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The other institutions and bodies of the Union

The other institutions and bodies of the Union

Outline of the Community (European Union) legislation about The other institutions and bodies of the Union

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Institutional affairs > Building europe through the treaties > The Lisbon Treaty: a comprehensive guide

The other institutions and bodies of the Union

The Treaty of Lisbon undertakes a vast institutional reform which mainly concerns the European Council, the Commission, the Council, the Parliament and the Court of Justice. To a lesser extent, the Treaty of Lisbon also makes a number of changes relating to the composition and functioning of the EU’s two advisory committees. It also awards the European Central Bank the status of institution.

THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE

The number of seats for Member States within the Committee is limited to 350. The distribution of these seats between Member States is no longer included in the Treaty of Lisbon, as was the case previously. As it is required to do henceforth for the distribution of seats in the Parliament, the Council unanimously adopts a decision laying down rules on the composition of the Committee. Moreover, the Treaty of Lisbon extends the term of office of members of the Committee from 4 to 5 years, bringing it into line with that of members of the Commission and the Parliament. Consequently, the Committee chairman and officers will now be elected by their peers for two and a half years rather than for two years.

As part of its advisory role, the Economic and Social Committee may henceforth issue opinions following a referral from the European Parliament.

THE COMMITTEE OF THE REGIONS

As with the European Economic and Social Committee, the number of seats within the Committee of the regions is limited to 350 and the distribution of seats by Member State must be the subject of a unanimous Council decision. The members of the Committee of the Regions are henceforth appointed for a term of five years, instead of four, while its chairman and officers are elected for two and a half years.

In addition, the Treaty of Lisbon strengthens the advisory role of the Committee of the Regions by extending its area of activity. Civil protection, climate change, energy and services of general interest are therefore added to the list of fields in which the Committee is to be consulted. On the same basis as the Commission and the Council, the European Parliament is also authorised to seek an opinion from the Committee of the Regions.

The Committee of the Regions also has new powers within the EU as a result of the possibility of bringing two types of action before the Court of Justice of the EU. On the one hand, the Committee becomes one of the guarantors of the principle of subsidiarity within the EU. It may bring an action before the Court of Justice seeking the annulment of an act deemed not to comply with the principle of subsidiarity (Article 8 of the Protocol on the application of the principles of subsidiarity and proportionality). However, this right of referral is limited to acts for which the Committee has to be consulted. On the other hand, Article 263 of the Treaty on the Functioning of the EU authorises the Committee to bring an action before the Court of Justice of the EU for the purpose of protecting its own prerogatives. It therefore has legal means which henceforth enable it to ensure that the EU institutions respect its right to be consulted.

THE EUROPEAN CENTRAL BANK

The ECB is granted the status of EU institution on the same basis as the European Council, the Parliament, the Council, the Commission, the Court of Justice and the Court of Auditors. It thereby becomes the only institution granted legal personality.

It is run by three main bodies:

  • the Governing Council of the ECB, which comprises the members of the Executive Board and the governors of the national central banks of the Euro zone countries. It is the main decision-making body and defines the monetary policy of the Euro zone;
  • the Executive Board, the six members of which are henceforth appointed by the European Council acting by a qualified majority in order to limit the risks of blocking;
  • the General Council, which comprises the members of the Executive Board and the governors of the central banks of all Member States.

The Treaty of Lisbon also clarifies the two principal missions of the ECB:

  • the ECB and the central banks of the EU Member States form the European System of Central Banks (ESCB). The main objective of the ESCB is to maintain price stability. It also contributes to the general economic policies of the Union;
  • the ECB and the central banks of Member States which have adopted the Euro make up the Eurosystem. In contrast with the ESCB, the Eurosystem defines and conducts the monetary policy of the Union. Until now, ‘Eurosystem’ was a term used informally by the ECB. It is henceforth fully recognised by the Treaty of Lisbon.

The Treaty of Lisbon finally reaffirms the independence of the ECB. This independence is guaranteed by the relatively long term of office of the members of the Executive Board (eight years) and by the prohibition banning the ECB and the national central banks from accepting instructions from the other EU institutions, governments of Member States or any other body.

SUMMARY TABLE

Articles Subject

Treaty on the Functioning of the European Union

282 to 284

Composition and prerogatives of the European Central Bank

301 to 304

Composition and prerogatives of the European Economic and Social Committee

305 to 307

Composition and prerogatives of the Committee of the Regions

Enforcing judgments: the transparency of debtors' assets

Enforcing judgments: the transparency of debtors’ assets

Outline of the Community (European Union) legislation about Enforcing judgments: the transparency of debtors’ assets

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Justice freedom and security > Judicial cooperation in civil matters

Enforcing judgments: the transparency of debtors’ assets

Even with a court judgment obtained, recovering cross-border debts may be difficult for creditors in practice if no information on the debtors’ assets or whereabouts is available. Because of this, the European Commission has adopted a Green Paper launching a public consultation on how to improve the recovery of debts through possible measures such as registers and debtor declarations.

