Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro

Author:Secretariat General
Profession:Council of the European Union
Pages:204-216
SUMMARY

Part I: Definitions- Article 1- Article 1a- Part II: Substitution of the Euro for the Currencies of the Participating Member States- Article 2- Article 3- Article 4 Part III: Transitional Provisions- Article 5 Articles 6, 7, 8 and 9 shall apply during the transitional period.- Article 6- Article 7- Article 8- Article 9- Article 9a Part IV: Euro Banknotes and Coins- Article 10- Article 11- Article 12- Part V: Final Provisions- Article 13- Article 14 Article is- Article 16- Part VI: Entry Into Force- Article 17- Annex

 
INDEX
CONTENT

Page 204

Amended by73:

- Council Regulation (EC) No 2596/2000 of 27 November 2000 74

- Council Regulation (EC) No 2169/2005 of 21 December 200575

- Council Regulation (EC) No 1647/2006 of 7 November 2006 76

[No 974/98 of 3 May 1998]

THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 1091(4), third sentence thereof,

Having regard to the proposal from the Commission 77,

Having regard to the opinion of the European Monetary Institute 78,

Having regard to the opinion of the European Parliament 79,

(1) Whereas this Regulation denes monetary law provisions of the Mem ber States which have adopted the euro; whereas provisions on continuity of contracts, the replacement of references to the ecu in legal instruments by references to the euro and rounding have already been laid down in Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro 80; whereas the introduction of the euro concerns day-to-day operations of the whole population in participating Member States; whereas measures other than those in this Regulation and in Regulation (EC) No 1103/97 should be examined to ensure a balanced changeover, in particular for consumers;

(2) Whereas, at the meeting of the European Council in Madrid on 15 and 16 December 1995, the decision was taken that the term 'ecu' by the Treaty to refer to the European currency unit is a generic term; whereas the Governments of the 15 Member States have reached the common agreement that this decision is the agreed and denitive interpretation of the relevant Treaty provisions; whereas the name given to the European currency shall be the 'euro'; whereas the euro as the currency of the participating Member States shall be dividedPage 205 into one hundred sub-units with the name 'cent'; whereas the denition of the name 'cent' does not prevent the use of variants of this term in common usage in the Member States; whereas the European Council furthermore considered that the name of the single currency must be the same in all the ocial languages of the European Union, taking into account the existence of dierent alphabets;

(3) Whereas the Council when acting in accordance with the third sentence of Article 1091(4) of the Treaty shall take the measures necessary for the rapid introduction of the euro other than the adoption of the conversion rates;

(4) Whereas whenever under Article 1092) of the Treaty a Member State becomes a participating Member State, the Council shall according to Article 1091(5) of the Treaty take the other measures necessary for the rapid introduction of the euro as the single currency of this Member State;

(5) Whereas according to the rst sentence of Article 1091(4) of the Treaty the Council shall at the starting date of the third stage adopt the conversion rates at which the currencies of the participating Member States shall be irrevocably xed and at which irrevocably xed rate the euro shall be substituted for these currencies;

(6) Whereas given the absence of exchange rate risk either between the euro unit and the national currency units or between these national currency units, legislative provisions should be interpreted accordingly;

(7) Whereas the term 'contract' used for the denition of legal instruments is meant to include all types of contracts, irrespective of the way in which they are concluded;

(8) Whereas in order to prepare a smooth changeover to the euro a trans itional period is needed between the substitution of the euro for the currencies of the participating Member States and the introduction of euro banknotes and coins; whereas during this period the national currency units will be dened as subdivisions of the euro; whereas thereby a legal equivalence is established between the euro unit and the national currency units;

(9) Whereas in accordance with Article i09g of the Treaty and with Regula tion (EC) No 1103/97, the euro will replace the ecu as from 1 January 1999 as the unit of account of the institutions of the European Communities; whereas the euro should also be the unit of account of the European Central Bank (ECB) and of the central banks of the participating Member States; whereas, in line with the Madrid conclusions, monetary policy operations will be carried out in the euro unit by the European System of Central Banks (ESCB); whereas this does not prevent national central banks from keeping accounts in their national currency unit during the transitional period, in particular for their sta and for public administrations;Page 206

