European Central Bank offers economic policy advice

Eurozone woes seem to be going nowhere, but there are different angles regarding the causes and remedies. The blog post Economic policy making becomes challenging mentioned the latest reports from the European Commission:

Directorate-General for Economic and Financial Affairs (Ecfin) of the European Commission: 2011 Report on Public finances in EMU (European Economy 3/2011)

European Commission (Ecfin): Interim Forecast September 2011 (14 pages)


European Central Bank

The editorial of the latest Monthly Bulletin of the European Central Bank (15 September 2011) is available in 22 official EU languages. The English version:

Editorial – 15 September 2011 – Monthly Bulletin

Uncertainty and risks abound:

... the Governing Council expects the euro area economy to grow moderately, subject to particularly high uncertainty and intensified downside risks.

The ECB does not abandon its anti-inflationary role, but it has participated heavily through market measures to shore up liquidity for banks and governments in trouble. However, the European Central Bank wants to see swift and decisive economic policy action from governments and parliaments in the euro area:

Turning to fiscal policies, a number of governments have announced additional measures to ensure the achievement of their consolidation targets and to strengthen the legal basis for national fiscal rules. To ensure credibility, it is now crucial that the announced measures be frontloaded and implemented in full. Governments need to stand ready to implement further consolidation measures, notably on the expenditure side, if risks regarding the attainment of the current fiscal targets materialise. Countries that enjoy better than expected economic and fiscal developments should make full use of this room for manoeuvre for faster deficit and debt reduction. All euro area governments need to demonstrate their inflexible determination to fully honour their own individual sovereign signature, which is a decisive element in ensuring financial stability in the euro area as a whole.

Fiscal consolidation and structural reforms must go hand in hand to strengthen confidence, growth prospects and job creation. The Governing Council therefore urges all euro area governments to decisively and swiftly implement substantial and comprehensive structural reforms. This will help these countries to strengthen competitiveness, increase the flexibility of their economies and enhance their longer-term growth potential. In this respect, labour market reforms are key, with a focus on the removal of rigidities and the implementation of measures which enhance wage flexibility. In particular, there is a need for the elimination of automatic wage indexation clauses and a strengthening of firm-level agreements so that wages and working conditions can be tailored to firms’ specific needs. These measures should be accompanied by structural reforms that increase competition in product markets, particularly in services – including the liberalisation of closed professions – and, where appropriate, the privatisation of services currently provided by the public sector, thereby facilitating productivity growth and supporting competitiveness.

Not to everybody's liking, but the ECB carries a big stick.



Ralf Grahn

Trichet writes to Van Rompuy on economic governance

When the president of the European Central Bank, Jean-Claude Trichet, spoke at the hearing of the Economic and Monetary Affairs Committee of the European Parliament 21 June 2010, he was not prattling on as a free thinker.



On the eve of the European Council 17 June 2010, Trichet had sent a letter to its president Herman Van Rompuy, who chairs the task force on economic governance. Enclosed were the proposals by the ECB to strengthen decisively the governance and enforcement structures in the economic policy framework of the euro area:

I trust that the proposals will be useful for the deliberations of the Task Force.

On 14 pages the Governing Council of the ECB details its proposals for

(1) strengthening surveillance over budgetary policies and more effective prevention/correction of excessive deficits and debts;

(2) an improved framework for competitiveness surveillance and the correction of economic imbalances and

(3) the design of an appropriate euro area framework for crisis management.


The Governing Council of the European Central Bank is the main decision-making body of the ECB. It consists of the six members of the Executive Board and the governors of the national central banks of the 16 euro area countries.

A heavyweight contribution, I would say.





Ralf Grahn

ECB’s Trichet on economic governance in EMU

The EU heads of state or government have stowed away the discussions about improving European Union and eurozone economic governance into the finance minister task force chaired by Herman Van Rompuy. The task force is expected to report in October.

For the sake of transparency and informed public debate, it is therefore important that these crucial matters are debated elsewhere as well. One welcome intervention was made by the president of the European Central Bank, Jean-Claude Trichet, at the hearing of the Economic and Monetary Affairs Committee of the European Parliament 21 June 2010.



EMU responsibility


According to Trichet, policy makers have to understand the requirements of the Economic and Monetary Union (EMU):

A single market of 500 million citizens and an Economic and Monetary Union of 330 million citizens – which are among the largest and most advanced economies in the world and which are built on solid foundations in terms of human and social capital – cannot and should not be measured according to the strengths or weaknesses of their individual components alone. Particularly as regards Economic and Monetary Union, policy-makers need to internalise what it means to be part of a monetary union, in words and in deeds.

Quantum leap for economic governance needed


Economic governance must be radically improved. Benefits and responsibilities of EMU go together. Solidarity runs both ways:

The ECB believes that a true quantum leap is needed in the framework for surveillance and adjustment of fiscal policies, as well as broader macroeconomic policies concerned with Europe’s competitiveness.

“ La solidarité de fait” that Robert Schuman called for 60 years ago is reflected in the degree of economic integration and interdependence already achieved in Monetary Union. But solidarity is a two-way street. The benefits and protection that are derived from membership of Monetary Union bring with them responsibilities and obligations. This is the fundamental contract which forms the basis for our currency. We now have to turn it into a more effective structure for fiscal and macroeconomic surveillance and adjustment.

Budget surveillance

Trichet outlined the strengthening of budgetary surveillance, including prevention, correction, a wider range of quasi-automatic sanctions and formal Commission proposals:

First, it is of the essence that the surveillance of budgetary policies be strengthened. I am pleased to note that the European Council confirmed this assessment at its meeting last Thursday.

At the level of the EU27, and in particular within the euro area, we must have effective instruments to prevent – and, where necessary, correct – excessive deficits and debt levels. A more stringent implementation of rules and procedures is essential, among other things by increasing the automaticity and speed of procedural steps. The initiation of sanctions also needs to be quasi-automatic.

Fiscal surveillance must be more direct and effective. It must also be based on more independent monitoring and assessment. We may need a differentiated approach to surveillance depending on the fiscal performance of countries. The Commission should have greater responsibility by making proposals, which can only be modified with unanimity in the Council, rather than mere recommendations under the Stability and Growth Pact.

In the event of non-compliance, sanctions need to be applied much earlier and to be broader in scope. They should not only address excessive debt ratios, but also apply when countries are not making sufficient progress towards medium-term budgetary objectives. A wider spectrum of financial sanctions needs to be considered, along with non-financial and procedural sanctions, such as more stringent reporting requirements or even a limitation or suspension of voting rights.

Competitiveness


Broader economic reforms and surveillance of macroeconomic policies are needed to enhance competitiveness and prevent imbalances:

The second area may appear more novel, both at the level of the European Union and at the level of the euro area, but the ECB has in fact been stressing it in the Eurogroup since at least 2005: the surveillance of policies to maintain Europe’s internal and external competitiveness – policies to raise productivity, to enhance people’s skills and to improve firms’ competitiveness. These policies go well beyond the tradable sector. They must also encompass the non-tradable sector, including the public sector, since it too is decisive for the competitiveness of an economy as a whole.

Conscious management of wages and costs in order to maintain a healthy position for the economy within a competitive environment – this should be the core focus of such broader macroeconomic surveillance. The reason why competitiveness should be the main focus is not that countries should pursue export-oriented policies or boost international market share. The reason is that within a monetary union, the relative competitiveness of economies captures very well the sustainability of price and cost developments.

I am pleased that last Thursday’s European Council confirmed the need for an effective surveillance framework in this area. Experience has shown that persistent divergence in this regard is detrimental both for Member States and for Monetary Union as a whole.

As with fiscal surveillance, this framework needs to allow for targeted and differentiated surveillance and follow-up measures. For countries that experience significant losses of competitiveness, surveillance should become increasingly deep and detailed. More ad hoc reporting and dedicated country missions, policy recommendations, compliance requirements, public peer pressure and gradual financial steps to encourage compliance could all be part of that process.

For this to work, we need a transparent and effective trigger mechanism to determine the intensity of vulnerabilities and surveillance. This should be based on close monitoring and reporting by both the Commission and the ECB. Experts are currently developing ways to best capture the complexity of the issue, as well as procedures by which indicators could be used in a surveillance and adjustment framework.