Document or Iniciative

Green Paper of 6 March 2008 on the effective enforcement of judgments in the European Union: the transparency of debtors’ assets [COM(2008) 128 final – Not published in the Official Journal].

Summary

The late and non-payment of debts is detrimental to business and customers alike, particularly when no information is available on the debtor’s assets or whereabouts. This is a particular cross-border issue in debt recovery and has the potential to affect the smooth running of the internal market. In launching a public consultation, the European Commission has outlined the problems of the current situation and possible solutions in this Green Paper. Interested parties can submit their comments by 30 September 2008.

State of play

The search for a debtor’s address and information on his financial situation is often the starting point for enforcement proceedings. At national level, most Member States mainly use two different systems for obtaining information, either:

  • systems of declaration of the debtor’s entire assets or at least a part of it to satisfy the claim;
  • search systems with specific information (registers).

In this Green Paper, the European Commission focuses more on a series of measures instead of one single European measure to allow the creditor to obtain reliable information on the debtor’s assets and whereabouts within a reasonable period of time. Possible measures include:

  • drawing up a manual of national enforcement laws and practices: at present, there is very little information on the different enforcement systems in the 27 European Union Member States. Such a manual could contain all sources of information on a person’s assets, which could be accessed in each country; contact addresses, costs, etc.
  • increasing the information available and improving access to registers: the main sources of information on the debtor are public registers, such as commercial or population registers. However, these vary from one Member State to the next. The Commission is asking whether to increase information available in and access to commercial registers and in what way access to existing population registers should be enhanced. Furthermore, access to social security and tax registers by enforcement authorities may be increased, while respecting rules of data protection and social and fiscal privacy.
  • exchange of information between enforcement authorities: currently, enforcement bodies are not able to directly access the (non-public) registers of other Member States which are open to national enforcement bodies. In addition, there are no international instruments dealing with the exchange of information between national enforcement bodies. In the absence of a Europe-wide register, enhancing cooperation between national enforcement authorities and direct exchange of information between them may a possible solution.
  • measures relating to the debtor’s declaration: enforcement bodies have in several Member States the option to question the debtor directly regarding his assets, whereas in some Member States the debtor’s declaration is made in the form of a testimony before the enforcement court. In some Member States, the debtor has to fill out mandatory forms, and in others a debtor’s declaration does not exist at all. The European Commission is considering introducing a European Assets declaration, obliging the debtors to disclose all assets in the European judicial area. In this way, the transparency of the debtor’s assets would not be limited by the territoriality of the enforcement proceedings.

Application of minimum reserves by the ECB

Application of minimum reserves by the ECB

Outline of the Community (European Union) legislation about Application of minimum reserves by the ECB

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Institutional and economic framework of the euro

Application of minimum reserves by the ECB

Document or Iniciative

Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum reserves by the European Central Bank [Official Journal L 318 of 27.11.1998] [See amending acts].

Summary

This Regulation ensures that the minimum reserve arrangements applicable to credit institutions and their branches in Member States are the same throughout the euro area. Minimum reserves as a monetary policy instrument are used mainly to stabilise interest rates and to dampen autonomous fluctuations in money market liquidity by adjusting reserve requirements. The Regulation first sets out definitions of the following terms:

  • institution: any entity in a participating Member State which the European Central Bank (ECB) may require to hold minimum reserves;
  • reserve ratio: such percentage of the basis for minimum reserves as the ECB may specify in accordance with Article 19.1 of its Statute. Reserve ratios must not exceed 10% of any relevant liabilities forming part of the basis for minimum reserves but may be 0%. This approach reflects the need to give the ECB the necessary flexibility to carry out its tasks and takes into account the reserve ratios imposed by the national central banks which currently require reserves to be set up. At the same time, the Regulation seeks to ensure that the system of minimum reserves is the same throughout the euro area. In this way, it will not lead to the relocation of credit institutions;
  • sanctions: fines, periodic penalty payments, penalty interest and non-interest-bearing deposits.

Giving practical effect to the ESCB Statute

The Regulation is necessary to give practical effect to Article 19.2 of the Statute of the European System of Central Banks (ESCB), which provides that “the Council shall define the basis for minimum reserves “(i.e. deposits, debt securities issued, money market instruments) “and the maximum permissible ratios between those reserves and their basis, as well as the appropriate sanctions in cases of non-compliance”.

Exemptions and collection of information

The ECB may, on a non-discriminatory basis, exempt institutions from minimum reserves in accordance with its own criteria. It has the right to collect and to verify the information necessary for the application of minimum reserves. The right to verify data includes the right to:

  • require the submission of documents;
  • examine the books and records of the institutions;
  • take copies or extracts from such books and records;
  • obtain written or oral explanations.

This right makes for a proper balance between the rights of the institutions subject to the obligations and the needs of the ECB in performing its tasks. The ECB may also delegate the exercise of these rights to the national banks.

