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Greece's membership in the single currency

Greece’s membership in the single currency

Outline of the Community (European Union) legislation about Greece’s membership in the single currency

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

Greece’s membership in the single currency

Document or Iniciative

Council Decision of 19 June 2000 in accordance with Article 122(2) of the Treaty on the adoption by Greece of the single currency on 1 January 2001 [Official Journal L 167 of 7 July 2000].

Summary

At the time of the transition to the third stage of economic and monetary union (EMU), Greece did not fulfil the convergence criteria (Decision No 98/317/EC) and was covered by a derogation laid down in Article 122 of the Treaty. Every two years, or at the request of the Member State concerned, a report by the Commission and the European Central Bank (ECB) examined whether the convergence criteria were met. Greece requested that the derogation be repealed on 9 March 2000.

In its decision, the Council took the view in the light of the Commission and ECB report that:

  • Greece fulfilled the criterion relating to the average rate of inflation; during the previous year, the inflation rate reached 2 %, which was lower than the reference value (2.4 %);
  • Greece was not the subject of a decision on the existence of an excessively high government deficit (Decision 2000/33/EC), as the annual government deficit did not exceed the reference value (3 % of GDP) and the government debt ratio was approaching the reference value (60 % of GDP) at a satisfactory rate;
  • Greece had been a member of the exchange-rate mechanism of the European Monetary System (EMS) and subsequently of ERM II for two years without devaluing its currency’s central rate;
  • Greece met the criterion of the long-term interest rate; over the previous year, the interest rate reached 6.4 %, which was lower than the reference value (7.2 %);
  • Greek domestic legislation, including the statute of the national central bank, was compatible with the Treaty and the Statute of the European System of Central Banks (ESCB).

The Council therefore considered that Greece had achieved a high level of sustainable convergence and that it fulfilled the necessary conditions for the adoption of the single currency. The derogation relating to Greece was repealed on 1 January 2001.

References

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

Council Decision 2000/427/EC

01.01.2001

OJ L 167 of 07.07.2000

Related Acts

Council Regulation (EC) No 1478/2000 of 19 June 2000 amending Council Regulation (EC) No 2866/98 on the conversion rates between the euro and the currencies of the Member States adopting the euro.

By this Regulation, the Council set the conversion rate between the Greek drachma and the euro at 340.750 drachmas per euro, as of 1 January 2001.