(10) Whereas each participating Member State may allow the full use of the euro unit in its territory during the transitional period;

(11) Whereas during the transitional period contracts, national laws and other legal instruments can be drawn up validly in the euro unit or in the national currency unit; whereas during this period, nothing in this Regulation should aect the validity of any reference to a national currency unit in any legal instrument;

(12) Whereas, unless agreed otherwise, economic agents have to respect the denomination of a legal instrument in the performance of all acts to be carried out under that instrument;

(13) Whereas the euro unit and the national currency units are units of the same currency; whereas it should be ensured that payments inside a participat ing Member State by crediting an account can be made either in the euro unit or the respective national currency unit; whereas the provisions on payments by crediting an account should also apply to those cross-border payments, which are denominated in the euro unit or the national currency unit of the account of the creditor; whereas it is necessary to ensure the smooth function ing of payment systems by laying down provisions dealing with the crediting of accounts by payment instruments credited through those systems; whereas the provisions on payments by crediting an account should not imply that nan cial intermediaries are obliged to make available either other payment facilities or products denominated in any particular unit of the euro; whereas the provi sions on payments by crediting an account do not prohibit nancial interme diaries from coordinating the introduction of payment facilities denominated in the euro unit which rely on a common technical infrastructure during the transitional period;

(14) Whereas in accordance with the conclusions reached by the European Council at its meeting held in Madrid, new tradeable public debt will be issued in the euro unit by the participating Member States as from 1 January 1999; whereas it is desirable to allow issuers of debt to redenominate outstand ing debt in the euro unit; whereas the provisions on redenomination should be such that they can also be applied in the jurisdictions of third countries; whereas issuers should be enabled to redenominate outstanding debt if the debt is denominated in a national currency unit of a Member State which has redenominated part or all of the outstanding debt of its general government; whereas these provisions do not address the introduction of additional meas ures to amend the terms of outstanding debt to alter, among other things, the nominal amount of outstanding debt, these being matters subject to relevant national law; whereas it is desirable to allow Member States to take appropri ate measures for changing the unit of account of the operating procedures of organised markets;Page 207

(15) Whereas further action at the Community level may also be necessary to clarify the eect of the introduction of the euro on the application of existing provisions of Community law, in particular concerning netting, set-o and techniques of similar eect;

(16) Whereas any obligation to use the euro unit can only be imposed on the basis of Community legislation; whereas in transactions with the public sector participating Member States may allow the use of the euro unit; whereas in accordance with the reference scenario decided by the European Council at its meeting held in Madrid, the Community legislation laying down the time frame for the generalisation of the use of the euro unit might leave some free dom to individual Member States;

(17) Whereas in accordance with Article 105a of the Treaty the Council may adopt measures to harmonise the denominations and technical specications of all coins;

(18) Whereas banknotes and coins need adequate protection against counter feiting;

(19) Whereas banknotes and coins denominated in the national currency units lose their status of legal tender at the latest six months after the end of the transitional period; whereas limitations on payments in notes and coins, established by Member States for public reasons, are not incompatible with the status of legal tender of euro banknotes and coins, provided that other lawful means for the settlement of monetary debts are available;

(20) Whereas as from the end of the transitional period references in legal instruments existing at the end of the transitional period will have to be read as references to the euro unit according to the respective conversion rates; whereas a physical redenomination of existing legal instruments is therefore not necessary to achieve this result; whereas the rounding rules dened in Regulation (EC) No 1103/97 shall also apply to the conversions to be made at the end of the transitional period or after the transitional period; whereas for reasons of clarity it maybe desirable that the physical redenomination will take place as soon as appropriate;

(21) Whereas paragraph 2 of Protocol 11 on certain provisions relating to the United Kingdom of Great Britain and Northern Ireland stipulates that, inter alia, paragraph 5 of that Protocol shall have eect if the United Kingdom noti es the Council that it does not intend to move to the third stage; whereas the United Kingdom gave notice to the Council on 30 October 1997 that it does not intend to move to the third stage; whereas paragraph 5 stipulates that, inter alia, Article 1091(4) of the Treaty shall not apply to the United Kingdom;