If we can put in place effective surveillance and adjustment frameworks for both fiscal and competitiveness policies – and if we can ensure through appropriate regulation that our financial system serves the real economy and not the other way around – our European Union and our Economic and Monetary Union will exit this crisis much stronger than before and will be very well placed in the global economy.

Wise public spending and growth oriented reforms are needed, but the Economic and Monetary Union is far from over, if our political leaders grasp the nettle.




Ralf Grahn

European Central Bank: New TARGET2 and Eurosystem guidelines

Two new Guidelines by the European Central Bank (ECB) have been published.

TARGET2

Annexes II, III and IV to Guideline ECB/2007/2 have been amended in accordance with the Annex to the Guideline of the European Central Bank ECB/2009/9 of 7 May 2009 amending Guideline ECB/2007/2 on a Trans-European Automated Real-time Gross Settlement Express Transfer system (TARGET2).

Guideline ECB/2009/9 was published in the Official Journal of the European Union (OJEU) 19.5.2009 L 123/94.



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Eurosystem

Amendments have been made to Guideline ECB/2000/7 of 31 August 2000 on monetary policy instruments and procedures of the Eurosystem to allow access to Eurosystem open market operations and standing facilities by credit institutions which, in view of their specific institutional nature under Community law, are subject to scrutiny of a standard comparable to supervision by competent national authorities.


The amendments are enacted by the Guideline of the European Central Bank ECB/2009/10 of 7 May 2009 amending Guideline ECB/2000/7 on monetary policy instruments and procedures of the Eurosystem, published OJEU 19.5.2009 L 123/99.



Ralf Grahn

European Union: Financial assistance to member states (legal search methods)

Readers may be familiar with the so called no-bailout clause and the prohibition against monetary financing of government expenditure, but on the other hand the European Union can assist member states with balance of payments problems.

During the financial and economic crisis these provisions are far from mere abstractions, and for those who want to look deeper into the issues, an opinion of the European Central Bank (ECB) offers a convenient gateway.

The Opinion of the European Central Bank CON/2009/37 of 20 April 2009 on a proposal for a Council Regulation amending Regulation (EC) No 332/2002 establishing a facility providing medium-term financial assistance for Member States' balances of payments has been published in the Official Journal of the European Union (OJEU) 8.5.2009 C 106/1.




This opinion does not only present the ECB’s favourable opinion on the increase of the ceiling of the assistance facility to EUR 50 billion, but as other legal acts and opinions it serves as a gateway to the relevant documents for interested readers.


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Regulation 332/2002

First of all, we have a full reference to the Regulation to be amended in a footnote:


Regulation (EC) No 332/2002 of 18 February 2002 establishing a facility providing medium-term financial assistance for Member States’ balances of payments (OJ L 53, 23.2.2002, p. 1).

We now know where to find the original Regulation in the Official Journal.

To be on the safe side, we have to look for possible later amendments.

If we search with year and number using the simple search on Eur-Lex, we find a Bibliographic notice on the Regulation, giving us amendments and proposed amendments.


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Proposal


We find the proposal by the Commission in the second footnote: COM(2009) 169 final.

If we turn to Preparatory acts on Eur-Lex, we find the Commission’s Proposal for a Council Regulation amending Regulation (EC) No 332/2002, establishing a facility providing medium-term financial assistance for Member States' balances of payments (Brussels, 8.4.2009 COM(2009) 169 final) with the help of the number.

We can use the document number COM(2009) 169 or the procedure number 2009/0053/CNS to track the proposal on PreLex.

We can follow the procedure with the help of the Legislative observatory of the European Parliament using (for instance) the procedure number.

In other words, we are able to check how the file advances, and we can access the documents.


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Additional information


The ECB opinion makes a point about what the financial assistance is and what it is not allowed to be:


“In this context, the ECB notes that the procedure foreseen in the proposed regulation must fully comply with the prohibition on monetary financing laid down in Article 101(1) of the Treaty, read in conjunction with Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred to in Articles 104 and 104b(1) of the Treaty ( 3 ).”


The third footnote ─ ( 3 ) OJ L 332, 31.12.1993, p. 1 ─ guides us towards Article 101(1) TEC and Council Regulation 3603/93.

The current (consolidated) versions of the treaties are found on Eur-Lex under Treaties.

We know when the Regulation was published, but an act older than 1998 is not found by OJ year and number. In addition, we have to be prepared for ten years of possible amendments.

After using the simple search (year and number) on Eur-Lex, we find the bibliographic note and the text. I notice no amendments.


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Accessing EU documents

This is one illustration of how EU documents guide us to the information we need and how we can search for materials.

The legal materials are available including amendments, the search options help us and we can track the new proposals.

Most of the times, the services are up and running, and I find what I need.

On the other hand, there are much more sophisticated search options available, but my search skills are pretty basic.

If someone wants to share more advanced tips with the readers of this blog, I am grateful.



Ralf Grahn

ECB: TARGET2-Securities Programme Board

A further step on the road to an operational borderless pan-European cash and securities settlement system.

See the Decision of the European Central Bank ECB/2009/6 of 19 March 2009 on the establishment of the TARGET2-Securities Programme Board, which has been published in the Official Journal of the European Union (OJEU) 22.4.2009 L 102/12.



Article 1
T2S Programme Board

1. The T2S Programme Board shall be established as a streamlined management body of the Eurosystem with the task of developing proposals for the Governing Council on key strategic issues and executing tasks of a purely technical nature in relation to T2S.

2. The mandate of the T2S Programme Board, including its objectives, responsibilities, tasks, composition, working procedures, and budget, shall be as set out in the Annex to this Decision.

3. The names and resumés of candidates to be considered for appointment to the T2S Programme Board members shall be sent by members of the Governing Council to the Executive Board so that they are received no later than 8 April 2009. On the basis of such proposals, the Governing Council shall appoint members of the T2S Programme Board on 23 April 2009.

4. The T2S Programme Board shall commence work from mid-May 2009.

5. The T2S Programme Board shall communicate its agenda, a summary of its meetings and relevant documentation in relation to its meetings to the members of the PSSC to allow the latter to provide input to the T2S Programme Board.


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TARGET2 – cash and securities settlement

The appointment of the TARGET2-Securities Programme Board is a further step to make the system operational:

At its meeting of 6 July 2006, the Governing Council of the European Central Bank (ECB) decided to explore, in cooperation with central securities depositories (CSDs) and other market participants, the possibility of setting up a new Eurosystem service for securities settlement, to be called TARGET2-Securities (T2S). As part of its tasks in accordance with Articles 17, 18 and 22 of the Statute of the ESCB, the Eurosystem envisages that T2S will be a service based on a single platform allowing for core, neutral and borderless pan-European cash and securities settlement, which will be offered to CSDs to enable them to provide their customers with harmonised and commoditised delivery-versus-payment settlement services in central bank money in an integrated technical environment.



Ralf Grahn

Governing Council of the European Central Bank: Voting rights

Slovakia became the 16th Eurozone country from the beginning of 2009. This forced the European Central Bank (ECB) to address the issue of voting rights. When we last wrote about this issue concerning the ECB Rules of Procedure, the matter was still under consideration.


Postponement

Before the end of 2008 the ECB decided to postpone the move to a new voting system, by Decision of the European Central Bank ECB/2008/29 of 18 December 2008 to postpone the start of the rotation system in the Governing Council of the European Central Bank, published in the Official Journal of the European Union (OJEU) 7.1.2009 L 3/4. The postponement entered into force on 1 January 2009. The new voting system for governors of national central banks takes effect when two more countries adopt the euro.



An explanatory press release was issued 18 December 2008.



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Future voting system

The future voting system has now been elaborated, by amending the ECB’s Rules of Procedure.

Decision of the European Central Bank ECB/2009/5 of 19 March 2009 amending Decision ECB/2004/2 of 19 February 2004 adopting the Rules of Procedure of the European Central Bank was published in the Official Journal of the European Union (OJEU) 18.4.2008 L 100/10.



The decision is based on monthly rotation between governors.



Ralf Grahn

EU: Special legislative procedure (V)

Once in a blue moon a special legislative procedure facilitates change by replacing treaty level change including ratifications. We find an example concerning the excessive deficit procedure.

On the other hand, usually unanimous Council legislation according to a special legislative procedure is an indication that unanimity lacked in the first place and is hardly to be expected later. Despite catastrophic results, prudential supervision seems to be a case in point.

