Tuesday, 18 November 2008

Euro currency: Convergence criteria

During the present financial turmoil and the economic downturn, the rules concerning economic and monetary union (EMU) are under even closer scrutiny in European capitals than normally. The euro is, relatively speaking, seen as a safe harbour, but circumstances make it harder to fulfil the criteria for the third stage of EMU.

Adopting the euro currency is a treaty obligation for every EU member state except the United Kingdom and Denmark, but in order to join the Eurozone a member state has to qualify.

The hurdles are set out in the so called convergence criteria, or Maastricht criteria. Their aim is to bridge the gap between the single currency area and national economic and fiscal policies.

Given the obligation to adopt the euro currency and the move from a national currency to the euro, the convergence criteria are placed among the transitional provisions at treaty level.



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Current treaty

The current Treaty establishing the European Community (TEC) sets out Transitional provisions in Chapter 4 of Title VII Economic and monetary policy, in Part Three Community policies (in the latest codified version of the treaties, Official Journal 29.12.2006 C 321 E/93─101).

Chapter 4 Transitional provisions contains Articles 116 to 124 TEC.

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Convergence criteria

The convergence criteria are laid out in general terms in Article 121(1) TEC (ex Article 109j). The transitional European Monetary Institute (EMI) has since been replaced by the European Central Bank (ECB) and the ecu by the euro:

Article 121 TEC

1. The Commission and the EMI shall report to the Council on the progress made in the fulfilment by the Member States of their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between each Member State's national legislation, including the statutes of its national central bank, and Articles 108 and 109 of this Treaty and the Statute of the ESCB. The reports shall also examine the achievement of a high degree of sustainable convergence by reference to the fulfilment by each Member State of the following criteria:

— the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability,

— the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 104(6),

— the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the currency of any other Member State,

— the durability of convergence achieved by the Member State and of its participation in the exchange-rate mechanism of the European Monetary System being reflected in the long‑term interest-rate levels.

The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in a Protocol annexed to this Treaty. The reports of the Commission and the EMI shall also take account of the development of the ecu, the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.

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Protocol on convergence criteria

Independent central bank plus low inflation, moderate government deficit, no devaluation and low interest rates; the convergence criteria are set out in more detail in Protocol (No 21) on the convergence criteria referred to in Article 121 of the Treaty establishing the European Community (1992):

THE HIGH CONTRACTING PARTIES,

DESIRING to lay down the details of the convergence criteria which shall guide the Community in taking decisions on the passage to the third stage of economic and monetary union, referred to in Article 121(1) of this Treaty,

HAVE AGREED upon the following provisions, which shall be annexed to the Treaty establishing the European Community.

Article 1
The criterion on price stability referred to in the first indent of Article 121(1) of this Treaty shall mean that a Member State has a price performance that is sustainable and an average rate of inflation, observed over a period of one year before the examination, that does not exceed by more than 1 ½ percentage points that of, at most, the three best performing Member States in terms of price stability. Inflation shall be measured by means of the consumer price index on a comparable basis, taking into account differences in national definitions.

Article 2
The criterion on the government budgetary position referred to in the second indent of Article 121(1) of this Treaty shall mean that at the time of the examination the Member State is not the subject of a Council decision under Article 104(6) of this Treaty that an excessive deficit exists.

Article 3
The criterion on participation in the exchange-rate mechanism of the European Monetary System referred to in the third indent of Article 121(1) of this Treaty shall mean that a Member State has respected the normal fluctuation margins provided for by the exchange-rate mechanism on the European Monetary System without severe tensions for at least the last two years before the examination. In particular, the Member State shall not have devalued its currency's bilateral central rate against any other Member State's currency on its own initiative for the same period

Article 4
The criterion on the convergence of interest rates referred to in the fourth indent of Article 121(1) of this Treaty shall mean that, observed over a period of one year before the examination, a Member State has had an average nominal long-term interest rate that does not exceed by more than 2 percentage points that of, at most, the three best performing Member States in terms of price stability. Interest rates shall be measured on the basis of long-term government bonds or comparable securities, taking into account differences in national definitions.

