ECB: "unilateral euroization by Iceland comes with real costs and serious risks"
This week the European Central Bank (ECB) objected to possible euroization by Iceland. In a speech at the Iceland Chamber of Commerce, Mr. Jürgen Stark, member of the ECB’s Executive Board, said that he is “aware that unilateral euroisation is being discussed in Iceland as a possible option.” He continued by saying that the ECB would “neither encourage nor facilitate such a move.” Or in other words “The ECB would thus pursue a policy of non-engagement and non-support towards” unilateral euroization.
The ECB did also have a word of warning for Iceland, stating that such euroization’s “benefits are uncertain, whereas the costs are real, and the risks serious.”
As to a possible “partial euroisation sponsored by the private sector, as opposed to an official euroisation”, Mr. Jürgen Stark noted that he would “not dwell much on this issue”, stating that “the potential benefits are more limited, whereas some of the costs may be less acute.”
Politically the most interesting comments made by Mr. Jürgen Stark relate to national sovereignty: "After all, a currency is a key attribute of sovereignty. Sharing a common currency implies sharing a common political destiny."
The speech given by Mr. Jürgen Stark (reproduced below) gives also an overview of the procedure leading to the adoption of the euro.
Although this overview gives a good impression of the 'road to Frankfurt', it seems to be less accurate with respect to some issues.
For example, central bank independence is mentioned as a criterion to join the euro area. In fact, this criterion is applied at an earlier stage when candidate countries accede to the EU. Central bank independence is, however, indeed a "cornerstone" of the relevant criteria. While the European Commission restricts the test to statutory requirements such as central bank independence, the ECB includes a broader range of issues in its assessments. In its convergence reports the ECB also addresses legislation in the area of, i.a., banknotes, coins, foreign reserve management and exchange rate policy.
Moreover, stating that "the road to the euro consists of two stages" is an oversimplification of a very complex procedure composed of, as I would like to see it, three stages with six sub stages (which, I'm aware, is a simplification as well). The three stages would be (i) accession to the EU, and consequently accession to the Economic and Monetary Union (EMU) as a member state that has yet to adopt the euro, (ii) participation in ERM II, i.e., the European exchange rate mechanism, and (iii) adopting the euro and accession to the euro area.




As a consequence of Cyprus’ EU membership al citizens of the Republic of Cyprus are also citizens of the European Union. This applies both to the Greek Community and the Turkish Community of Cyprus.
The Cypriot Constitution provides that Greek and Turkish are the Republic’s official languages. Legislative acts and government documents have to be drawn up and published in both official languages. Greeks and Turks must be addressed by the Cypriot government in the Greek or the Turkish language respectively.
On May 19, 2006, AgoraVox ran an article, authored by myself and titled “
Under the rotation system the number of Governors with a vote will be fixed at 15. So, at any give time some Governors will be participating in the meetings of the Governing Council without a vote.