Our Odyssey of the Council of the European Union and the special legislative procedure, takes us through the consolidated version of the Lisbon Treaty, published in the Official Journal of the European Union (OJEU) 9.5.2008 C 115.


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Excessive deficit procedure

Article 126 of the Treaty on the Functioning of the European Union (TFEU) spells out principle (half forgotten due to the economic crisis) that EU member states shall avoid excessive government deficits. It then lays down the roles of the Commission, the Economic and Financial Committee and the Council leading to an assessment whether an excessive deficit exists, as well as recommendations and measures.

Additional provisions concerning the procedures are found in Protocol (No 12) on the excessive deficit procedure. The Protocol is legally binding and it contains treaty level provisions. Amending them would require both unanimous agreement and ratifications, but here the member states have agreed to facilitate change to a degree. The provisions of the Protocol may be replaced unanimously by a special legislative procedure, without time-consuming ratifications (Article 126(14) TFEU).


Article 126(4) TFEU

14. Further provisions relating to the implementation of the procedure described in this Article are set out in the Protocol on the excessive deficit procedure annexed to the Treaties.

The Council shall, acting unanimously in accordance with a special legislative procedure and after consulting the European Parliament and the European Central Bank, adopt the appropriate provisions which shall then replace the said Protocol.

Subject to the other provisions of this paragraph, the Council shall, on a proposal from the Commission and after consulting the European Parliament, lay down detailed rules and definitions for the application of the provisions of the said Protocol.


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ECB and prudential supervision

Article 127 TFEU sets out the objectives and the tasks of the European System of Central Banks (ESCB) and the European Central Bank (ECB). The ESCB shall contribute to the smooth conduct of policies pursued by the competent (national) authorities relating to the prudential supervision of credit institutions and the stability of the financial system.

Before the current financial and economic crisis, the member states’ governments we checked (United Kingdom, Sweden, Finland) congratulated themselves for retaining supervision at the national level. Even after the catastrophic results, leading to mind-boggling rescue operations involving EU-wide capital injections and guarantees of 3,000 billion euros, it is unsure to what extent the EU governments are prepared to create effective supervisory structures.

Just in case, the Lisbon Treaty contains the possibility to empower the European Central Bank, but subject to improbable unanimity and a special legislative procedure. The insurance sector is excluded even from the remote possibility.


Article 127(6) TFEU

6. The Council, acting by means of regulations in accordance with a special legislative procedure, may unanimously, and after consulting the European Parliament and the European Central Bank, confer specific tasks upon the European Central Bank concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings.


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We have seen one facilitating and one obstructing example of the special legislative procedure, where a unanimous Council is the main actor and the European Parliament is only consulted.



Ralf Grahn

European Central Bank: Procurement amendments

The European Central Bank has aligned its procurement rules with the Procurement Directive 2004/18/EC.

The ECB is going to use the amended EU thresholds, establish lists of suitable suppliers for contracts below the thresholds and exclude bidders guilty of criminal acts or having conflicting interests.


The Decision of the European Central Bank ECB/2009/2 of 27 January 2009 amending Decision ECB/2007/5 laying down the Rules on Procurement has been officially published in the Official Journal of the European Union (OJEU) 24.2.2009 L 51/10. The Decision enters into force on 1 March 2009.

The original Decision ECB/2007/5 of 3 July 2007 was published in the OJEU 14.7.2007 L 184/34.


Ralf Grahn

General Council of the European Central Bank

The European Central Bank (ECB) and the national central banks of the euro area form the European System of Central Banks (ESCB), or the Eurosystem. But at this moment twelve (soon eleven) EU member states are (still) outside the Eurozone.

The General Council of the European Central Bank is the transitional link between the Eurosystem and the EU members with a national currency and a so called derogation.

This blog post is dedicated to our readers in Bulgaria, the Czech Republic, Denmark, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia, Sweden and the United Kingdom.


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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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General Council of the ECB

Article 123(3) TEC sets up the General Council of the ECB as a transitional body:

Article 123(3) TEC

-----
3. If and as long as there are Member States with a derogation, and without prejudice to
Article 107(3) of this Treaty, the General Council of the ECB referred to in Article 45 of the
Statute of the ESCB shall be constituted as a third decision-making body of the ECB.
-----

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ECB decision-making bodies

Since the General Council of the ECB is seen as a transitory exception to the institutional framework of the European Central Bank, the referral to Article 107(3) TEC reminds us of the ordinary decision-making bodies of the ECB:

Article 107(3) TEC

-----
3. The ESCB shall be governed by the decision-making bodies of the ECB which shall be the Governing Council and the Executive Board.

-----

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General Council tasks

At the start of the second stage of economic and monetary union (EMU), the European Monetary Institute (EMI) was established to prepare the establishment of the European Central Bank (ECB) and the introduction of the euro currency (third stage of EMU).

Article 117(2) TEC mentions a number of EMI’s tasks. EMI has been replaced by the ECB.

Article 117(2) TEC

-----
2. The EMI shall:

— strengthen cooperation between the national central banks,

— strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability,

— monitor the functioning of the European Monetary System,

— hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets,

— take over the tasks of the European Monetary Cooperation Fund, which shall be dissolved; the modalities of dissolution are laid down in the Statute of the EMI,

— facilitate the use of the ecu and oversee its development, including the smooth functioning of
the ecu clearing system.
-----


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ESCB Statute

Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (1992), in the latest consolidated version of the treaties OJ 29.12.2006 C 321 E/256, has a Chapter IX Transitional and other provisions for the ESCB.

Article 43 General provision excludes member states with a derogation from enumerated rights and obligations.

Article 44 Transitional tasks of the ECB confers the tasks of the EMI on the ECB and sets out the advisory task of the ECB during the preparation of abrogation of derogations.

Article 45 The General Council of the ECB institutes the General Council as a third decision-making body of the ECB and sets out the institutional basics. Since Article 45 of the ESCB Statute is referred to in Article 123(3) TEC, here is the wording:

Article 45 ESCB Statute
The General Council of the ECB

45.1. Without prejudice to Article 107(3) of this Treaty, the General Council shall be constituted as a third decision-making body of the ECB.

45.2. The General Council shall comprise the President and Vice-President of the ECB and the Governors of the national central banks. The other members of the Executive Board may participate, without having the right to vote, in meetings of the General Council.

45.3. The responsibilities of the General Council are listed in full in Article 47 of this Statute.


Article 46 Rules of Procedure of the General Council.

Article 47 Responsibilities of the General Council.

Article 48 Transitional provisions for the capital of the ECB.

-----

Article 53 Applicability of the transitional provisions states that as long as there are member states with a derogation, Articles 43 to 48 shall be applicable.

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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-93 of the draft Constitution is a consolidation and update of the treaty provisions we looked at above:

SECTION 4
Transitional provisions

Article III-93 Draft Constitution

1. If and as long as there are Member States with a derogation, and without prejudice to Article III-79(3), the General Council of the European Central Bank referred to in Article 45 of the Statute of the European System of Central Banks and the European Central Bank shall be constituted as a third decisionmaking body of the European Central Bank.

2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:

(a) strengthen cooperation between the national central banks;

(b) strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability;

(c) monitor the functioning of the exchange-rate mechanism;

(d) hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets;

(e) carry out the former tasks of the European Monetary Cooperation Fund, previously taken over by the European Monetary Institute.



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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. A section discussed economic and monetary policy (8.5 Talous. ja rahapolitiikka) on pages 65 to 67, but I found nothing specific about Article III-93 of the draft Constitution.

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Sweden

Ahead of the intergovernmental conference, the Swedish government presented its views in a memorandum, Regeringens skrivelse 2003/04:13 Europeiska konventet om EU:s framtid (2 October 2003).

Sweden had not negotiated an opt-out from the treaty obligation to introduce the euro currency, but still the government had arranged a referendum on the adoption. The negative referendum result, which left Sweden in legal limbo, was fresh.

If the updated Article III-93 of the draft Constitution had little practical significance for Finland, the cursory treatment of transitional monetary provisions by the Swedish government may have had other reasons. Anyway, I found no specific mention of draft Constitution Article III-93 in the memorandum.