Article 5
The statistical data to be used for the application of this Protocol shall be provided by the Commission.

Article 6
The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, the EMI or the ECB as the case may be, and the Committee referred to in Article 114, adopt appropriate provisions to lay down the details of the convergence criteria referred to in Article 121 of this Treaty, which shall then replace this Protocol.


(Source: Pages 295 and 296 in the consolidated version of the treaties.)

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Abrogating a derogation


The second sentence of Article 122(2) TEC (ex Article 109k) lays out the procedure for abrogating a derogation, i.e. for joining the euro area:



Article 122(2) TEC

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2. At least once every two years, or at the request of a Member State with a derogation, the Commission and the ECB shall report to the Council in accordance with the procedure laid down in Article 121(1). After consulting the European Parliament and after discussion in the Council, meeting in the composition of the Heads of State or Government, the Council shall, acting by a qualified majority on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in Article 121(1), and abrogate the derogations of the Member States concerned.

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Conversion measures

Article 123(5) TEC (ex Article 109l) indicates the exchange rate and the conversion measures to be settled, when a member state is joining the euro area:

Article 123(5) TEC

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5. If it is decided, according to the procedure set out in Article 122(2), to abrogate a derogation, the Council shall, acting with the unanimity of the Member States without a derogation and the Member State concerned, on a proposal from the Commission and after consulting the ECB, adopt the rate at which the ecu shall be substituted for the currency of the Member State concerned, and take the other measures necessary for the introduction of the ecu as the single currency in the Member State concerned.

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Draft Constitution

The euro currency had been introduced, and the euro banknotes and coins were in circulation, when the European Convention deliberated institutional reform of the European Union. It is hardly surprising that the Convention proposed a reworked section with the aim to simplify and to clarify the transitional provisions.

Section 4 Transitional provisions comprises Articles III-91 to III-96 of the draft Constitution (OJ 18.7.2003 C 169/45─46).

Article III-92 of the draft Constitution proposed a consolidation of the treaty provisions we looked at above:

SECTION 4
Transitional provisions

Article III-92 Draft Constitution

1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council of Ministers on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between each of these Member States' national legislation, including the statutes of its national central bank, and Articles III-80 and III-81 and the Statute of the European System of Central Banks and the European Central Bank. The reports shall also examine whether a high degree of sustainable convergence has been achieved, by analysing how far each of these Member States has fulfilled the following criteria:

(a) the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability;

(b) the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article III-76(6);

(c) the observance of the normal fluctuation margins provided for by the exchange-rate mechanism for at least two years, without devaluing against the euro;

(d) the durability of convergence achieved by the Member State with a derogation and of its participation in the exchangerate mechanism, being reflected in the long-term interest-rate levels.

The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in the Protocol on the convergence criteria. The reports of the Commission and the European Central Bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.

2. After consulting the European Parliament and after discussion in the European Council, the Council of Ministers, on a proposal from the Commission, shall adopt a European decision establishing which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in paragraph 1, and shall abrogate the derogations of the Member States concerned.

3. If it is decided, according to the procedure set out in paragraph 2, to abrogate a derogation, the Council of Ministers shall, on a proposal from the Commission, with the unanimity of the members representing Member States without a derogation and the Member State concerned, adopt the European regulations or decisions irrevocably fixing the rate at which the euro is to be substituted for the currency of the Member State concerned, and laying down the other measures necessary for the introduction of the euro as the single currency in that Member State. The Council of Ministers shall act after consulting the European Central Bank.

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Protocol

The European Convention indicated the existence of a Protocol on the convergence criteria, but the Convention did not propose its own version.

