of Opinion CON/2007/43. 
OJ L 139, 11.5.1998, p. 1. 
OJ L 162, 19.6.1997, p. 1. 
As stated in paragraph 25 of Case C-359/05 Estager SA v Receveur principal de la recette des douanes de Brive [2007] 
ECR I-00581, ‘The principle of the continuity of legal instruments and the objective that the transition to the euro should 
be  neutral  apply  to  the  “terms”  or  to  the  “wording”  of  the  “legal  instruments”  within  the  meaning  of  Regulations 
No 1103/97 and No 974/98’. 
This  applies  not  only  to  legislative  acts,  but  also  to  implementing  measures  or  other  legal  instruments,  e.g.  collective 
agreements governing the issue of rounding of certain monetary amounts up or down to more than one cent.  

2 

 
 
                                                 
ECB-PUBLIC 

to increase or decrease any amount and the process of converting an amount into euro and rounding 
it8. 

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

Done at Frankfurt am Main, 27 November 2012. 

[signed] 

The President of the ECB 

Mario DRAGHI 

8  

In Estager, the Court of Justice held that ‘Regulations No 1103/97 No 974/98 must be interpreted as precluding national 
legislation which, on effecting the conversion into euros of an amount … raised it to an amount higher than that which 
would have resulted from application of the rules of conversion provided for in those regulations, unless such an increase 
meets the requirements of legal certainty and transparency guaranteed by those regulations, which presupposes that the 
legislative  texts  at  issue  make  it  possible  to  distinguish  clearly  the  decision  of  the  authorities  of  a  Member  State  to 
increase that amount from the operation of conversion of that amount into euros.’ See also paragraphs 34, 35 and 37 of 
the judgment in Estager. See also paragraph 3.2 of Opinion CON/2008/40.  

3