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de Poncins


Étienne de Poncins presented the text of Article III-93 in Vers une Constitution européenne (Éditions 10/18, 2003), page 315, 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-199 Constitution

1. If and as long as there are Member States with a derogation, and without prejudice to Article III-187(1), the General Council of the European Central Bank referred to in Article 45 of the Statute of the European System of Central Banks and of the European Central Bank shall be constituted as a third decision-making body of the European Central Bank.

2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:

(a) strengthen cooperation between the national central banks;

(b) strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability;

(c) monitor the functioning of the exchange-rate mechanism;

(d) hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets;

(e) carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.

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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 as a member state with a derogation, 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:

.
”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.”

The Swedish government did not mention Article III-199 of the Constitution specifically, although the national central bank (Sveriges Riksbank) participates in the General Council of the European Central Bank.

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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-199 of the Constitution on page 185. The government remarked on the essential similarity of Article III-199 with Article 123(3) TEC and Article 117(2) TEC save for technical adjustments. The Finnish government mentioned that Article III-199 applies to the states, which have not yet adopted the euro:


”III-199 artikla vastaa asiasisällöltään SEY 123 artiklan kolmatta kohtaa sekä SEY 117 artiklan toista kohtaa teknisiä muutoksia lukuun ottamatta. III-199 artikla koskee Euroopan keskuspankin yleisneuvostoa sekä Euroopan keskuspankin tehtäviä niihin valtioihin liittyen, jotka eivät ole vielä ottaneet euroa käyttöön.”


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Original Lisbon Treaty

In Article 2, point 103, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) managed to adopt the substance of the Convention and Constitution proposals, but the amendments were inserted in the ‘usual’, i.e. unreadable manner adopted by the IGC 2007 (OJ 17.12.2007 C 306/79).

This is the wording the EU citizens were offered until the belated publication of the consolidated versions of the Lisbon Treaty:
103) Article 118 shall be repealed. A new Article 118a shall be inserted as follows:

(a) paragraph 1 thereof shall take over the text of Article 123(3); the words ‘of this Treaty’ shall be deleted;

(b) paragraph 2 thereof shall take over the text of the first five indents of Article 117(2); the five indents shall be amended as set out below and shall be preceded by the following introductory words:

‘If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:’

(i) in the third indent, the words ‘European Monetary System’ shall be replaced by ‘exchange-rate mechanism’;

(ii) the fifth indent shall be replaced by the following:

‘— carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.’.


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Renumbering

The Treaty on the Functioning of the European Union (TFEU) table of equivalences confirms that the new Article 118a TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 141 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 141 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 115/110:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 5 Transitional provisions

Article 141 TFEU
(ex Articles 123(3) and 117(2) first five indents, TEC)

1. If and as long as there are Member States with a derogation, and without prejudice to Article 129(1), the General Council of the European Central Bank referred to in Article 44 of the Statute of the ESCB and of the ECB shall be constituted as a third decision-making body of the European Central Bank.

2. If and as long as there are Member States with a derogation, the European Central Bank shall, as regards those Member States:

— strengthen cooperation between the national central banks,

— strengthen the coordination of the monetary policies of the Member States, with the aim of ensuring price stability,

— monitor the functioning of the exchange-rate mechanism,

— hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets,

— carry out the former tasks of the European Monetary Cooperation Fund which had subsequently been taken over by the European Monetary Institute.

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ESCB Statute ─ transitional provisions

In the consolidated versions of the Lisbon Treaty, the Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Banks sets out the transitional EMU provisions in more detail in Chapter IX Transitional and other provisions for the ESCB (OJ 9.5.2008 C 115/247─250):

CHAPTER IX
TRANSITIONAL AND OTHER PROVISIONS FOR THE ESCB

Article 42 (ex Article 43)
General provisions

42.1. A derogation as referred to in Article 139 of the Treaty on the Functioning of the European Union shall entail that the following Articles of this Statute shall not confer any rights or impose any obligations on the Member State concerned: 3, 6, 9.2, 12.1, 14.3, 16, 18, 19, 20, 22, 23, 26.2, 27, 30, 31, 32, 33, 34, and 49.

42.2. The central banks of Member States with a derogation as specified in Article 139(1) of the Treaty on the Functioning of the European Union shall retain their powers in the field of monetary policy according to national law.

42.3. In accordance with Article 139 of the Treaty on the Functioning of the European Union, ‘Member States’ shall be read as ‘Member States whose currency is the euro’ in the following Articles of this Statute: 3, 11.2 and 19.

42.4. ‘National central banks’ shall be read as ‘central banks of Member States whose currency is the euro’ in the following Articles of this Statute: 9.2, 10.2, 10.3, 12.1, 16, 17, 18, 22, 23, 27, 30, 31, 32, 33.2 and 49.

42.5. ‘Shareholders’ shall be read as ‘central banks of Member States whose currency is the euro’ in Articles 10.3 and 33.1.

42.6. ‘Subscribed capital of the ECB’ shall be read as ‘capital of the ECB subscribed by the central banks of Member States whose currency is the euro’ in Articles 10.3 and 30.2.


Article 43 (ex Article 44)
Transitional tasks of the ECB

The ECB shall take over the former tasks of the EMI referred to in Article 141(2) of the Treaty on the Functioning of the European Union which, because of the derogations of one or more Member States, still have to be performed after the introduction of the euro.

The ECB shall give advice in the preparations for the abrogation of the derogations specified in Article 140 of the Treaty on the Functioning of the European Union.


Article 44 (ex Article 45)
The General Council of the ECB

44.1. Without prejudice to Article 129(3) of the Treaty on the Functioning of the European Union, the General Council shall be constituted as a third decision-making body of the ECB.

44.2. The General Council shall comprise the President and Vice-President of the ECB and the Governors of the national central banks. The other members of the Executive Board may participate, without having the right to vote, in meetings of the General Council.

44.3. The responsibilities of the General Council are listed in full in Article 46 of this Statute.


Article 45 (ex Article 46)
Rules of Procedure of the General Council

45.1. The President or, in his absence, the Vice-President of the ECB shall chair the General Council of the ECB.

45.2. The President of the Council and a Member of the Commission may participate, without having the right to vote, in meetings of the General Council.

45.3. The President shall prepare the meetings of the General Council.

45.4. By way of derogation from Article 12.3, the General Council shall adopt its Rules of Procedure.

45.5. The Secretariat of the General Council shall be provided by the ECB.

Article 46 (ex Article 47)
Responsibilities of the General Council

46.1. The General Council shall:

— perform the tasks referred to in Article 43;

— contribute to the advisory functions referred to in Articles 4 and 25.1.

46.2. The General Council shall contribute to:

— the collection of statistical information as referred to in Article 5;

— the reporting activities of the ECB as referred to in Article 15;

— the establishment of the necessary rules for the application of Article 26 as referred to in Article 26.4;

— the taking of all other measures necessary for the application of Article 29 as referred to in Article 29.4;

— the laying down of the conditions of employment of the staff of the ECB as referred to in Article 36.

46.3. The General Council shall contribute to the necessary preparations for irrevocably fixing the exchange rates of the currencies of Member States with a derogation against the euro as referred to in Article 140(3) of the Treaty on the Functioning of the European Union.

46.4. The General Council shall be informed by the President of the ECB of decisions of the Governing Council.


Article 47 (ex Article 48)
Transitional provisions for the capital of the ECB

In accordance with Article 29.1, each national central bank shall be assigned a weighting in the key for subscription of the ECB's capital. By way of derogation from Article 28.3, central banks of Member States with a derogation shall not pay up their subscribed capital unless the General Council, acting by a majority representing at least two thirds of the subscribed capital of the ECB and at least half of the shareholders, decides that a minimal percentage has to be paid up as a contribution to the operational costs of the ECB.


Article 48 (ex Article 49)
Deferred payment of capital, reserves and provisions of the ECB

48.1. The central bank of a Member State whose derogation has been abrogated shall pay up its subscribed share of the capital of the ECB to the same extent as the central banks of other Member States without a derogation, and shall transfer to the ECB foreign reserve assets in accordance with Article 30.1. The sum to be transferred shall be determined by multiplying the euro value at current exchange rates of the foreign reserve assets which have already been transferred to the ECB in accordance with Article 30.1, by the ratio between the number of shares subscribed by the national central bank concerned and the number of shares already paid up by the other national central banks.