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Finland

The Finnish government reported on the results of the European Convention in Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin (VNS 2/2003 vp). Finland had adopted the euro, so the section on economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67 did not discuss the convergence criteria or the procedures to abrogate a derogation and to take the conversion measures.

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Sweden

Ahead of the intergovernmental conference, the Swedish government presented its views in Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003). Non-euro Sweden was fairly supportive of effective decision-making in the eurozone and international representation for the euro area in international financial institutions (page 49─50), but on the heels of the negative euro referendum the government had nothing to say about the convergence criteria or euro conversion.

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de Poncins


Étienne de Poncins presented the text of Article III-92 in Vers une Constitution européenne (Éditions 10/18, 2003), pages 313 and 314, without comment.

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Constitutional Treaty

The transitional EMU provisions of the intergovernmental conference (IGC 2004) are found in Section 5 Transitional provisions, comprising Articles III-197 to 202 of the Treaty establishing a Constitution for Europe (OJ 16.12.2004 C 310/86─90).

Article III-198 Constitution

1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between the national legislation of each of these Member States, including the statutes of its national central bank, and Articles III-188 and III-189 and the Statute of the European System of Central Banks and of the European Central Bank. The reports shall also examine whether a high degree of sustainable convergence has been achieved, by analysing how far each of these Member States has fulfilled the following criteria:

(a) the achievement of a high degree of price stability; this is apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability;

(b) the sustainability of the government financial position; this is apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article III-184(6);

(c) the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European monetary system, for at least two years, without devaluing against the euro;

(d) the durability of convergence achieved by the Member State with a derogation and of its participation in the exchange-rate mechanism, being reflected in the long-term interest-rate levels.

The four criteria laid down in this paragraph and the relevant periods over which they are to be respected are developed further in the protocol on the convergence criteria. the reports from the commission and the european central bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.

2. After consulting the European Parliament and after discussion in the European Council, the Council, on a proposal from the Commission, shall adopt a European decision establishing which Member States with a derogation fulfil the necessary conditions on the basis of the criteria laid down in paragraph 1, and shall abrogate the derogations of the Member States concerned.

The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.

The qualified majority referred to in the second subparagraph shall be defined as at least 55 % of these members of the Council, representing Member States comprising at least 65 % of the population of the participating Member States. A blocking minority must include at least the minimum number of these Council members representing more than 35 % of the population of the participating Member States, plus one member, failing which the qualified majority shall be deemed attained.

3. If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation, the Council shall, on a proposal from the Commission, adopt the European regulations or decisions irrevocably fixing the rate at which the euro is to be substituted for the currency of the Member State concerned, and laying down the other measures necessary for the introduction of the euro as the single currency in that Member State. The Council shall act with the unanimous agreement of the members representing Member States whose currency is the euro and the Member State concerned, after consulting the European Central Bank.

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Protocol

The intergovernmental conference (IGC 2004) adopted a Protocol (No 11) on the convergence criteria (OJ 16.12.2004 C 310/339─340).

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Let us see it our standard references contribute anything towards our understanding of the provision.

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Sweden

The government of Sweden, still outside the eurozone, offered a short and bland description of the aims of economic and monetary union (EMU) in the draft ratification bill, Lagrådsremiss Fördraget om upprättande av en konstitution för Europa (2 June 2005), page 171:

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”Den ekonomiska och monetära unionen (EMU) är ett samarbete inom EU som syftar till att samordna medlemsländernas ekonomiska politik och att införa en gemensam valuta. EMU har genomförts i tre etapper. Den sista etappen inleddes 1999 och innebär en fullbordad valutaunion med gemensam centralbank (Europeiska centralbanken) samt gemensam valuta och penningpolitik. En förutsättning för valutaunionen har varit och är att de deltagande ländernas ekonomier befinner sig på ungefär samma nivå. Ett antal ekonomiska krav som ett land måste uppfylla för att få delta i valutaunionen har därför ställts upp, de s.k. konvergenskriterierna. För att säkerställa sunda offentliga finanser inom unionen har därför EU inrättat den s.k. stabilitets- och tillväxtpakten.”