Sanctions

Where institutions fail to meet the obligations laid down in the Regulation and ECB regulations or decisions associated with it, the ECB may impose one of the following sanctions:

  • a payment of up to 5 percentage points above the ESCB’s marginal lending rate applied to the amount of the minimum reserves which the relevant institution fails to provide;
  • a payment of twice the ESCB’s marginal lending rate applied to the amount of the minimum reserves which the relevant institution fails to provide;
  • the requirement for the relevant institution to establish a non-interest-bearing deposit with the ECB or the national central banks of up to three times the amount of the minimum reserves which the relevant institution fails to provide. The maturity of the deposit must not exceed the period during which the institution fails to hold the minimum reserves.

Entry into force

Article 5 of the Regulation, which concerns regulatory power (right to exempt institutions, basis for minimum reserves, reserve ratios), has been applicable from the date of entry into force of the Regulation, i.e. 27 November 1998. The other articles have been applicable since 1 January 1999, the date of entry into force of the third stage of economic and monetary union.

Regulation (EC) No 134/2002

This Regulation extends to two months the period for the Governing Council to take a decision in order to implement the review procedure referred to in Article 3 (7) of Regulation (EC) No 2532/98.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 2531/98

27.11.1998

OJ L 318 of 27.11.1998

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 134/2002

26.1.2002

OJ L 24 of 26.1.2002

Related Acts

Regulation (EC) No of the European Central Bank of 19 December 2008 concerning the balance sheet of the monetary financial institutions sector (Recast) [Official Journal L 15 of 20 January 2009].
Monetary financial institutions (MFI) are subject to the requirement to report on their consolidated accounts to the European Central Bank (ECB). These institutions are known as credit institutions or financial institutions that receive deposits, grant loans and make investments in securities for their own accounts. They are mainly central banks, credit institutions (which can be an electronic money institution within the meaning of Directive 2006/48/EC) and monetary collective investment undertakings (CIUs) or money market funds.

Monthly and annual statistical reporting is used to calculate the reserve base of the ECB. The reporting requirement can be reduced for small MFIs, MMFs and electronic money institutions, which are considered as non-financial corporations.

This Regulation establishes additional statistical reporting requirements for securitisation transactions and loan disposal (regarding the net flow of securitised or disposed of loans and the end-of-quarter and end-of-period amounts outstanding).

Regulation (EC) No of the European Central Bank of 12 September 2003 on the application of minimum reserves (ECB/2003/9) [Official Journal L 250 of 2.10.2003].
This Regulation lays down the definitions, the methods for calculating and creating obligatory reserves, and reporting and verification rules. It will replace Regulation (EC) No 2818/98 with effect from 23 January 2004 and with effect from 9 March 2004 for certain provisions of Article 5. The new Regulation groups together in a single text the provisions of the old regulation and the significant amendments thereto and introduces new amendments concerning:

  • the deposit of reserves in the national central banks of the euro area;
  • the methods for calculating and creating reserves;
  • the reporting and verification rules;
  • the timetable for the maintenance periods;
  • procedures for the notification and acknowledgement of minimum reserves.

See consolidated version ( )

Introduction of the euro

Decision of the European Central Bank of 28 October 2008 on the transitional provisions for the application of the minimum reserves by the European Central Bank following the introduction of the euro in Slovakia (ECB/2008/14).

Regulation (EC) No 1348/2007 of the European Central Bank of 9 November 2007 concerning transitional provisions for the application of minimum reserves by the European Central Bank following the introduction of the euro in Cyprus and Malta (ECB/2007/11).

Regulation (EC) No of the European Central Bank of 2 November 2006 concerning transitional provisions for the application of minimum reserves by the European Central Bank following the introduction of the euro in Slovenia(ECB/2006/15).

Regulation (EC) No of the European Central Bank of 2 November 2000 concerning transitional provisions for the application of minimum reserves by the European Central Bank following the introduction of the euro in Greece (ECB/2000/11) [Official Journal L 291 of 18.11.2000].

Collection of statistical information by the European Central Bank

Collection of statistical information by the European Central Bank

Outline of the Community (European Union) legislation about Collection of statistical information by the European Central Bank

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Institutional and economic framework of the euro

Collection of statistical information by the European Central Bank

Document or Iniciative

Council Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical information by the European Central Bank [Official Journal L 318 of 27.11.1998] [See amending acts].

Summary

The European Central Bank (ECB) has the right to collect statistical information within the limits of the reference reporting population and of what is necessary to carry out the tasks of the European System of Central Banks (ESCB).

The reference reporting population comprises:

  • legal and natural persons residing in a Member State and falling within the sector of “financial institutions” (as defined in the European System of National and Regional Accounts (ESA) 1995);
  • post office giro institutions;
  • legal and natural persons residing in a Member State insofar as they hold cross-border positions or have carried out cross-border transactions;
  • legal and natural persons residing in a Member State insofar as they have issued securities or electronic money;
  • legal and natural persons residing in a participating * Member State who hold financial positions vis-à-vis residents from other participating Member States or who have carried out financial transactions with residents from other participating Member States.

The ECB must specify the actual reporting population, using existing statistics as far as possible and exempting specific classes of reporting agents.

Member States are responsible for their own tasks in the collection of statistics and are required to cooperate fully with the ESCB.

The ECB has regulatory power with regard to the definition and imposition of its statistical reporting requirements on the reporting agents *.