48.2. In addition to the payment to be made in accordance with Article 48.1, the central bank concerned shall contribute to the reserves of the ECB, to those provisions equivalent to reserves, and to the amount still to be appropriated to the reserves and provisions corresponding to the balance of the profit and loss account as at 31 December of the year prior to the abrogation of the derogation. The sum to be contributed shall be determined by multiplying the amount of the reserves, as defined above and as stated in the approved balance sheet of the ECB, by the ratio between the number of shares subscribed by the central bank concerned and the number of shares already paid up by the other central banks.

48.3. Upon one or more countries becoming Member States and their respective national central banks becoming part of the ESCB, the subscribed capital of the ECB and the limit on the amount of foreign reserve assets that may be transferred to the ECB shall be automatically increased. The increase shall be determined by multiplying the respective amounts then prevailing by the ratio, within the expanded capital key, between the weighting of the entering national central banks concerned and the weighting of the national central banks already members of the ESCB. Each national central bank's weighting in the capital key shall be calculated by analogy with Article 29.1 and in compliance with Article 29.2. The reference periods to be used for the statistical data shall be identical to those applied for the latest quinquennial adjustment of the weightings under Article 29.3.


Article 49 (ex Article 52)
Exchange of banknotes in the currencies of the Member States

Following the irrevocable fixing of exchange rates in accordance with Article 140 of the Treaty on the Functioning of the European Union, the Governing Council shall take the necessary measures to ensure that banknotes denominated in currencies with irrevocably fixed exchange rates are exchanged by the national central banks at their respective par values.


Article 50 (ex Article 53)
Applicability of the transitional provisions

If and as long as there are Member States with a derogation, Articles 42 to 47 shall be applicable.

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Sweden

Even if Sweden is one of the EU member states with a derogation, the most artificial one at that, I found nothing about Article 118a TFEU (ToL) in the Lisbon Treaty ratification bill of the Swedish government, Regeringens proposition 2007/08:168 Lissabonfördraget (3 July 2008).

Have they confounded the properties of EMU, the economic and monetary union, with those of emu, the bird?


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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 characterization of Articles 141 to 144 TFEU is succinct:

« Les art. 141 à 144 TFUE comprennent les dispositions applicables aux États membres faisant l’objet d’une dérogation, sans changement notable. »

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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 141 TFEU (on page 13):

“Draws on and updates Articles 123(3) and 117(2) TEC.”

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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 118a TFEU (ToL), on page 64:

“A new Article 118a (Constitution Article III-199) updates present Articles 117(2) and 123(3), providing for Member States with a derogation from EMU the institutional machinery (including the European Monetary Institute and the General Council of the ECB) to monitor their progress towards the adoption of the euro.”


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Ironies

One of the ironies uncovered during this research was that the government of the EU member state most peculiarly affected by the transitional EMU provisions, i.e. Sweden, had nothing to say about the General Council of the European Central Bank in voluminous legislative materials.

Another irony is that the Lisbon Treaty, although not in force, is sometimes clearer and more up-to-date in its consolidated versions than the existing treaties, even where there are no ‘institutional innovations’ to speak of.

In other words, it is advisable to use the Treaty of Lisbon and commentaries on it as references, even if you study the EU treaties in force.



Ralf Grahn

European Central Bank: Regulatory powers

The European Central Bank needs legislative and decision-making powers in order to function as a central bank.


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Current treaty

Article 110 (ex Article 108a) of the Treaty establishing the European Community (TEC) sets out the regulatory powers conferred upon the European Central Bank (ECB), i.e. to legislate and to decide in order to fulfil its tasks as the central bank, in principle for the European Union, but in practice for the Eurosystem (euro area).

Here is the text of Article 110 TEC, from the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/89:

Article 110 TEC

1. In order to carry out the tasks entrusted to the ESCB, the ECB shall, in accordance with the provisions of this Treaty and under the conditions laid down in the Statute of the ESCB:

— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 and 25.2 of the Statute of the ESCB and in cases which shall be laid down in the acts of the Council referred to in Article 107(6),

— take decisions necessary for carrying out the tasks entrusted to the ESCB under this Treaty and the Statute of the ESCB,

— make recommendations and deliver opinions.

2. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.

Recommendations and opinions shall have no binding force.

A decision shall be binding in its entirety upon those to whom it is addressed.

Articles 253, 254 and 256 shall apply to regulations and decisions adopted by the ECB.

The ECB may decide to publish its decisions, recommendations and opinions.

3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 107(6), the ECB shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.


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Original Lisbon Treaty

In Article 2, point 95, of the original Treaty of Lisbon (ToL) the intergovernmental conference (IGC 2007) amended Article 110 (OJ 17.12.2007 C 306/74):

95) In Article 110, the first four subparagraphs of paragraph 2 shall be deleted.

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Renumbering

The TFEU table of equivalences confirms that Article 110 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 132 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII (OJ 17.12.2007 C 306/214).

(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.)

***

Consolidated Lisbon Treaty: TFEU

Article 132 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 115/104:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 2 Monetary policy

Article 132 TFEU
(ex Article 110 TEC)

1. In order to carry out the tasks entrusted to the ESCB, the European Central Bank shall, in accordance with the provisions of the Treaties and under the conditions laid down in the Statute of the ESCB and of the ECB:

— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 and 25.2 of the Statute of the ESCB and of the ECB in cases which shall be laid down in the acts of the Council referred to in Article 129(4),

— take decisions necessary for carrying out the tasks entrusted to the ESCB under the Treaties and the Statute of the ESCB and of the ECB,

— make recommendations and deliver opinions.

2. The European Central Bank may decide to publish its decisions, recommendations and opinions.

3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 129(4), the European Central Bank shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.

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Regulatory powers

The powers of the European Central Bank are limited generally by the treaties and the ESCB Statute; Article 110(1) TEC.

The legislative powers, to make regulations, are further limited by the enumerated provisions of the ESCB Statute and the acts of the Council mentioned; Article 110(1) TEC first indent. The instruments are called ECB Regulations.

The power to take binding decisions (ECB Decisions) is accompanied by the competence to impose sanctions for failure to comply, in accordance with Article 110(3) TEC.

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ESCB Statute

With minute differences, ESCB Statute Article 34 on legal acts reiterates the wording of Article 110 TEC. See Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (1992), OJ 29.12.2006 C 321 E/272-273:

CHAPTER VII
GENERAL PROVISIONS

Article 34 ESCB Statute
Legal acts

34.1. In accordance with Article 110 of this Treaty, the ECB shall:

— make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 or 25.2 and in cases which shall be laid down in the acts of the Council referred to in Article 42;

— take decisions necessary for carrying out the tasks entrusted to the ESCB under this Treaty and this Statute;

— make recommendations and deliver opinions.

34.2. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.

Recommendations and opinions shall have no binding force.
A decision shall be binding in its entirety upon those to whom it is addressed.

Articles 253, 254 and 256 of this Treaty shall apply to regulations and decisions adopted by the ECB.

The ECB may decide to publish its decisions, recommendations and opinions.

34.3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 42, the ECB shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.


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Summaries

How has the ECB used its regulatory powers?

The ECB booklet Legal framework of the Eurosystem and the European System of Central Banks – ECB legal acts and instruments (July 2008) presents summaries of the relevant ECB Regulations and ECB Decisions in the following areas:

– ECB institutional provisions;
– Monetary policy and operations;
– Payment and settlement systems (TARGET2);
– Banknotes and coins, means of payment and currency matters;
– Foreign reserves, foreign exchange and reserve management services;
– Statistics; and
– Fraud prevention, transparency and data protection.




Ralf Grahn

European Central Bank independence

This is one of the treaty provisions president Nicolas Sarkozy should read and remember, both as the acting president of the European Council and as the elected president of France.

We start to look at the European Union (European Community) treaty provisions in an expedited manner, presenting the current Article text, the Lisbon Treaty amendments and the consolidated text of the Treaty on the Functioning of the European Union (TFEU). Comments are kept to a minimum, unless discussion or other reasons precipitate us into a more lavish treatment.


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Article 108 (ex Article 107) of the Treaty establishing the European Community (TEC) sets out the independence of the European Central Bank (ECB), the national central banks and the members of their decision-making bodies (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321/88):

Article 108 TEC

When exercising the powers and carrying out the tasks and duties conferred upon them by this Treaty and the Statute of the ESCB, neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. The Community institutions and bodies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the ECB or of the national central banks in the performance of their tasks.