In addition, the Swedish government mentioned Article III-198 Constitution in connection with the amended decision-making procedures.

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Finland

In Finland, the government’s ratification bill, Hallituksen esitys Eduskunnalle Euroopan perustuslaista tehdyn sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta (HE 67/2006 vp), mentioned Article III-198 Constitution on page 185. In addition to the similarities with the current treaty provisions, the Finnish government mentioned the new recommendation from the euro area countries:

”III-198 artikla, joka koskee uusien jäsenvaltioiden hyväksymistä euron käyttäjiksi, vastaa asiallisesti SEY 121 artiklan ensimmäistä kohtaa, SEY 122 artiklan toista kohtaa sekä SEY 123 artiklan neljännen kohdan ensimmäistä lausetta.

Artiklan 2 kohdassa olevia päätöksentekomenettelysäännöksiä on kuitenkin uusittu. Uusitun määräyksen mukaan neuvoston on, ennen kuin se tekee normaalikokoonpanossaan lopullisen päätöksen uuden jäsenvaltion hyväksymisestä euron käyttäjäksi, saatava suositus euron käyttöön ottaneiden jäsenvaltioiden edustajilta. Kyseinen suositus annetaan määräenemmistöllä, joka on määritelty III-179 artiklan yhteydessä.”

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Original Lisbon Treaty

In Article 2, point 102, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) managed to adopt the substance of the Constitution’s proposal using a drafting technique apt to drive even the most ardent supporter of European integration into deep despair (OJ 17.12.2007 C 306/77─78). This is the wording the EU citizens were offered until the publication of the consolidated versions of the Lisbon Treaty:

102) Article 117 shall be repealed, with the exception of the first five indents of paragraph 2 thereof, which shall become the first five indents of paragraph 2 of Article 118a; they shall be amended as set out in point 103 below. A new Article 117a shall be inserted as follows:

(a) paragraph 1 thereof shall take over the wording of Article 121(1), with the following amendments:

(i) throughout the paragraph, the words ‘the EMI’ shall be replaced by ‘the European Central Bank’;

(ii) at the beginning of the first subparagraph, the following shall be inserted: ‘At least once every two years, or at the request of a Member State with a derogation,’;

(iii) in the first subparagraph, first sentence, the words ‘the progress made in the fulfilment by the Member States of their obligations’ shall be replaced by ‘the progress made by the Member States with a derogation in fulfilling their obligations’;

(iv) in the first subparagraph, second sentence, the words ‘each Member State's national legislation’ shall be replaced by ‘the national legislation of each of these Member States’ and the words ‘of this Treaty’ shall be deleted;

(v) in the third indent of the first subparagraph, the words ‘against the currency of any other Member State’ shall be replaced by ‘against the euro;’;

(vi) in the fourth indent of the first subparagraph, the words ‘the Member State’ shall be replaced by ‘the Member State with a derogation’ and the words ‘of the European Monetary System’ shall be deleted;

(vii) in the second subparagraph, the words ‘the development of the ecu’ shall be deleted;

(b) paragraph 2 thereof shall take over the wording of the second sentence of Article 122(2), with the following amendments:

(i) at the end of the text, the words ‘set out in Article 121(1)’ shall be replaced by ‘set out in paragraph 1’;

(ii) the following new second and third subparagraphs shall be added:

‘The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.

The qualified majority of the said members, as referred to in the second subparagraph, shall be defined in accordance with Article 205(3)(a).’;

(c) paragraph 3 thereof shall take over the wording of Article 123(5), with the following amendments:

(i) at the beginning of the paragraph, the words ‘If it is decided, according to the procedure set out in Article 122(2), to abrogate a derogation,’ shall be replaced by ‘If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation,’;

(ii) the words ‘adopt the rate’ shall be replaced by ‘irrevocably fix the rate’.