(22) Whereas Denmark, referring to paragraph 1 of Protocol 12 on certain pro visions relating to Denmark has notied, in the context of the Edinburgh deci sion of 12 December 1992, that it will not participate in the third stage; whereas,Page 208 therefore, in accordance with paragraph 2 of the said Protocol, all Articles and provisions of the Treaty and the Statute of the ESCB referring to a derogation shall be applicable to Denmark;

(23) Whereas, in accordance with Article 1091(4) of the Treaty, the single cur rency will be introduced only in the Member States without a derogation;

(24) Whereas this Regulation, therefore, shall be applicable pursuant to Article 189 of the Treaty, subject to Protocols 11 and 12 and Article i09k(i), [No 2169/2005 of 21 December 2005]

(3) Regulation (EC) No 974/98 sets out a timetable for transition to the euro in the Member States currently participating. In order to provide clarity and certainty with regard to the rules governing the Introduction of the euro in other Member States, it is necessary to lay down general provisions specifying how the various periods in the transition to the euro are to be determined in the future.

(4) It is appropriate to provide for a list of participating Member States which maybe extended when further Member States adopt the euro as the single currency.

(5) In order to prepare a smooth changeover the the euro, Regulation (EC) No 374/98 provides for a transitional period between the substitution of the euro for the currencies of the participating Member States and the introduction of euro banknotes and coins. The transitional period should last three years at the most, but should be as short as possible.

(6) The transitional period can be reduced to zero, in which case the euro adoption date and the cash changeover date fall on the same day, if a Member State considers that a longer transitional period is not necessary. In that case, euro banknotes and coins will become legal tender in that Member State on the euro adoption date. However, it should be possible for such a Member State to benet from a "phasing-out" period of one year, during which it would be pos sible to continue to make reference to the national currency unit in new legal instruments. This would give economic actors in such a Member State more time to adapt to the introduction of the euro and threfore ease the transition.

(7) It should be possible for the general public to exchange banknotes and coins denominated in the national currency unit for euro banknotes and coins free of charge during the dual circulation period, subject to certain cellings.Page 209

HAS ADOPTED THIS REGULATION:

Part I: Definitions
Article 1

For the purpose of this Regulation:

(a) 'participating Member States' shall mean the Member States listed in the table in the Annex;

(a) 'legal instruments' shall mean legislative and statutory provisions, acts of administration, judicial decisions, contracts, unilateral legal acts, pay ment instruments other than banknotes and coins, and other instruments with legal eect;

(b) 'conversion rate' shall mean the irrevocably xed conversion rate adopted for the currency of each participating Member State by the Council in accordance with the rst sentence of Article 123(4) of the Treaty or with paragraph 5 of that Article;

(c) 'euro adoption date' shall mean either the date on which the respective Member State enters the third stage under Article 121(3) of the Treaty or the date on which the abrogation of the respective Member State's dero gation under Article 122(2) of the Treaty enters into force, as the case may be;

(d) 'cash changeover date' shall mean the date on which euro banknotes and coins acquire the status of legal tender in a given participating Member State;

(e) 'euro unit' shall mean the currency unit as referred to in the second sen tence of Article 2;

(f) 'national currency units' shall mean the units of the currency of a par ticipating Member State, as those units are dened on the day before the adoption of the euro in that Member State;

(h) 'transitional period' shall mean a period of three years at the most beginning at 00.00 hours on the euro adoption date and ending at 00.00 hours on the cash changeover date;

(i) 'phasing-out period' shall mean a period of one year at the most beginning on the euro adoption date, which can only apply to Member States where the euro adoption date and the cash changeover date fall on the same day;Page 210

(j) 'redenominate' shall mean changing the unit in which the amount of outstanding debt is stated from a national currency unit to the euro unit, but which does not have through the act of redenomination the eect of altering any other term of the debt, this being a matter subject to relevant national law;

(k) 'credit institutions' shall mean credit institutions as dened in Article 1(1) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions 81. For the purpose of this Regulation, the institutions listed in Article 2(3) of that Directive with the exception of post oce giro institutions shall not be considered as credit institutions.

Article 1a

The euro adoption date, the cash changeover date, and the phasing-out period, if applicable, for each participating Member State shall be as set out in the Annex.

