The Proposed Constitution for Europe

Part III, Title III, Chapter I| Contents |Part III, Title III, Chapter III

TITLE III: INTERNAL POLICIES AND ACTION

Chapter II: Economic and monetary policy

Article III-69

  1. For the purposes set out in Article I 3, the activities of the Member States and the Union shall include, as provided in the Constitution, the adoption of an economic policy which is based on the close coordination of Member States' economic policies, on the internal market and on the definition of common objectives, and conducted in accordance with the principle of an open market economy with free competition.

  2. Concurrently with the foregoing, and as provided in the Constitution and in accordance with the procedures set out therein, these activities shall include a single currency, the euro, and the definition and conduct of a single monetary policy and exchange rate policy, the primary objective of both of which shall be to maintain price stability and, without prejudice to this objective, to support the general economic policies in the Union, in accordance with the principle of an open market economy with free competition.

  3. These activities of the Member States and the Union shall entail compliance with the following guiding principles: stable prices, sound public finances and monetary conditions and a stable balance of payments.

Section 1: Economic policy

Article III-70

Member States shall conduct their economic policies in order to contribute to the achievement of the Union's objectives, as defined in Article I 3, and in the context of the broad guidelines referred to in Article III 71(2). The Member States and the Union shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article III 69.

Article III-71

  1. Member States shall regard their economic policies as a matter of common concern and shall coordinate them within the Council of Ministers, in accordance with Article III 70.

  2. The Council of Ministers, on a recommendation from the Commission, shall formulate a draft for the broad guidelines of the economic policies of the Member States and of the Union, and shall report its findings to the European Council.

    The European Council, on the basis of the report from the Council of Ministers, shall discuss a conclusion on the broad guidelines of the economic policies of the Member States and of the Union. On the basis of this conclusion, the Council of Ministers shall adopt a recommendation setting out these broad guidelines. It shall inform the European Parliament of its recommendation.

  3. In order to ensure closer coordination of economic policies and sustained convergence of the economic performances of the Member States, the Council of Ministers, on the basis of reports submitted by the Commission, shall monitor economic developments in each of the Member States and in the Union, as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and shall regularly carry out an overall assessment.

    For the purpose of this multilateral surveillance, Member States shall forward information to the Commission on important steps taken by them in the field of their economic policy and such other information as they deem necessary.

  4. Where it is established, under the procedure referred to in paragraph 3, that the economic policies of a Member State are not consistent with the broad guidelines referred to in paragraph 2 or that they risk jeopardising the proper functioning of economic and monetary union, the Commission may address a warning to the Member State concerned. The Council of Ministers, on a recommendation from the Commission, may address the necessary recommendations to the Member State concerned. The Council of Ministers, on a proposal from the Commission, may decide to make its recommendations public.

    Within the scope of this paragraph, the Council of Ministers shall act without taking into account the vote of the representative of the Member State concerned, and a qualified majority shall be defined as the majority of the votes of the other Member States, representing at least three fifths of their population.

  5. The President of the Council of Ministers and the Commission shall report to the European Parliament on the results of multilateral surveillance. The President of the Council of Ministers may be invited to appear before the competent committee of the European Parliament if the Council of Ministers has made its recommendations public.

  6. European laws may lay down detailed rules for the multilateral surveillance procedure referred to in paragraphs 3 and 4.

Article III-72

  1. Without prejudice to any other procedures provided for by the Constitution, the Council of Ministers, on a proposal from the Commission, may adopt a European decision laying down the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products.

  2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council of Ministers, on a proposal from the Commission, may adopt a European decision granting, under certain conditions, Union financial assistance to the Member State concerned. The President of the Council of Ministers shall inform the European Parliament of the decision adopted.

Article III-73

  1. Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as "national central banks") in favour of Union institutions, bodies or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.

  2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.

Article III-74

  1. Any measure or provision, not based on prudential considerations, establishing privileged access by Union institutions, bodies or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States to financial institutions shall be prohibited.

  2. The Council of Ministers, on a proposal from the Commission, may adopt European regulations or decisions specifying definitions for the application of the prohibition referred to in paragraph 1. It shall act after consulting the European Parliament.

Article III-75

  1. The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.

  2. The Council of Ministers, on a proposal from the Commission, may adopt European regulations or decisions specifying definitions for the application of the prohibitions referred to in Article III 73 and in this Article. It shall act after consulting the European Parliament.

Article III-76

  1. Member States shall avoid excessive government deficits.

  2. The Commission shall monitor the development of the budgetary situation and of the stock of government debt in the Member States in order to identify gross errors. In particular it shall examine compliance with budgetary discipline on the basis of the following two criteria:

    (a) whether the ratio of the planned or actual government deficit to gross domestic product exceeds a reference value, unless:

    (i) either the ratio has declined substantially and continuously and reached a level that comes close to the reference value;

    (ii) or, alternatively, the excess over the reference value is only exceptional and temporary and the ratio remains close to the reference value;

    (b) whether the ratio of government debt to gross domestic product exceeds a reference value, unless the ratio is diminishing sufficiently and approaching the reference value at a satisfactory pace.