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Renumbering

The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 117a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 140 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII, and in the renumbered Chapter 5 ‘Transitional provisions’ (OJ 17.12.2007 C 306/215).

(In the consolidated version of the Lisbon Treaty, OJ 9.5.2008 C 115, the Tables of equivalences start on page 361, but the ToL numbers have been omitted.)

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Consolidated Lisbon Treaty: TFEU

A readable Article 140 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/108─110:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 5 Transitional provisions


Article 140 TFEU
(ex Articles 121(1), 122(2), second sentence, and 123(5) TEC)

1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council on the progress made by the Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union. These reports shall include an examination of the compatibility between the national legislation of each of these Member States, including the statutes of its national central bank, and Articles 130 and 131 and the Statute of the ESCB and of the ECB. The reports shall also examine the achievement of a high degree of sustainable convergence by reference to the fulfilment by each Member State of the following criteria:

— the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of, at most, the three best performing Member States in terms of price stability,

— the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position without a deficit that is excessive as determined in accordance with Article 126(6),

— the observance of the normal fluctuation margins provided for by the exchange-rate mechanism of the European Monetary System, for at least two years, without devaluing against the euro,

— the durability of convergence achieved by the Member State with a derogation and of its participation in the exchange-rate mechanism being reflected in the long-term interest-rate levels.

The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in a Protocol annexed to the Treaties. The reports of the Commission and the European Central Bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.

2. After consulting the European Parliament and after discussion in the European Council, the Council shall, on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in paragraph 1, and abrogate the derogations of the Member States concerned.

The Council shall act having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro. These members shall act within six months of the Council receiving the Commission's proposal.

The qualified majority of the said members, as referred to in the second subparagraph, shall be defined in accordance with Article 238(3)(a).

3. If it is decided, in accordance with the procedure set out in paragraph 2, to abrogate a derogation, the Council shall, acting with the unanimity of the Member States whose currency is the euro and the Member State concerned, on a proposal from the Commission and after consulting the European Central Bank, irrevocably fix the rate at which the euro shall be substituted for the currency of the Member State concerned, and take the other measures necessary for the introduction of the euro as the single currency in the Member State concerned.

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Protocol on the convergence criteria

For those who want to read Article 140 TFEU alongside the relevant Protocol on the convergence criteria in an updated form, here is the text from the consolidated version of the Lisbon Treaty (pages 281 and 282):

PROTOCOL (No 13)
ON THE CONVERGENCE CRITERIA

THE HIGH CONTRACTING PARTIES,

DESIRING to lay down the details of the convergence criteria which shall guide the Union in taking decisions to end the derogations of those Member States with a derogation, referred to in Article 140 of the Treaty on the Functioning of the European Union,

HAVE AGREED upon the following provisions, which shall be annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union:

Article 1
The criterion on price stability referred to in the first indent of Article 140(1) of the Treaty on the Functioning of the European Union shall mean that a Member State has a price performance that is sustainable and an average rate of inflation, observed over a period of one year before the examination, that does not exceed by more than 1 ½ percentage points that of, at most, the three best performing Member States in terms of price stability. Inflation shall be measured by means of the consumer price index on a comparable basis taking into account differences in national definitions.

Article 2
The criterion on the government budgetary position referred to in the second indent of Article 140(1) of the said Treaty shall mean that at the time of the examination the Member State is not the subject of a Council decision under Article 126(6) of the said Treaty that an excessive deficit exists.

Article 3
The criterion on participation in the Exchange Rate mechanism of the European Monetary System referred to in the third indent of Article 140(1) of the said Treaty shall mean that a Member State has respected the normal fluctuation margins provided for by the exchange-rate mechanism on the European Monetary System without severe tensions for at least the last two years before the examination. In particular, the Member State shall not have devalued its currency's bilateral central rate against the euro on its own initiative for the same period.

