Proposal for a COUNCIL REGULATION amending Regulation (EC) No 974/98 as regards the introduction of the euro in Latvia
Date: 2013-06-05
Institutions: European Commission
Subjects: Euro Group (euro area), Latvia, euro, monetary union

EUROPEAN 
COMMISSION 

Brussels, 5.6.2013  
COM(2013) 337 final 

2013/0176 (NLE) 

Proposal for a 

COUNCIL REGULATION 

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

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

On  5  June  2013,  the  Commission  adopted  a  proposal  for  a  Council  Decision  in 
accordance  with  Article  140(2)  of  the  Treaty  on  the  Functioning  of  the  European 
Union (hereinafter the Treaty), indicating that Latvia fulfils the necessary conditions 
for the adoption of the euro and that the derogation of Latvia is abrogated with effect 
from 1 January 2014. 

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

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

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

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

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

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

Regulation  (EU)  No  670/2010,  in  order  to  cover  Estonia  (which  adopted  the 
euro in January 2011). 

In order for Latvia 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. 

Latvia's  National  Euro  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 
Latvia 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 
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 

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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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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 Article 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. 

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,  Slovakia  and  Estonia's  euro  adoption  date  and  cash 

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changeover date coincided (1 January 2007 for Slovenia, 1 January 2008 for Cyprus 
and  Malta,  1  January  2009  for  Slovakia,  1  January  2011  for  Estonia),  but  the 
countries  have  chosen  not  to  have  a  "phasing-out"  period.  Also  Latvia's  Euro 
National Changeover Plan sets the same date for the euro adoption date and for the 
cash changeover date (1 January 2014), while the country has chosen not to have a 
"phasing-out" period. 

This Article adds Latvia 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 

"Latvia 

1 January 2014 

1 January 2014 

No" 

5.2. 

Article 2 

This  Article  sets  the  date  of  entry  into  force  of  the  Regulation  at  1  January  2014, 
ensuring that it will be applicable in conformity with the timing of the other Council 
acts relating to the adoption of the euro by Latvia, i.e. the date of the abrogation of 
the  derogation  and  the  date  of  the  entry  into  force  of  the  conversion  rate  of  the 
Latvian lats. 

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2013/0176 (NLE) 

Proposal for a 

COUNCIL REGULATION 

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

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) 

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. 

According to Article 4 of the 2003 Act of Accession, Latvia 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 2013/…/EU of … … 2013 on the adoption by Latvia of 
the euro on 1 January 20146, Latvia fulfils the necessary conditions for the adoption of 
the  euro  and  the  derogation  in  favour  of  Latvia  is  to  be  abrogated  with  effect  from 
1 January 2014. 

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

Latvia's  National  Euro  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 2014. No “phasing-out” period should apply. 

(6) 

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

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OJ C […], […], p. […] 
OJ C […], […], p. […] 
OJ C […], […], p. […] 
OJ L […], […], p. […] 

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HAS ADOPTED THIS REGULATION: 

Article 1 

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

This Regulation shall enter into force on 1 January 2014. 

Article 2 

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

ANNEX 

Member State 

Euro adoption date 

Cash changeover date 

Member  State  with  a 
"phasing-out" period 

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

"Latvia 

1 January 2014 

1 January 2014 

No" 

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