The European Council conrms that i January 1999 will be the starting date for Stage III of economic and monetary union, in accordance with the conver gence criteria, timetable, protocols and procedures laid down in the Treaty.
The European Council conrms that a high degree of economic convergence is a precondition for the Treaty objective to create a stable single currency.
The name of the new currency is an important element in the preparation of the transition to the single currency, since it partly determines the public acceptability of economic and monetary union. The European Council con siders 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 dier ent alphabets; it must be simple and symbolise Europe.
The European Council therefore decides that, as of the start of Stage III, the name given to the European currency shall be euro. This name is meant as a full name, not as a prex to be attached to the national currency names.
The specic name euro will be used instead of the generic term 'ecu' used by the Treaty to refer to the European currency unit.
The Governments of the 15 Member States have achieved the common agreement that this decision is the agreed and denitive interpretation of the relevant Treaty provisions.
As a decisive step in the clarication of the process of introduction of the single currency, the European Council adopts the changeover scenario attached in Annex 1 58 which is based on the scenario elaborated at its request by the Council, in consultation with the Commission and the European MonetaryPage 195 Institute. It notes with satisfaction that the scenario is compatible with the EMI report on the changeover.
The scenario provides for transparency and acceptability, strengthens credibility and underlines the irreversibility of the process. It is technically feasible and aims to provide for the necessary legal certainty, to minimise adjustment costs and to avoid competitive distortions. Under the scenario, the Council, in the composition of Heads of State or Government, will conrm as early as possible in 1998 which Member States full the necessary conditions for the adoption of the single currency. The European Central Bank (ECB) will have to be created early enough so as to allow preparations to be completed and full operation to start on 1 January 1999.
Stage III will begin on 1 January 1999 with the irrevocable xing of conversion rates among the currencies of participating countries and against the euro. From that date, monetary policy and the foreign exchange rate policy will be conducted in euro, the use of the euro will be encouraged in foreign exchange markets and new tradable public debt will be issued in euro by the participating Member States.
A Council Regulation, whose technical preparatory work shall be com pleted at the latest by the end of 1996, will enter into force on 1 January 1999 and provide the legal framework for the use of the euro, which, from this date, will become a currency in its own right, and the ocial ecu basket will cease to exist. This regulation will establish, as long as dierent monetary units still exist, a legally enforceable equivalence between the euro and the national units.
The substitution of the euro for national currencies should not of itself alter the continuity of contracts, unless otherwise provided in the contract. In the case of contracts denominated by reference to the ocial ecu basket of the Euro pean Community, in accordance with the Treaty, substitution by the euro will be at the rate of one to one, unless otherwise provided in the contract.
By 1 January 2002 at the latest, euro banknotes and coins will start to circu late alongside national notes and coins. At most six months later, the national currencies will have been completely replaced by the euro in all participating Member States, and the changeover will be complete. Thereafter, national bank notes and coins may still be exchanged at the national Central Banks.
The European Council calls on the Econ Council to speed up all the addi tional technical work necessary to implement the changeover scenario adopted today. The labelling of euro banknotes and coins in the dierent alphabets of the Union will also be dened.Page 196
 OJ C 22,26.1.1996, p. 2.