Article 4
The criterion on the convergence of interest rates referred to in the fourth indent of Article 140(1) of the said Treaty shall mean that, observed over a period of one year before the examination, a Member State has had an average nominal long-term interest rate that does not exceed by more than two percentage points that of, at most, the three best performing Member States in terms of price stability. Interest rates shall be measured on the basis of long-term government bonds or comparable securities, taking into account differences in national definitions.

Article 5
The statistical data to be used for the application of this Protocol shall be provided by the Commission.

Article 6
The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, the ECB as the case may be, and the Economic and Financial Committee, adopt appropriate provisions to lay down the details of the convergence criteria referred to in Article 140(1) of the said Treaty, which shall then replace this Protocol.

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Sweden

The Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008), on page 185, mentions the Article 117a in the same terms as the government used about the corresponding Article of the Constitutional Treaty, so it does not go into fine detail:

”I ett flertal fall på området ekonomisk och monetär politik ska rådet fatta beslut med kvalificerad majoritet enligt den nya definition av detta begrepp som införs genom Lissabonfördraget (se även avsnitt 14.4). Det rör sig bl.a. om rådsbeslut om rekommendationer till en medlemsstat som för en politik som inte är förenlig med de allmänna riktlinjerna eller har ett alltför stort underskott (artiklarna 99.4 104.6 och 104.7 i EUF-fördraget), rådsbeslut om antagande av landsspecifika riktlinjer (artikel 115a.1b i EUF-fördraget), rådsbeslut om åtgärder för att säkerställa ett enat externt handlande (artikel 115c.2 i EUF-fördraget) och olika rådsbeslut som rör de s.k. medlemsstaterna med undantag (artiklarna 116a.4 och 117a.2 i EUF-fördraget). Särskilda övergångsbestämmelser när det gäller omröstning i rådet enligt artikel 205.3 i EUF-fördraget finns i artikel 3.4 i ett protokoll om övergångsbestämmelser som fogas till EU-fördraget, EUF-fördraget och Euratomfördraget.”


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Priollaud and Siritzky

In ‘Le traité de Lisbonne ; Commentaire, article par article, des nouveaux traités européens (TUE et TFUE)’ (La Documentation Française, 2008), François-Xavier Priollaud and David Siritzky present the Lisbon Treaty provisions of Chapter 5 (Dispositions transitoires) on page 260 to 261. Their description of Article 140 TFEU is succinct:

« L’art. 140 TFUE prévoit la procédure d’entrée d’un nouvel État membre dans la zone euro, pour laquelle la capacité décisionnelle des pays dont la monnaie est l’euro est également renforcée (v. commentaire chapitre précédent). »

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United Kingdom FCO

‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon (Cm 7311, 21 January 2008) offers the following comment on Article 140 TFEU (on page 13):

“Draws on Articles 121, 122(2) and 123(5) TEC. Sets out procedure for abrogating a derogation. The provision in paragraph 2 regarding the recommendation of a qualified majority of Member States whose currency is the euro is new.”

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UK House of Commons Library

The UK House of Commons Library presented the amending treaty in ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Communities’ (Research paper 07/86, 6 December 2007. There was a short explanation of Article 117a TFEU (ToL) and the other transitional provisions), on page 64:

“A new Article 117a (Constitution Article III-198) is based on present Articles 121(1), 122(2) and 123(5), but updated to remove references to 1996, 1997 and other dates relating to the introduction of the euro.”


[I have deleted the footnotes, which can be found in the original.]

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Adopting the euro currency may look more enticing amid the current financial turmoil and the recession, but at the same time the difficulties for the vulnerable member state currencies increase, making it harder to fulfil the convergence criteria.

The Lisbon Treaty does not change much substantially, adding the recommendation by the Eurozone members, but here too the new treaty in its consolidated form would be easier to read and to comprehend than the current one.


Ralf Grahn