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Original Lisbon Treaty

In Article 2, point 93 of the original Treaty of Lisbon (ToL) the IGC 2007 amended Article 107 TEC and in point 94 it dealt with Article 109 TEC (OJ 17.12.2007 C 306/74):

In other words, there are no express amendments to Article 108 TEC.

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Renumbering

The TFEU table of equivalences confirms that Article 108 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 130 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII (OJ 17.12.2007 C 306/214).

(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

Article 130 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 115/104:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 2 Monetary policy

Article 130 TFEU
(ex Article 108 TEC)

When exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB and of the ECB, neither the European Central Bank, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body. The Union institutions, bodies, offices or agencies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the European Central Bank or of the national central banks in the performance of their tasks.

***

In the Treaty of Lisbon, the Statute of the European System of Central Banks and of the European Central Bank has become Protocol No 4 (OJ 9.5.2008 C 115/230), but the wording of Article 130 TFEU is faithfully reproduced.

Article 130 TFEU prohibits both taking and giving instructions.

Even after the mini-treaty, Article 131 TFEU requires the national legislation including the statutes of each national central bank to be compatible with the treaties and the ESCB Statute.

Independence of the national central bank is one of the admission criteria to the third stage of economic and monetary union (EMU), i.e. entering the Eurosystem. See Article 140(1) TFEU.


Ralf Grahn

European Central Bank IV: Article 129 TFEU

The current Treaty establishing the European Community (TEC) was ─ perhaps still is ─ destined to become the Treaty on the Functioning of the European Union (TFEU), and generally the so called innovations as agreed in the 2004 IGC were to be inserted into the Treaty by way of specific modifications ‘in the usual manner’ (points 17 and 18, pages 6 and 7).

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Original Lisbon Treaty

In Article 2, point 92 of the original Treaty of Lisbon (ToL) the IGC 2007 agreed on the following concerning Article 107 TEC (OJ 17.12.2007 C 306/74):

93) Article 107 shall be amended as follows:

(a) paragraphs 1 and 2 shall be deleted and paragraphs 3, 4, 5 and 6 shall be renumbered 1, 2, 3 and 4 respectively;

(b) in paragraph 4, renumbered 2, the words ‘Statute of the ESCB’ shall be replaced by the following: ‘Statute of the European System of Central Banks and of the European Central Bank, hereinafter referred to as “Statute of the ESCB and of the ECB”’;

(c) paragraph 5, renumbered 3, shall be replaced by the following:

‘3. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of the Statute of the ESCB and of the ECB may be amended by the European Parliament and the Council, acting in accordance with the ordinary legislative procedure. They shall act either on a recommendation from the European Central Bank and after consulting the Commission or on a proposal from the Commission and after consulting the European Central Bank.’.

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Renumbering

The TFEU table of equivalences confirms that Article 107 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 129 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII (OJ 17.12.2007 C 306/211─212).

(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

Article 129 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 115/103:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 2 Monetary policy

Article 129 TFEU
(ex Article 107 TEC)

1. The ESCB shall be governed by the decision-making bodies of the European Central Bank which shall be the Governing Council and the Executive Board.

2. The Statute of the European System of Central Banks and of the European Central Bank (hereinafter referred to as ‘the Statute of the ESCB and of the ECB’) is laid down in a Protocol annexed to the Treaties.

3. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of the Statute of the ESCB and of the ECB may be amended by the European Parliament and the Council, acting in accordance with the ordinary legislative procedure. They shall act either on a recommendation from the European Central Bank and after consulting the Commission or on a proposal from the Commission and after consulting the European Central Bank.

4. The Council, either on a proposal from the Commission and after consulting the European Parliament and the European Central Bank or on a recommendation from the European Central Bank and after consulting the European Parliament and the Commission, shall adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of the Statute of the ESCB and of the ECB.


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With this and the preceding blog post we are moving towards a much shorter treatment of the TEC and TFEU Articles, normally leaving out the intervening treaty reform stages and the detailed comments in order to wade through the treaties more quickly.

Ralf Grahn

European Central Bank III: Article III-187 Constitution

The intergovernmental conference (IGC 2004) amended the main institutional provision on the European System of Central Banks (ESCB) and the European Central Bank (ECB) in Article III-79 of the draft Constitution, proposed by the European Convention.


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In the Treaty establishing a Constitution for Europe, the provisions on monetary policy are located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 2 ‘Monetary policy’.

Article III-187 sets out a shorter text, by deleting the first two paragraphs of the draft Constitution, OJ 16.12.2004 C 310/82:

Article III-187 Constitution

1. The European System of Central Banks shall be governed by the decision-making bodies of the European Central Bank, which shall be the Governing Council and the Executive Board.

2. The Statute of the European System of Central Banks is laid down in the Protocol on the Statute of the European System of Central Banks and of the European Central Bank.

3. Article 5(1), (2) and (3), Articles 17 and 18, Article 19(1), Articles 22, 23, 24 and 26, Article 32(2), (3), (4) and (6), Article 33(1)(a) and Article 36 of the Statute of the European System of Central Banks and of the European Central Bank may be amended by European laws:

(a) either on a proposal from the Commission and after consultation of the European Central Bank;

(b) or on a recommendation from the European Central Bank and after consultation of the Commission.

4. The Council shall adopt the European regulations and decisions laying down the measures referred to in Article 4, Article 5(4), Article 19(2), Article 20, Article 28(1), Article 29(2), Article 30(4) and Article 34(3) of the Statute of the European System of Central Banks and of the European Central Bank. It shall act after consulting the European Parliament:

(a) either on a proposal from the Commission and after consulting the European Central Bank;

(b) or on a recommendation from the European Central Bank and after consulting the Commission.

***

The next post is going to present Constitutional Treaty Article III-187 as it appears in the Treaty of Lisbon.

Ralf Grahn

European Central Bank IIb: Legal materials on Article III-79 draft Constitution

Having made a textual comparison of the main institutional framework of the European System of Central Banks (ESCB) and the European Central Bank (ECB) in the current Treaty establishing the European Community (TEC) and in the draft Constitution, we turn to some legal materials and descriptions of the proposal of the European Convention in the draft Constitution.

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de Poncins

Étienne de Poncins presented the proposed text of Article III-78 of the draft Constitution in ‘Vers une Constitution européenne’ (Éditions 10/18, 2003), on page 303─304. His comment leads us to believe that the European Convention really intended the European Parliament to participate fully in the simplified revision procedures mentioned in paragraph 5:

« Commentaire : le paragraphe 5 autorise la modification du statut de la Banque centrale européenne. Actuellement cette législation requiert l’unanimité du Conseil et l’avis conforme du Parlement européen. La procédure législative sera d’application, le Conseil se prononçant à la majorité qualifié. »

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Sweden

Sweden remains outside the third phase of economic and monetary union (EMU), without an opt-out, but following the 14 September 2003 referendum. Still, the normal EU/EC institutions operate, in case of simplified revisions of the ESCB Statute or complementary legislation according to Article 42 of the Statute, which means that the member states with a derogation participate in the Council. In principle, these member states are seen as future participants in the Eurosystem.

I found no mention of Article III-79 in the Swedish government’s memorandum on the draft Constitution, ‘Europeiska konventet om EU:s framtid’ (Utrikesdepartementet, Departementsserien (Ds) 2003:58, 2003).

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Sweden

Ahead of the intergovernmental conference (IGC 2003─2004), but after the euro referendum, the government of Sweden made a reference to technical the participation of the European Parliament in certain matters pertaining to the ESCB Statute, in ‘Europeiska konventet om EU:s framtid’ (Regeringens skrivelse 2003/04:13, den 2 oktober 2003), on page 49 (in the last quoted sentence):

”Europeiska centralbankens tillsynsbefogenheter och stadgar

Konventet föreslår att beslutsregeln för överföring av tillsynsbefogenheter för den finansiella sektorn till Europeiska centralbanken (ECB) skall ändras. I dag krävs enhällighet i rådet och samtycke av Europaparlamentet. Förslaget innebär att rådet skall besluta med kvalificerad majoritet och att Europaparlamentet skall ges medbeslutande för en sådan överföring. Vidare föreslås att Europaparlamentet ges medbeslutande beträffande vissa frågor i stadgan för Europeiska centralbankssystemet.”