Part II: Substitution of the Euro for the Currencies of the Participating Member States
Article 2

With eect from the respective euro adoption dates, the currency of the participating Member States shall be the euro. The currency unit shall be one euro. One euro shall be divided into one hundred cent.

Article 3

The euro shall be substituted for the currency of each participating Member State at the conversion rate.

Article 4

The euro shall be the unit of account of the European Central Bank (ECB) and of the central banks of the participating Member States.Page 211

Part III: Transitional Provisions
Article 5 Articles 6, 7, 8 and 9 shall apply during the transitional period
Article 6

1) The euro shall also be divided into the national currency units according to the conversion rates. Any subdivision thereof shall be maintained. Subject to the provisions of this Regulation the monetary law of the participating Mem ber States shall continue to apply.

2) Where in a legal instrument reference is made to a national currency unit, this reference shall be as valid as if reference were made to the euro unit accord ing to the conversion rates.

Article 7

The substitution of the euro for the currency of each participating Member State shall not in itself have the eect of altering the denomination of legal instruments in existence on the date of substitution.

Article 8

1) Acts to be performed under legal instruments stipulating the use of or denominated in a national currency unit shall be performed in that national currency unit. Acts to be performed under legal instruments stipulating the use of or denominated in the euro unit shall be performed in that unit.

2) The provisions of paragraph 1 are subject to anything which parties may have agreed.

3) Notwithstanding the provisions of paragraph 1, any amount denominated either in the euro unit or in the national currency unit of a given participating Member State and payable within that Member State by crediting an account of the creditor, can be paid by the debtor either in the euro unit or in that national currency unit. The amount shall be credited to the account of the creditor in the denomination of his account, with any conversion being eected at the conversion rates.Page 212

4) Notwithstanding the provisions of paragraph 1, each participating Member State may take measures which may be necessary in order to:

- redenominate in the euro unit outstanding debt issued by that Member State's general government, as dened in the European system of integ rated accounts, denominated in its national currency unit and issued under its own law. If a Member State has taken such a measure, issuers may redenominate in the euro unit debt denominated in that Member State's national currency unit unless redenomination is expressly excluded by the terms of the contract; this provision shall apply to debt issued by the gen eral government of a Member State as well as to bonds and other forms of securitised debt negotiable in the capital markets, and to money market instruments, issued by other debtors,

(a) enable the change of the unit of account of their operating procedures from a national currency unit to the euro unit by:

(b) markets for the regular exchange, clearing and settlement of any instru ment listed in section B of the Annex to Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities eld 82 and of commodities; and

- systems for the regular exchange, clearing and settlement of payments.

  1. Provisions other than those of paragraph 4 imposing the use of the euro unit may only be adopted by the participating Member States in accordance with any time-frame laid down by Community legislation.

  2. National legal provisions of participating Member States which permit or impose netting, set-o or techniques with similar eects shall apply to monetary obligations, irrespective of their currency denomination, if that denomination is in the euro unit or in a national currency unit, with any conversion being eected at the conversion rates.

Article 9

Banknotes and coins denominated in a national currency unit shall retain their status as legal tender within their territorial limits as from the day before the euro adoption date in the participating Member State concerned.Page 213

Article 9a

The following shall apply in a Member State with a 'phasing-out' period. In legal instruments created during the phasing-out period and to be performed in that Member State, reference may continue to be made to the national currency unit. These references shall be read as references to the euro unit according to the respective conversion rates. Without prejudice to Article 15, the acts performed under these legal instruments shall be performed only in the euro unit. The rounding rules laid down in Regulation (EC) No 1103/97 shall apply.

The Member State concerned shall limit the application of the rst subparagraph to certain types of legal instrument, or to legal instruments adopted in certain elds.

The Member State concerned may shorten the period.

Part IV: Euro Banknotes and Coins
Article 10

With eect from the respective cash changeover dates, the ECB and the central banks of the participating Member States shall put into circulation banknotes denominated in euro in the participating Member States.

Without prejudice to Article 15, these banknotes denominated in euro shall be the only banknotes which have the status of legal tender in participating Member States.