If a reporting agent residing in a participating Member State is suspected of an infringement of the statistical reporting requirements to the ECB, the ECB has the right to verify the accuracy and quality of the statistical information and to carry out its compulsory collection. It has the right to:

  • require submission of documents;
  • examine the books and records of the reporting agents;
  • take copies or extracts from such books and records; and
  • obtain written or oral explanations.

The ECB or the competent national central bank must notify the reporting agent in writing of its decision to verify statistical information or to collect it compulsorily. Data will be collected in accordance with national procedures. When a reporting agent opposes the verification process, the participating Member State in which the reporting agent’s premises are located must give the necessary assistance, including ensuring access to the reporting agent’s premises by the ECB or the national central bank.

Reporting agents resident in a participating Member State who fail to comply with their statistical reporting requirements may be subject to the following sanctions by the ECB:

  • if no statistical information is received by the ECB or national central bank by the established deadline, a daily penalty payment not exceeding EUR 10 000, with the total fine not exceeding EUR 100 000;
  • if the statistical information is incorrect, incomplete or in a form not complying with the requirements, a fine not exceeding EUR 200 000;
  • if a reporting agent obstructs the tasks of the ECB or national central bank by preventing physical access to his premises, a fine not exceeding EUR 200 000.

The ECB is required to act in accordance with the principles and procedures set out in Regulation (EC) No 2532/98 on the powers of the ECB to impose sanctions.

The statistical information is considered confidential when it allows reporting agents and any other legal person, natural person, entity or branch to be identified, either directly from their name or address or from an officially allocated identification code, or indirectly through deduction.

Reporting agents must be informed of the statistical and other administrative uses to which statistical information provided by them may be put. They can obtain information on the legal basis for transmission and on the adopted protection measures

The ESCB must use confidential statistical information exclusively for carrying out the ESCB’s tasks ESCB except:

  • if the reporting agent or the other legal person, natural person, entity or branch which can be identified has explicitly given its consent to the use of the statistical information for other purposes;
  • for their transmission to other ESS members;
  • for granting scientific research bodies access to confidential statistical information which does not allow direct identification and with the previous explicit consent of the authority which provided the information;
  • for the use of information by the national central banks in the field of prudential supervision or for the exercise of functions in accordance with the Statutes of the ESCB and the ECB.

The ECB and the national central banks must take all the necessary regulatory, administrative, technical and organisational measures to ensure the protection of confidential statistical information. Member States must take all the necessary measures to ensure confidentiality, including the imposition of enforcement measures and appropriate sanctions in the event of an infringement.

Key terms of the act

  • Participating Member State: an EU Member State which has adopted the single currency and is part of the euro zone;
  • Reporting agents: legal and natural persons and the entities referred to in Article 2 of Regulation (EC) No 2533/98, which are subject to the ECB’s statistical reporting requirements.

References

Act

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EC) No 2533/98

1.1.1999

27.11.1998 (articles 5, article 6 paragraph 4 and article 8 paragraph 9)

OJ L 318 of 27.11.1998

Amending act(s)

Entry into force

Deadline for transposition in the Member States

Official Journal

Regulation (EC) No 951/2009

15.10.2009

Official Journal L 269 of 14.10.2009

Related Acts

Regulation 290/2009 of the European Central Bank of 31 March 2009 amending Regulation (EC) No 63/2002 (ECB/2001/18) concerning statistics on interest rates applied by monetary financial institutions to deposits and loans vis-à-vis households and non-financial corporations (ECB/2009/7).

Regulation (EC) No 25/2009 of the European Central Bank of 19 December 2008 concerning the balance sheet of the monetary financial institutions sector (Recast) (ECB/2008/32).

Regulation (EC) No 24/2009 of the European Central Bank of 19 December 2008 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions (ECB/2008/30).

Regulation (EC) No 1053/2008 of the European Central Bank of 23 October 2008 on temporary changes to the rules relating to eligibility of collateral (ECB/2008/11).

Regulation (EC) No 958/2007 of the European Central Bank of 27 July 2007 concerning statistics on the assets and liabilities of investment funds (ECB/2007/8).

Regulation (EC) No 63/2002 of the European Central Bank of 20 December 2001 concerning statistics on interest rates applied by monetary financial institutions to deposits and loans vis-à-vis households and non-financial corporations (ECB/2001/18).

Regulation (EC) No 2819/98 of the European Central Bank of 1 December 1998 concerning the consolidated balance sheet of the monetary financial institutions sector (ECB/1998/16).

Introduction of the euro

Regulation (EC) No 1348/2007 of the European Central Bank of 9 November 2007 concerning transitional provisions for the application of minimum reserves by the European Central Bank following the introduction of the euro in Cyprus and Malta (ECB/2007/11).

Regulation (EC) No 1637/2006 of the European Central Bank of 2 November 2006 concerning transitional provisions for the application of minimum reserves by the European Central Bank following the introduction of the euro in Slovenia (ECB/2006/15).

Regulation (EC) No 2548/2000 of the European Central Bank of 2 November 2000 concerning transitional provisions for the application of minimum reserves by the European Central Bank following the introduction of the euro in Greece (ECB/2000/11).