The Swedish government admitted the reasons for functioning decision-making within the eurozone and the interest of euro area members to effective representation in international financial institutions, but in between the government expressed its will to be included in the coordination processes generally (on page 50):

”Det kan finnas skäl för euroländerna att på olika sätt säkerställa ett väl fungerande beslutsfattande i euroområdet. Det är dock viktigt att samordningsprocesserna behåller sin gemensamma karaktär. Det är också förståeligt att euroländerna vill uppnå en effektiv representation av euroområdet i internationella finansiella institutioner.”


***

United Kingdom

The United Kingdom has opted out of the third stage of economic and monetary union (EMU). (In the latest consolidated version of the treaties, Protocol (No 25) on certain provisions relating to the United Kingdom of Great Britain and Northern Ireland, OJ 29.12.2006 C 321 E/299).
Between the European Convention and the intergovernmental conference, the UK government presented its general approach ─ most British ─ in ‘A Constitutional Treaty for the EU; The British Approach to the European Union Intergovernmental Conference 2003’ (Cm5934, September 2003), under Economic Governance on pages 34─35:

“74. Many of the issues discussed in the European Convention and raised in the draft Constitutional Treaty could have significant consequences for the future performance of EU economies. The draft Constitutional Treaty proposed by the Convention has proposed changes to the EU’s existing system of economic governance and other aspects of the EU fiscal framework; the institutional balance between the Union and Member States in economic policy coordination; and the role of the Eurogroup, the informal grouping of euro area finance ministers. The Government will oppose any such proposals which might lead to unnecessary rigidities or undermine the central role of Member States in determining their economic policies. It will work to ensure outcomes that will bolster stability, promote flexibility and enhance the ability of European countries to raise productivity and employment levels.

75. The draft Treaty does not alter the terms of the UK’s Economic and Monetary Union protocol (allowing the UK to decide whether or not to join the euro). This will need formally to be re-adopted on the conclusion of the IGC.”

***

Finland

Finland is part of Euroland.

The Finnish government, in ‘Valtioneuvoston selonteko Eduskunnalle konventin tuloksista ja valmistautumisesta hallitusten väliseen konferenssiin’ (VNS 2/2003 vp), mentioned the adoption of the (normal) legislative procedure concerning amendments to certain Articles of the ESCB Statute in draft Constitution Article III-79. The Finnish government remarked on the proposal to extend qualified majority voting in the Council of Ministers to amendments proposed by the Commission, not only the ECB. This had raised fears of weakening the position of the central bank, and the Finnish Convention delegates had resisted this amendment (page 66):
”Perustuslaillisella sopimuksella muutetaan myös joitakin päätöksentekomenettelyjä talous- ja rahapolitiikan alalla. Lainsäädäntömenettely ulotetaan kattamaan myös rahoituslaitosten valvontaa koskevien erityistehtävien siirtäminen EKP:lle (III-77 artikla) sekä EKP-järjestelmän perussäännön tiettyjen artiklojen muuttaminen (III-79 artikla). EKP:lle voidaan normaalia lainsäädäntömenettelyä noudattaen antaa erityistehtäviä jotka koskevat luottolaitosten sekä muiden rahoituslaitosten kuin vakuutusyritysten toiminnan vakauden valvontaa. Nykysopimuksessa tämä edellyttää neuvostossa yksimielisyyttä. Suomen taholta ei yhdistetyn valvontavastuun tavoittelua unionissa ole pidetty tarkoituksenmukaisena, koska kyse on erittäin herkkäluonteisista kysymyksistä joilla on myös taloudellisia vaikutuksia. EKP:n keskuspankin perussääntöä voidaan puolestaan jatkossa muuttaa ministerineuvostossa määräenemmistöllä myös komission, ei vain EKP:n aloitteesta. Tämän on pelätty heikentävän keskuspankin asemaa. Suomen edustajat konventissa vastustivatkin näitä muutoksia.”

***

The attentive reader, with an eye for detail, may have noticed that my initial text comparison did not bring all the aspects to the fore. Neither did the researched documents individually, but using several sources gives us a fuller picture of the Article studied.

We will follow the Article III-79 proposed by the European Convention as it reappears after the intergovernmental conferences leading to the signing of the Constitutional Treaty and the Treaty of Lisbon.

.
Ralf Grahn

European Central Bank IIa: Article III-79 draft Constitution

The European System of Central Banks (ESCB) and the European Central Bank (ECB) were part of the all-encompassing draft Treaty establishing a Constitution for Europe.

But did the European Convention propose any material or stylistic change to the existing provisions?

We look at the contents of the institutional basics in draft Constitution Article III-79.

***

Article III-79 of the draft Constitution, proposed by the European Convention, corresponds with Article 107 of the Treaty establishing the European Community (TEC), and it is located in Part III ‘The policies and functioning of the Union’, Title III ‘Internal policies and action’, Chapter II ‘Economic and monetary policy’, Section 2 ‘Monetary policy’.

Article III-79 draft Treaty establishing a Constitution for Europe is found in OJ 18.7.2003 C 169/42─43:

Article III-79 Draft Constitution

1. The European System of Central Banks shall be composed of the European Central Bank and of the national central banks.

2. The European Central Bank shall have legal personality.

3. The European System of Central Banks shall be governed by the decision-making bodies of the European Central Bank, which shall be the Governing Council and the Executive Board.

4. The Statute of the European System of Central Banks is laid down in the Protocol on the Statute of the European System of Central Banks and the European Central Bank.

5. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of the Statute of the European System of Central Banks and the European Central Bank may be amended by European laws:

(a) either on a proposal from the Commission after consultation of the European Central Bank;

(b) or on a recommendation from the European Central Bank after consultation of the Commission.

6. The Council of Ministers shall adopt the European regulations and decisions laying down the measures referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of the Statute of the System of European Central Banks and the European Central Bank. It shall act after consulting the European Parliament:

(a) either on a proposal from the Commission after consulting the European Central Bank;

(b) or on a recommendation from the European Central Bank after consulting the Commission.

***

Texts compared

The following differences can be noted between the current Article 107 TEC and Article III-79 draft Constitution:

The draft Constitution spells out the acronyms ESCB and ECB in full, for ease of reading.
In paragraph 4, the draft Constitution defined more exactly in which Protocol the ESCB Statute lay hidden; namely ‘the Protocol on the Statute of the European System of Central Banks and the European Central Bank’.

In paragraph 5, the simplified revision of certain provisions of the ESCB Statute referred to the existing Articles. This left the detailed work to the coming intergovernmental conference, if changes to the Statute were to be made. The Convention, preoccupied by the main institutional building-blocks of the European Union, left only a rudimentary collection of eight draft protocols and declarations in all.

The legal instruments to be used were defined as European laws. The two-pronged approach, either a recommendation from the ECB or a proposal from the Commission, was maintained, although they were mentioned in reverse order. No mention was made of the European Parliament, whereas the assent of the EP is required currently. On the other hand, paragraph 5 did not say that the Statute amendments were to be adopted by the Council (alone).

Was it a slip to drop the words ‘by the Council’, or did the Convention really mean to introduce the ordinary legislative procedure (European laws, with no qualification) for these enumerated simplified changes to the ESCB Statute?

On the other hand, although the potential scope for changes looked insignificant, when we studied Article 107(5) TEC, the ESCB Statute is, in principle, a treaty level document, so any exemption to normal treaty amending procedures (IGC and ratifications) might be seen as a serious matter.

The more important complementary legislation in paragraph 6 was re-written in the same manner as the preceding paragraph, but here the European regulations and decisions were to be adopted by the Council of Ministers, after consulting the European Parliament (as currently).

***
The next post is going to look at some legal materials concerning the European Convention proposal. With luck, we might even find an answer to the baffling legislative ‘minutiae’ mentioned above.


Ralf Grahn

European Central Bank Ih: Complementary ECB legislation

The European Central Bank (ECB) is operationally independent, within the limits of the treaty and the statute, but especially in matters concerning the member states, the national central banks or outside operators, certain additional parameters are subject to outside political control, with the Council as decision-maker.

We look at the system for complementary ECB legislation.

***

Article 107(6) of the Treaty establishing the European Community (TEC), in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/88, provides the legal base for certain provisions referred to in the ESCB Statute:

Article 107(6) TEC

6. The Council, acting by a qualified majority either on a proposal from the Commission and after consulting the European Parliament and the ECB or on a recommendation from the ECB and after consulting the European Parliament and the Commission, shall adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of the Statute of the ESCB.