Article 11

With eect from the respective cash changeover date, the participating Member States shall issue coins denominated in euro or in cent and complying with the denominations and technical specications which the Council may lay down in accordance with the second sentence of Article 106(2) of the Treaty. Without prejudice to Article 15 and to the provisions of any agreement under Article 111(3) of the Treaty concerning monetary matters, those coins shall be the only coins which have the status of legal tender in participating Member States. Except for the issuing authority and for those persons specically designated by the national legislation of the issuing Member State, no party shall be obliged to accept more than 50 coins in any single payment.Page 214

Article 12

Participating Member States shall ensure adequate sanctions against counterfeiting and falsication of euro banknotes and coins.

Part V: Final Provisions
Article 13

Articles 10, 11, 14, 15 and 16 shall apply with eect from the respective cash changeover date in each participating Member State.

Article 14

Where, in legal instruments existing on the day before the cash changeover date, reference is made to the national currency units, these references shall be read as references to the euro unit according to the respective conversion rates. The rounding rules laid down in Regulation (EC) No 1103/97 shall apply.

Article is

1) Banknotes and coins denominated in a national currency unit as referred to in Article 6(1) shall remain legal tender within their territorial limits until six months from the respective cash changeover date at the latest; this period may be shortened by national law.

2) Each participating Member State may, for a period of up to six months from the respective cash changeover date, lay down rules for the use of the banknotes and coins denominated in its national currency unit as referred to in Article 6(1) and take any measures necessary to facilitate their withdrawal.

3) During the period referred to in paragraph 1, credit institutions in particip ating Member States adopting the euro after 1 January 2002 shall exchange their customers' banknotes and coins denominated in the national currency unit of that Member State for banknotes and coins in euro, free of charge, up to a ceiling which may be set by national law. Credit institutions may require that notice be given if the amount to be exchanged exceeds a ceiling set by national law or, in the absence of such provisions, by themselves and corresponding to a household amount.

The credit institutions referred to in the rst subparagraph shall exchange banknotes and coins denominated in the national currency unit of that MemberPage 215

State of persons other than their customers, free of charge up to a ceiling set by national law or, in the absence of such provisions, by themselves.

National law may limit the obligation under the preceding two subparagraphs to specic types of credit institutions. National law may also extend this obligation upon other persons.

Article 16

In accordance with the laws or practices of participating Member States, the respective issuers of banknotes and coins shall continue to accept, against euro at the conversion rate, the banknotes and coins previously issued by them.

Part VI: Entry Into Force
Article 17

This Regulation shall enter into force on 1 January 1999.

This Regulation shall be binding in its entirety and directly applicable in all Member States, in accordance with the Treaty, subject to Protocols 11 and 12 and Article 109k(i).Page 216

Annex

Member State Euro adoption date Cash changeover date Member State with a 'phasing-out' period
Belgium 1 January 1999 1 January 2002 n/a
Germany 1 January 1999 1 January 2002 n/a
Greece 1 January 2001 1 January 2002 n/a
Spain 1 January 1999 1 January 2002 n/a
France 1 January 1999 1 January 2002 n/a
Ireland 1 January 1999 1 January 2002 n/a
Italy 1 January 1999 1 January 2002 n/a
Luxembourg 1 January 1999 1 January 2002 n/a
Netherlands 1 January 1999 1 January 2002 n/a
Austria 1 January 1999 1 January 2002 n/a
Portugal 1 January 1999 1 January 2002 n/a
Slovenia 1 January 2007 1 January 2007 No
Finland 1 January 1999 1 January 2002 n/a

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[74] OJ L 300, 29.11.2000, p. 2.

[75] OJ L 346, 29.12.2005, p. 1.

[76] OJ L 309, 9.11.2006, p. 2.

[77] OJ C 369, 7.12.1996, p. 10.

[78] OJ C2O5,5(7)i997, P-18.

[79] OJ C 380,16.12.1996, p. 50.

[80] OJ L 162,19.6.1997, p. 1.

[81] OJ L 126, 26.5.2000, p. 1. Directive as last amended by Directive 2005/1/EC of the European Parliament and of the Council (OJ L 79, 24.3.2005, p. 9).

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