Minimum reserves

Regulation (EC) No 1745/2003 of the European Central Bank of 12 September 2003 on the application of minimum reserves (ECB/2003/9).111

European Central Bank Regulation (EC) No 2157/1999 of 23 September 1999 on the powers of the European Central Bank to impose sanctions (ECB/1999/4).

Economic and Financial Committee

Economic and Financial Committee

Outline of the Community (European Union) legislation about Economic and Financial Committee

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Economic and monetary affairs > Institutional and economic framework of the euro

Economic and Financial Committee

Acts

Council Decision 98/743/EC of 21 December 1998 on the detailed provisions concerning the composition of the Economic and Financial Committee.
Council Decision 1999/8/EC of 31 December 1998 adopting the Statutes of the Economic and Financial [See amending acts].

Summary

The Maastricht Treaty provides for an economic and financial committee to be set up at the start of the third stage of Economic and Monetary Union (EMU), which began on 1 January 1999.

Composition and tasks of the Economic and Financial Committee

The Council is to adopt detailed provisions concerning the composition of the Committee, bearing in mind that the Member States, the Commission and the European Central Bank (ECB), are each to appoint two members of the Committee. They may also appoint two alternate members.

Under Article 114 (2) and (4) of the Treaty establishing the European Community (EC Treaty), the Committee’s tasks are:

  • to keep under review the economic and financial situation of the Member States and the Community and to report regularly to the Council and the Commission on this subject, in particular on financial relations with third countries and international institutions;
  • to contribute to the preparation of the work of the Council, particularly as regards recommendations required as part of multilateral surveillance (Article 99) and decisions required as part of the excessive deficit procedure (Article 101).

The Committee may also prepare the Council’s reviews of the exchange rate of the euro (Article 207). It may be consulted in the procedure leading to decisions relating to the exchange-rate mechanism of the third stage of Economic and Monetary Union (ERM II), and may provide the framework for the dialogue between the Council and the ECB at the level of senior officials from ministries, national central banks, the Commission and the ECB.

Given the importance of those tasks, it is essential that members of the Committee and alternate members be selected from among experts possessing outstanding competence in the economic and financial field. The two members appointed by each Member State must be selected from among senior officials from the administration (ministerial level) and the national central bank.

Adapting the Economic and Financial Committee in the light of EU enlargement

With a view to the enlargement of the EU on 1 May 2004, the statutes of the Economic and Financial Committee were amended in 2003. A new Article 4 was inserted, which provides for the Committee to meet in two different configurations:

  • either with the members selected from the administrations, the national central banks, the Commission and the ECB;
  • or with the members from administrations, the Commission and the ECB.

The Committee in its full composition will regularly review the list of the issues on which the national central bank members are expected to attend the meetings. This measure is necessary in order to ensure that the expertise and analytical insight of the national central banks are available to the Committee without its work being hampered by too many participants.

Taking decisions on a majority basis

If a vote is requested, decisions are to be adopted by a majority of the members but, in the case of questions on which the “Economic and Financial Affairs” Council (Ecofin Council) may subsequently take a decision, members from national central banks and the Commission will not participate in the vote. The Committee will also report on minority or dissenting views expressed in the course of the discussion. A member who is unable to attend a meeting of the Committee may delegate his/her right to vote to one of the alternates or another member.

The Committee has a President elected by a majority of its members. The two-year term of office is renewable. The President represents the Committee, including in its relations with the European Parliament. The President’s voting right is delegated to his/her alternate and, if indisposed, the President is replaced by the Vice-President of the Committee.

Where alternates replace members, they have the right to vote. As a general rule, alternate members may attend committee meetings, but do not vote or participate in discussions. The Committee may decide to amend this.

The Committee is convened at the initiative of the President, or at the request of the Commission, the Council or four of its members.

Committee deliberations are confidential.

The Committee may entrust the study of specific questions to its alternate members, to subcommittees or to working parties. It is also assisted by a secretariat.

References

Act Entry into force and expiry date Deadline for transposition in the Member States Official Journal
Decision 98/743/EC 1.1.1999 OJ L 358, 31.12.1998
Decision 1999/8/EC 1.1.1999 OJ L 5, 9.1.1999
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Decision 2003/476/EC 01.07.2003 OJ L 158, 27.6.2003

Agreements on monetary relations

Agreements on monetary relations

Outline of the Community (European Union) legislation about Agreements on monetary relations

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Institutional and economic framework of the euro

Agreements on monetary relations (Monaco, San Marino, the Vatican and Andorra)

Acts

Monaco

Council Decision 1999/96/EC of 31 December 1998 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Principality of Monaco.

San Marino

Council Decision 1999/97/EC of 31 December 1998 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Republic of San Marino.

The Vatican

Council Decision 1999/98/EC of 31 December 1998 on the position to be taken by the Community regarding an agreement concerning the monetary relations with Vatican City.

Council Decision 2003/738/EC of 7 October 2003 on the adoption of amendments to be made to the Monetary Agreement between the Italian Republic and the Vatican City State.

