Monetary Law Blog

ECB publication: “Legal aspects of the European System of Central Banks”

The European Central Bank (ECB) is today publishing a book entitled “Legal aspects of the European System of Central Banks”. The book contains a collection of articles on the European Union and the European System of Central Banks (ESCB), the Eurosystem, monetary law, central bank independence and central bank statutes as well as on financial law. The authors are current or former members of the Legal Committee of the ESCB (LEGCO). This book commemorates ten years of work by the Working Group of Legal Experts of the European Monetary Institute and by the LEGCO. It is dedicated to Mr Paolo Zamboni Garavelli, former Head of the Legal Department at the Banca d’Italia and member of LEGCO, who died last year.

EMU after five years: an assessment by the European Commission

(Source: bookshop.eu.int)

 

With the launch of the euro on 1 January 1999, and the introduction of euro notes and coins on 1 January 2002, the EU has achieved a long-standing ambition to cement closer economic integration with a single currency. Economic and monetary union (EMU) is now a tangible reality in 12 countries and is without precedent in terms of its scale and complexity.

 

Five and a half years on, the European Commission’s Directorate General for Economic and Financial Affairs has carried out an overall assessment of EMU. This report examines whether economic developments, institutions and the behaviour of economic agents have evolved in line with the expectations and conventional wisdom of policy makers and academics prior to the launch of the euro.

 

This assessment of EMU by the European Commission services comes at a timely moment with the recent accession of 10 countries to the EU marking a new chapter in the European integration process. A retrospective assessment of EMU may also help the incoming European Commission and European Parliament to shape their medium-term economic strategies for the 2005–2010.

 

Download the Commission’s report (4.3 MB)

Commission: “Hungarian government has failed to take effective action to correct its deficit”

Given a substantial deterioration of the budgetary outlook in Hungary, the European Commission has recommended to the Council to decide for the second time this year that the Hungarian government has failed to take effective action to correct its deficit. The deficit targets that the government set itself for 2005 and 2006 will be missed by a large margin, calling into question the 2008 deadline for correcting the deficit below the 3% Treaty reference value.

 

“The substantial deviation, both in 2005 and 2006, from the planned adjustment path is worrying and puts into question the credibility of the correction of the excessive deficit by 2008,” said Joaquín Almunia, European Commissioner for Economic and Monetary Affairs.

 

Link to press release

Link to Commission Recommendation

The reform of the Stability and Growth Pact: an assessment by José Manuel González-Páramo

Speech by José Manuel González-Páramo, Member of the Executive Board of the ECB
Conference on “New Perspectives on Fiscal Sustainability” dated 13 October 2005 (source: ECB website)

 

On the reform of the Stability and Growth Pact see prior post.

ECB Opinion at the request of the Czech Ministry of Justice (CON/2005/36)

The Czech Ministry of Justice has asked the ECB for an opinion on a draft law on insolvency and the means of its resolution and on a draft law amending certain laws in connection with the adoption of the law on insolvency (the draft laws).

 

The main purpose of the draft laws, which will replace the current insolvency framework, is to overhaul and modernise Czech insolvency law, by introducing new means of resolving insolvency other than bankruptcy, such as reorganisation, discharge of debt and other specialised proceedings for particular types of entities, including financial institutions.

 

After reciting the international financial community’s criticism of the Czech legal framework for corporate insolvency, the ECB generally welcomes the draft laws, which in its view represent a serious attempt to reform Czech insolvency law and which take into account the perceived shortcomings.

 

Link to Opinion CON/2005/36

On the national authorities’ duty to consult the ECB see a prior post.

ECB Opinion at the request of the Italian Ministry of Economy and Finance (CON/2005/34)

The Italian Ministry of Economy and Finance has asked the ECB for an opinion on an amendment to the draft law on the protection of savings concerning the Banca d’Italia.

 

Since the new draft law concerns (also) the governance and independence of Banca d’Italia (BdI; Central Bank of Italy) and the recent press and political attention given to growing pressure from Italian government ministers on Antonio Fazio, governor of BdI, to resign, I reproduce the substantive paragraphs of the ECB opinion in full.

 

On the national authorities’ duty to consult the ECB see a prior post.

Compilation of community legislation on economic and monetary union

After six years the Commission has published a new edition of this Compilation.

Download the Compilation (3 MB)

ECB Opinion at the request of the Central Bank of Cyprus (CON/2005/35)

The Central Bank of Cyprus (CBC) has asked the ECB for an opinion on a draft directive on the maintenance of minimum reserves with the CBC.

 

The purpose of the draft directive is to amend the CBC’s minimum reserve regime with a view to the future application of the ECB’s minimum reserve requirements in Cyprus on adoption of the euro.

European Parliament: “public support for the euro declines”

According to a recent report by the European Parliament some members of the public in the 12 countries of the euro zone "have a negative perception of the euro". The report, by the Dutch liberal MEP Jules Maaten, goes on to state that "this tendency is on the rise". In the last report, 66% of people questioned expressed their support for the currency, that's 11 points down since its introduction in 2002.

 

This has prompted the Parliament to vote overwhelmingly in support of a renewed communication campaign to emphasise what it sees as the benefits of the euro. These include: price stability, reduced transaction costs, low mortgage rates, easier travel and historically low interest rates.

 

Follow these links for the EP Report, a story about the report on the EP website, and the Commission communication on the implementation of an information and communication strategy on the euro and Economic and Monetary Union.

Commission adopts report on the United Kingdom’s budgetary situation

Press release by the Commission on 21 September

 

The European Commission today adopted a report on the budgetary situation of the United Kingdom following notification by the UK authorities last month that the general government deficit reached 3.2% of GDP in the 2004/05 financial year. Under European Union rules, the Commission must draft a report when the 3% deficit limit is exceeded. As required by the Treaty, the Commission will wait for the opinion of the Economic and Financial Committee before making its opinion on whether the UK deficit is excessive and whether recommendations ought to be issued.