Resolution of the European Council on economic policy coordination in Stage III of EMU and on Articles 109 and 109b of the EC Treaty

Author:Secretariat General
Profession:Council of the European Union

II. Implementing the Treaty provisions on the exchange rate policy, external position and representation of the Community (Article 109 of the Treaty)


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(The rest of the resolution is quoted in Chapter 2 of this publication 'Economic policy coordination, 2.1. General framework')

II Implementing the Treaty provisions on the exchange rate policy, external position and representation of the Community (Article 109 of the Treaty)
  1. The91 European Council recognises the responsibility which will fall to the Community with the introduction of the euro, one of the major currencies in the world monetary system. The contribution of the Community through the ESCB, in strict accordance with the competences and procedures established by the Treaty, will be to provide a centre of price stability. For its part, the European Council is resolved to play its full part in helping to lay the founda tions for a prosperous and ecient economy in the Community, in accordance with the principle of an open economy with free competition, favouring an ecient allocation of resources, and in compliance with the principles set out in Article 3a of the Treaty. The European Council is convinced that this will provide the basis for a currency which is strong and respected.

  2. The Council should monitor the development of the exchange rate of the euro in the light of a wide range of economic data. The Commission should provide analyses to the Council, and the Economic and Financial Committee should prepare the Council's reviews. It is important to make full use of the Treaty provisions to ensure an exchange of information and views between the Council and the ECB on the exchange rate of the euro. While in general exchange rates should be seen as the outcome of all other economic policies, the Council may, in exceptional circumstances, for example in the case of a clear misalignment, formulate general orientations for exchange rate policy in relation to non-EC currencies in accordance with Article 109(2) of the Treaty.

    These general orientations should always respect the independence of theESCB and be consistent with the primary objective of the ESCB to maintain price stability.

  3. The Council should decide on the position of the Community at interna tional level as regards issues of particular relevance to economic and monetary union, in accordance with Article 109(4) of the Treaty. These positions will be relevant both to bilateral relations between the European Union and individualPage 244 third countries and to proceedings in international organisations or informal international groupings. The scope of this provision is necessarily limited as only euro-area Member States vote under Article 109.

  4. The Council and the European Central Bank will carry out their tasks in representing the Community at international level in an ecient manner and in compliance with the allocation of powers laid down in the Treaty. On elements of economic policy other than monetary and exchange rate policy, the Member States should continue to present their policies outside the Community framework, while taking full account of the Community interest. The Commission will be involved in external representation to the extent required to enable it to perform the role assigned to it by the Treaty.

    Representation in international organisations should take account of those organisations' rules. With particular regard to the Community's relations with the International Monetary Fund (IMF), they should be predicated upon the provision in that Fund's Articles of Agreement that only countries can be members of that institution. The Member States, in their capacities as members of the IMF, should help to establish pragmatic arrangements which would facilitate the conduct of IMF surveillance and the presentation of Community positions, including the views of the ESCB, in IMF fora.Page 245


    [91] OJ C 35, 2.2.1998, pp. 1-4.