Andorra

Council Decision 2004/548/EC of 11 May 2004 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Principality of Andorra.

Council Decision 2004/750/EC of 21 October 2004 on the opening of the negotiations on an agreement concerning monetary relations with the Principality of Andorra.

Summary

SITUATION BEFORE THE INTRODUCTION OF THE EURO

MONACO

France has particular monetary links with Monaco which are based on various legal instruments and whereby, before the introduction of the euro, notes and coins issued by France were legal tender in Monaco. Coins issued by Monaco were legal tender only there. Monaco does not have a currency or central bank of its own.

Financial institutions located in Monaco had access to – but had never used – the refinancing facilities of the Banque de France under the same conditions as French banks. They also participated in certain French payment systems on the same terms. Similarly, they are subject to the same minimum reserve and statistical reporting requirements. They are also supervised by the competent French authorities.

SAN MARINO

Italy has concluded several agreements with San Marino containing provisions on monetary matters to the effect that notes and coins issued by Italy were legal tender in San Marino. With the exception of gold coins, coins issued by San Marino had the same shape, size and composition as coins circulating in Italy. The agreements limited the number of such coins that could be issued; these coins were legal tender in San Marino and in Italy. San Marino has undertaken not to issue any notes, coins or monetary surrogates of any kind. It does not have a currency or central bank of its own even though the Instituto di Credito Sammarinese performs functions similar to those of a central bank.

Financial institutions located in San Marino do not have access to the refinancing facilities of the Bank of Italy. Only one of them participates in Italy’s real-time gross settlement system (RTGS).

THE VATICAN

Italy also has particular monetary links with the Vatican that are based on an agreement whereby coins issued by Italy were legal tender in the Vatican. Notes issued by the Bank of Italy were not legal tender but, in practice, circulated on Vatican territory. Coins other than gold coins issued by the Vatican had the same shape, size and composition as coins circulating in Italy. The agreement limited the number of such coins that could be issued; these were legal tender in the Vatican and in Italy. The Vatican does not have a currency or central bank of its own.

Financial institutions located in the Vatican do not have access to the refinancing facilities of the Bank of Italy or to Italy’s national real-time gross settlement system. They are not subject to supervision by the Italian authorities.

GENERAL PROVISIONS OF THE COUNCIL DECISIONS

On 1 January 1999 the euro became the currency of France and of Italy. The European System of Central Banks (ESCB) is responsible for formulating monetary policy. In their present form, the agreements are not compatible with the allocation of competence laid down in the Maastricht Treaty for monetary and exchange-rate matters. New agreements must, therefore, be concluded between the Community, Monaco, San Marino and the Vatican.

These decisions stipulate that Monaco, San Marino and the Vatican could be authorised, subject to an agreement with the Community, to use the euro as their official currency.

They must undertake not to issue any notes, coins or monetary surrogates unless this is expressly provided for in the agreement.

Monaco, San Marino and the Vatican must comply with the Community rules governing euro notes and coins and, in particular, copyright, the exchange of damaged notes and the reproduction of notes and coins. They must also cooperate with the Community in protecting euro notes and coins against counterfeiting.

The Community may authorise financial institutions located in Monaco, San Marino and the Vatican to have access to some or all of the national payment systems in France and Italy. Such a decision can be taken only with the consent of the European Central Bank (ECB).

France and Italy are conducting the negotiations and will conclude the agreements in accordance with Article 111(3) of the EC Treaty.

France and Italy will submit the draft agreement to the Economic and Financial Committee for its opinion. If the Commission or the ECB, each of which will be fully associated with the negotiations, or the Economic and Financial Committee considers that the agreement must be submitted to the Council, the agreement will be concluded only once the Council has taken a decision in accordance with Article 111(3) of the EC Treaty.

Any bilateral agreement must be compatible not only with the allocation of competence laid down in the Maastricht Treaty for monetary and exchange-rate matters but also with the agreements already concluded between the Community and Monaco, San Marino and the Vatican.

Decision 2003/738/EC

This decision authorises Italy to amend the Monetary Convention concluded between the Italian Republic and the Vatican and to raise the total face value of the euro coins which the Vatican is allowed to issue each year to EUR 1 000 000 (from EUR 670 000).

ANDORRA

On 15 July 2003 Andorra formally requested the conclusion of a monetary agreement with the Community that would allow it to officially grant the euro legal-tender status and to issue banknotes, coins and collector coins.

Before the introduction of the euro, French and Spanish banknotes and coins were used as a quasi-official currency without having legal-tender status. They were replaced by the euro in 2002. In its decision of 11 May 2004, the Council adopted the position to be taken in the negotiations which the Commission will conduct on behalf of the Community.

The Commission formally recommended the opening of negotiations on 9 August 2004 since all the conditions had been met. Firstly, the Agreement providing for measures equivalent to those laid down in Council Directive 2003/48/EC on taxation of savings income in the form of interest payments was signed in Brussels on 1 July 2004. Secondly, Andorra notified the Commission in writing of its intention to ratify this Agreement before 30 April 2005.