***


Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (annexed to the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/256─280) contains the Articles referred to.

Article 4 ESCB Statute concerns the mandatory consultation of the European Central Bank on any proposed Community act in its fields of competence and by national authorities regarding any draft legislative provision in its fields of competence.

Article 42 ESCB Statute gave the Council an obligation to act:
Article 42 ESCB Statute
Complementary legislation

In accordance with Article 107(6) of this Treaty, immediately after the decision on the date for the beginning of the third stage, the Council, acting by a qualified majority either on a proposal from the Commission and after consulting the European Parliament and the ECB or on a recommendation from the ECB and after consulting the European Parliament and the Commission, shall adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of this Statute.

Pursuant to ESCB Statute Article 5.4, the Council, in accordance with the procedure laid down in Article 42, shall define the natural and legal persons subject to reporting requirements, the confidentiality regime and the appropriate provisions for enforcement.

According to ESCB Statute Article 19.2 the Council shall, in accordance with the procedure laid down in Article 42, define the basis for minimum reserves and the maximum permissible ratios between those reserves and their basis, as well as the appropriate sanctions in cases of noncompliance.

Article 20 ESCB Statute gives the ECB Governing Council the right to decide, by a majority of two thirds of the votes cast, upon the use of such other operational methods of monetary control as it sees fit, but within the scope of such methods defined by the Council, if they impose obligations on third parties.


Article 28.1 ESCB Statute concerns the capital of the ECB. Initially it was set at ECU (later euro) 5 000 million, but subject to later increases by such amounts as may be decided by the
Governing Council acting by the qualified majority provided for in Article 10.3, within the limits
and under the conditions set by the Council under the procedure laid down in Article 42.

ESCB Statute Article 29.2 regards the statistical data used to determine the ECB capital key subscription. The data shall be provided by the Commission in accordance with the rules adopted by the Council under the procedure provided for in Article 42.


Article 30.4 ESCB Statute provides for the possible transfer of additional foreign reserve assets from national central banks to the European Central Bank, within the limits and under the conditions set by the Council in accordance with the procedure laid down in Article 42.



Article 34.3 ESCB Statute provides for the Council to set the limits and the conditions of the fines and periodic penalty payments the ECB is entitled to impose on undertakings for failure to comply with obligations under its regulations and decisions.

***

At this stage, I leave it to the interested reader to look for the concrete Council Decisions and Regulations implementing ESCB Statute Article 42.


Ralf Grahn

European Central Bank Ig: Amending ESCB Statute

Amending the treaties of the European Union is a laborious (some would say impossible) process in a union of 27. All the same, the member states have negotiated voluminous treaties and protocols in fine detail. This leads to recurring needs for amendments when policies evolve and circumstances change.

The member states have generally put themselves in the place of Tantalus: Constant hunger and thirst, but no satisfaction.

Well, not totally. The enabling clause (passerelle) has been introduced to make simplified amendments possible, in details here and there.

***

Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (annexed to the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/256─280) is a treaty level document, in principle requiring the application of the rules for treaty amendment if something has to be changed.

Mercifully, the member states’ governments have agreed that some household rules can be tweaked without a full-scale intergovernmental conference and ratification in every EU member state.

***

Article 107(5) of the Treaty establishing the European Community (TEC) offers an ‘amendment light’ procedure for changing parts of the ESCB Statute. This ‘passerelle’ type provision is limited to certain Articles, and four EU bodies are involved in each change, with the representatives of the member states (the Council) making the decision.

Here is paragraph 5 on the scope of simplified amendments (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/88):

Article 107(5) TEC


5. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of the Statute of the ESCB may be amended by the Council, acting either by a qualified majority on a recommendation from the ECB and after consulting the Commission or unanimously on a proposal from the Commission and after consulting the ECB. In either case, the assent of the European Parliament shall be required.

***

For some people, enabling clauses are one more devious example of power-creep by ‘Brussels’ (although the European Central Bank is located in Frankfurt am Main), so we have to take a closer look at how the TEC places our distinct heritages and age-old freedoms at risk. In other words, we have to turn to the ESCB Statute to see what the Articles cover.

Article 5.1: Collecting statistical information.

Article 5.2: National central banks gathering statistical information.

Article 5.3: ECB rules for the collection, compilation and distribution of statistics.

Article 17: The ECB and the national central banks have the authority to open accounts
for credit institutions, public entities and other market participants and accept assets, including
book entry securities, as collateral.

Article 18: The ECB and the national central banks carry out open market and credit operations according to general principles established by the ECB.

Article 19.1: The ECB can determine the minimum reserve accounts credit institutions and national central banks have to hold, and the ECB can levy penalty interest and impose sanctions in case of non-compliance.

Article 22: the ECB may make regulations to ensure efficient and sound clearing and payment systems.

Article 23: The ECB and the national central banks can establish international relations with central banks and financial institutions in other countries and, where appropriate, with international organisations, and they can conduct international banking operations.

Article 24: the ECB and national central banks may enter into operations for their administrative purposes or for their staff.

Article 26: On annual financial accounts of the ECB and a consolidated ESCB balance sheet.

Article 32.2: Guidelines for determining each national central bank’s annual monetary income from its assets.

Article 32.3: An alternative method for determining the national central bank’s monetary income.

Article 32.4: Deductions from the monetary income.

Article 32.6: Clearing and settlement of monetary income.

Article 33.1(a): Allocation of the net profit of the ECB.

Article 36: The Governing Council lays down the conditions of employment of the staff of the ECB, and the Court of Justice has jurisdiction in disputes.

***

Most of the tasks listed above look necessary, if the ECB is to function as a central bank, so it is difficult to imagine the abolishment of (m)any powers. On the other hand, only a few of the Articles seem to leave any room for positive amendments, because the ECB appears to have the (necessary) power.

This leaves us puzzled.

Has the enabling clause for simplified amendments been written for (educational) reasons of principle or for fun?

Or are there concrete and practical reasons to anticipate amendments of the ESCB Statute?

I would be most pleased, if knowledgeable readers would care to comment.

Ralf Grahn

European Central Bank: Procurement rules

The ECB declares its commitment to the principle of cost-efficiency and to seeking the best value for money from the procurement of goods, services and works.

Still, the EC Procurement Directive (2004/18/EC) and the Financial Regulation (No 1605/2002) do not apply to the European Central Bank (ECB), but the ECB states that it respects the general principles of procurement law as reflected in the Procurement Directive and the Financial Regulation.

***

ESCB Statute

Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (ESCB Statute; annexed to the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/256─280) includes Article 11.6, which gives the Executive Board the authority to run the current business of the ECB:

11.6. The Executive Board shall be responsible for the current business of the ECB.

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ECB Rules of Procedure

More detailed rules are found in the Decision of the European Central Bank of 19 February 2004 adopting the Rules of Procedure of the European Central Bank (ECB/2004/2); OJ 18.3.2004 C 80/33.

Article 19 of the ECB Rules of Procedures sets out the main principles concerning procurement of goods and services for the ECB:

Article 19 ECB Rules of Procedure
Procurement

19.1. Procurement of goods and services for the ECB shall give due regard to the principles of publicity, transparency, equal access, non-discrimination and efficient administration.

19.2. Except for the principle of efficient administration, derogations may be made from the above principles in cases of urgency; for reasons of security or secrecy; where there is a sole supplier; for supplies from the national central banks to the ECB; to ensure the continuity of a supplier.

***

ECB Rules of Procurement

On these bases, the Decision of the European Central Bank of 3 July 2007 laying down the Rules on Procurement (ECB/2007/5), OJ 14.7.2007 L 184/34, created new procurement rules for the ECB, largely built on general EC legislation, but with details particular to the ECB and the ESCB.

***

EBC General Terms & Conditions

The ECB, like other contracting parties in a strong position, has set out its own standard terms for suppliers. These are presented separately (in English and German) for:

Services and Works (Dienst & Werk)

Purchase (Kauf)

There is a third set of standard terms, concerning construction work, available on the ECB web site in German (Vertragsbedingungen für Bauleistungen), perhaps an indication of the planned Headquarters Building in Frankfurt am Main.

For an overview of ECB procurement, go to:

http://www.ecb.europa.eu/ecb/jobsproc/proc/tenders/html/index.en.html


Ralf Grahn