Explanatory Memorandum to COM(2014)325 - Amendment of Regulation (EC) No 974/98 as regards the introduction of the euro in Lithuania - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2014)325 - Amendment of Regulation (EC) No 974/98 as regards the introduction of the euro in Lithuania. |
|---|---|
| source | COM(2014)325  |
| date | 04-06-2014 |
On 4 June 2014, the Commission released 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 Lithuania fulfils the necessary conditions for the adoption of the euro and that the derogation of Lithuania is abrogated with effect from 1 January 2015.
In case of a positive decision, the Council will subsequently have to take the other measures necessary for the introduction of the euro in Lithuania.
Council Regulation (EC) No 974/98 on the introduction of the euro[1] governs the initial introduction of the euro in the first wave euro-area Member States and Greece[2]. 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)
- The Regulation (EU) No 670/2010, in order to cover Estonia (which adopted the euro in January 2011)
- The Regulation (EU) No 678/2013, in order to cover Latvia (which adopted the euro in January 2014).
In order for Lithuania 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.
Lithuania'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 Lithuania and the introduction of euro banknotes and coins in this Member State should coincide.
Contents
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 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.
3.1. 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.
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, Estonia and Latvia's euro adoption date and cash 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, 1 January 2014 for Latvia), but the countries have chosen not to have a 'phasing-out' period. Also Lithuania's Euro National Changeover Plan sets the same date for the euro adoption date and for the cash changeover date (1 January 2015), while the country has chosen not to have a 'phasing-out' period.
This Article adds Lithuania 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
"Lithuania| 1 January 1 January No"
5.2. Article 2
This Article sets the date of entry into force of the Regulation at 1 January 2015, ensuring that it will be applicable in conformity with the timing of the other Council acts relating to the adoption of the euro by Lithuania, i.e. the date of the abrogation of the derogation and the date of the entry into force of the conversion rate of the Lithuanian litas.