On 21 October 2004, the Council adopted a decision stating that the necessary conditions for the opening of the negotiations with the Principality of Andorra have been fulfilled. The European Commission informed Andorra of the Community’s readiness to conclude an agreement on monetary matters and proposed negotiations for such an agreement.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Decision 1999/96/EC 31.12.1998 OJ L 30 of 4.2.1999
Decision 1999/97/EC 31.12.1998 OJ L 30 of 4.2.1999
Decision 1999/98/EC 31.12.1998 OJ L 30 of 4.2.1999
Decision 2003/738/EC 7.10.2003 OJ L 267 of 17.10.2003
Decision 2004/548/EC 11.5.2004 OJ L 244 of 16.7.2004
Decision 2004/750/EC 6.11.2004 OJ L 332 of 6.11.2004

Related Acts

MONACO

Monetary Agreement between the Government of the French Republic, on behalf of the European Community, and the Government of His Serene Highness the Prince of Monaco [Official Journal L 142 of 31.5.2002].

Since 1 January 1999 the Principality of Monaco has been entitled to use the euro as its official currency. It does not have the right to issue euro banknotes. Since 1 January 2002 it has been entitled to issue euro coins with an annual volume of 1/500th of the quantity of coins minted in France. The coins are identical to other euro coins with respect to the face value, legal-tender status and the technical characteristics and artistic features of the common side. The Community authorities will be notified of the design characteristics of the national side. The Principality is allowed to issue euro collector coins, but these are not legal tender in the Community.

SAN MARINO

Monetary Agreement between the Italian Republic, on behalf of the European Community, and the Republic of San Marino [Official Journal C 209 of 27.7.2001].

Since 1 January 1999 the Republic of San Marino has been entitled to use the euro as its official currency. It does not issue banknotes, coins or monetary surrogates of any kind, with the exception of the limited number of euro coins specified in the Agreement. It is allowed to mint euro coins up to a maximum annual face value of EUR 1 944 000. The coins are identical to other euro coins with respect to the face value, legal-tender status and the technical characteristics and artistic features of the common side. The Community authorities will be notified of the design characteristics of the national side. The Agreement does not alter the right of the Republic to continue to issue gold coins denominated in scudi. The Republic is allowed to issue euro collector coins, but neither these nor the gold coins denominated in scudi are legal tender in the Community.

The Vatican

Monetary Agreement between the Italian Republic, on behalf of the European Community, and the Vatican City State and, on its behalf, the Holy See [Official Journal C 299 of 25.10.2001].

Since 1 January 1999 the Vatican City State has been entitled to use the euro as its official currency. It does not issue banknotes, coins or monetary surrogates of any kind, with the exception of the limited number of euro coins specified in the Agreement. It was allowed to mint euro coins up to a maximum annual face value of EUR 670 000. In the year in which a vacancy occurs in the Holy See, in a Jubilee Year or in the year of the opening of an Ecumenical Council, it could issue additional coins to the value of EUR 201 000. The coins are identical to other euro coins with respect to the face value, legal-tender status and the technical characteristics and artistic features of the common side. The Community authorities are to be notified of the design characteristics of the national side. The Vatican is allowed to issue euro collector coins, but these are not legal tender in the Community.

The amending agreement was signed on 22 December 2003 and entered into force on 1 January 2004. The Vatican is authorised to issue euro coins for a maximum annual face value of EUR 1 000 000. In the year when the Holy See becomes vacant and in each Jubilee Year, the Vatican may issue additional coins totalling a maximum of EUR 300 000.

CHARACTERISTICS OF THE EURO COINS

Communication from the Commission – The visual characteristics of the euro coins [COM(2001) 776 final – Official Journal C 373 of 28.12.2001].

The communication provides a detailed description of euro coins (artistic features of the different national sides and the common side) and photographs of the different coins, including the ones from Monaco, San Marino and the Vatican.

Agreements concerning the French territorial communities

Agreements concerning the French territorial communities

Outline of the Community (European Union) legislation about Agreements concerning the French territorial communities

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Economic and monetary affairs > Institutional and economic framework of the euro

Agreements concerning the French territorial communities

Document or Iniciative

Council Decision 1999/95/EC of 31 December 1998 concerning the monetary arrangements in the French territorial communities of Saint-Pierre-et-Miquelon and Mayotte.

Summary

Saint-Pierre-et-Miquelon and Mayotte are French territorial communities (collectivités territoriales). Their currency is the French franc, and French franc banknotes and coins have legal tender status on their territories. Banknotes and coins are put into circulation by the Institut d’Emission des Départements d’Outre Mer (IEDOM) in both communities (from 1 January 1999 in Mayotte). It also offers refinancing facilities and imposes compulsory reserve requirements.

The two territories do not form part of the Community. Since the Treaty does not specify which monetary regime is applicable to these regions, if no measure is taken, the monetary legislation of the euro area and the other Community provisions relating to Economic and Monetary Union will not apply to these territories. It is therefore necessary for the Council to specify, in a decision addressed to France, the monetary regime which should apply in these French territorial communities.

France must ensure that the same means of payment which have legal tender status in metropolitan France will have legal tender status in Saint-Pierre-et-Miquelon and Mayotte. It must also reform the status and role of the IEDOM, in order to achieve compatibility with the tasks assigned to the European System of Central Banks (ESCB) by the Treaty. France must also ensure the application, in the two territorial communities, of those parts of present and future Community law which are necessary for the functioning of Economic and Monetary Union.

When the European Central Bank (ECB) and the national central banks grant refinancing facilities to financial institutions located in these communities, they follow the rules governing the monetary functions and operations of the ESCB, and the issue of banknotes, as laid down in its Statute. The national central bank responsible for carrying out these activities in the two territorial communities is the Bank of France.

References

Act Entry into force Deadline for transposition in the Member States Official Journal
Decision 1999/95/EC 01.01.1999 OJ L 30 of 04.02.1999

Enlargement of the euro area: adjustment of voting arrangements in the Governing Council of the ECB

Enlargement of the euro area: adjustment of voting arrangements in the Governing Council of the ECB

Outline of the Community (European Union) legislation about Enlargement of the euro area: adjustment of voting arrangements in the Governing Council of the ECB

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Institutional affairs > The institutions bodies and agencies of the union

Enlargement of the euro area: adjustment of voting arrangements in the Governing Council of the ECB

Document or Iniciative

Decision 2003/223/EC of the Council, meeting in the composition of the Heads of State or Government of 21 March 2003 on an amendment to Article 10.2 of the Statute of the European System of Central Banks and of the European Central Bank [Official Journal L 83 of 1.4.2003].

Summary

This Decision establishes the voting rules for the Governing Council of the European Central Bank (ECB). It introduces a voting rotation system in order to ensure fair and effective decision-making.

Governing Council

The Governing Council is one of the three decision-making bodies of the ECB. The other two bodies are the Executive Board and the General Council.

The Governing Council is the main decision-making body. In particular, it defines the monetary policy for the euro area.

Furthermore, the Governing Council is composed of six members from the Executive Board and governors of the central banks of Member States in the euro area. The number of governors therefore increases each time a new Member State adopts the euro.

A voting rotation system by groups

As from the date on which the number of members of the Governing Council exceeds 21, the voting arrangements will be adjusted.

The total number of voting rights is thus limited to 21. The six members of the Executive Board will continue to have permanent voting rights. The governors will share the remaining 15 voting rights, which will rotate among them.

Governors are therefore allocated to groups which will differ with respect to the frequency with which their members have voting rights. The groups will be formed in accordance with a ranking of Member States and national central banks. This ranking will be based on:

  • the share in the aggregate gross domestic product at market prices (GDP mp) of the Member States in the euro area;
  • the share in the total aggregated balance sheet of the monetary financial institutions of the Member States in the euro area.

These indicators will ensure objectivity since they are the most objective reflection of the size of the overall economy and recognise the specific relevance of the financial sector of the participating Member States.

Furthermore, this Decision provides for the voting rotation system to be implemented in two stages.

Stage one: Voting rights when the number of governors exceeds 15

As from the date on which the number of governors exceeds 15, and until it reaches 22, the governors will be allocated to two groups. The first group will be composed of the five governors of the national central banks of the Member States with the biggest shares in the euro area total according to the indicators described above. The second group will be composed of all the other governors.

The five governors in the first group will share four voting rights and the remaining governors in the second group will share 11. The governors in the first group cannot have lower voting frequencies than those in the second group.

Stage two: Voting rights when the number of governors exceeds 22

As from the date on which the number of governors exceeds 22, the governors will be allocated to three groups. The first group will be composed of the five governors of the national central banks of the Member States with the biggest shares in the euro area total. The second group will be composed of half the total number of governors. Governors in this group will come from the national central banks of the Member States holding the subsequent positions in the country ranking based on the above criteria. The third group will be composed of all the other governors.

Four voting rights will then be assigned to the first group, eight to the second and three to the third. When there are 27 euro area Member States, the voting frequency of the first group will be 80 %, that of the second 57 % and that of the third 38 %.

Within each group, the governors will have their voting rights for equal amounts of time. The Governing Council will take the operational measures necessary for the implementation of this principle.

Adjustment to economic developments and future changes

Whenever the number of governors increases, or at each adjustment of aggregate GDP mp (required every five years), the composition of the groups will be adjusted in line with any changes. Any such adjustments will apply as from the day on which the governor(s) join the Governing Council.

Any decision which is necessary to implement the operational details of the rotation system will, with the exception of the new voting arrangements, be adopted by all members of the Governing Council, irrespective of whether or not they hold a voting right at the time of the decision, by a two-thirds majority.

Context

Before being able to introduce the euro, Member States must fulfil a number of economic and financial conditions known as ‘convergence criteria’.

Currently, only 17 of the 27 Member States have met these criteria and have therefore been able to adopt the euro as a single currency. The other Member States are subject to derogations until they too meet the criteria. Denmark and the United Kingdom are subject to exemptions as they do not currently intend to adopt the euro.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Decision No 2003/223/EC

After ratification by the Member States

OJ L 83, 1.4.2003