    The reference values are specified in the Protocol on the excessive deficit procedure.

  3. If a Member State does not fulfil the requirements under one or both of these criteria, the Commission shall prepare a report. The report of the Commission shall also take into account whether the government deficit exceeds government investment expenditure and take into account all other relevant factors, including the medium term economic and budgetary position of the Member State.

    The Commission may also prepare a report if, notwithstanding the fulfilment of the requirements under the criteria, it is of the opinion that there is a risk of an excessive deficit in a Member State.

  4. The Economic and Financial Committee shall formulate an opinion on the report of the Commission.

  5. If the Commission considers that an excessive deficit in a Member State exists or may occur, it shall address an opinion to the Member State concerned.

  6. The Council of Ministers shall, on a proposal from the Commission, having considered any observations which the Member State concerned may wish to make and after an overall assessment, decide whether an excessive deficit exists. In that case it shall adopt, according to the same procedures, recommendations addressed to the Member State concerned with a view to bringing that situation to an end within a given period. Subject to paragraph 8, those recommendations shall not be made public.

    Within the scope of this paragraph, the Council of Ministers shall act without taking into account the vote of the representative of the Member State concerned, and a qualified majority shall be defined as the majority of the votes of the other Member States, representing at least three fifths of their population.

  7. The Council of Ministers, on a recommendation from the Commission, shall adopt the European decisions and recommendations referred to in paragraphs 8 to 11. It shall act without taking into account the vote of the representative of the Member State concerned, and a qualified majority shall be defined as the majority of the other Member States, representing at least three fifths of their population.

  8. Where it establishes that there has been no effective action in response to its recommendations within the period laid down, the Council of Ministers may make its recommendations public.

  9. If a Member State persists in failing to put into practice the recommendations of the Council of Ministers, the Council of Ministers may adopt a European decision giving notice to the Member State to take, within a specified time limit, steps for the deficit reduction which is judged necessary by the Council of Ministers in order to remedy the situation.

    In such a case, the Council of Ministers may request the Member State concerned to submit reports in accordance with a specific timetable in order to examine the adjustment efforts of that Member State.

  10. As long as a Member State fails to comply with a European decision adopted in accordance with paragraph 9, the Council of Ministers may decide to apply or, as the case may be, intensify one or more of the following measures:

    (a) to require the Member State concerned to publish additional information, to be specified by the Council of Ministers, before issuing bonds and securities;

    (b) to invite the European Investment Bank to reconsider its lending policy towards the Member State concerned;

    (c) to require the Member State concerned to make a non-interest-bearing deposit of an appropriate size with the Union until the Council of Ministers considers that the excessive deficit has been corrected;

    (d) to impose fines of an appropriate size.

    The President of the Council of Ministers shall inform the European Parliament of the measures adopted.

  11. The Council of Ministers shall abrogate some or all of the measures referred to in paragraph 6 and paragraphs 8 to 10 if it considers the excessive deficit in the Member State concerned to have been corrected. If the Council of Ministers has previously made public recommendations, it shall state publicly, as soon as the decision under paragraph 8 has been abrogated, that there is no longer an excessive deficit in the Member State concerned.

  12. The rights to bring actions provided for in Articles III 265 and III 266 may not be exercised within the framework of paragraphs 1 to 6 or paragraphs 8 and 9.

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

    A European law of the Council of Ministers shall lay down the appropriate measures to replace the said Protocol. The Council of Ministers shall act unanimously after consulting the European Parliament and the European Central Bank.

    Subject to the other provisions of this paragraph, the Council of Ministers, on a proposal from the Commission, shall adopt European regulations or decisions laying down detailed rules and definitions for the application of the said Protocol. It shall act after consulting the European Parliament.

Section 2: Monetary policy

Article III-77

  1. The primary objective of the European System of Central Banks shall be to maintain price stability. Without prejudice to this objective, the European System of Central Banks shall support the general economic policies in the Union in order to contribute to the achievement of its objectives as laid down in Article I 3. The European System of Central Banks shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article III 69.

  2. The basic tasks to be carried out through the European System of Central Banks shall be:

    (a) to define and implement the Union's monetary policy;

    (b) to conduct foreign-exchange operations consistent with Article III 228;

    (c) to hold and manage the official foreign reserves of the Member States;

    (d) to promote the smooth operation of payment systems.

  3. Paragraph 2(c) shall be without prejudice to the holding and management by the governments of Member States of foreign exchange working balances.

  4. The European Central Bank shall be consulted:

    (a) on any proposed Union act in its fields of competence;

    (b) by national authorities regarding any draft legislative provision in its fields of competence, but within the limits and under the conditions set out by the Council of Ministers in accordance with the procedure laid down in Article III 79(6).

    The European Central Bank may submit opinions to the Union institutions, bodies or agencies or to national authorities on matters in its fields of competence.

  5. The European System of Central Banks shall contribute to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system.

  6. European laws may confer upon the European Central Bank specific tasks concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings. Such laws shall be adopted after consultation of the European Central Bank.

Article III-78

  1. The European Central Bank shall have the exclusive right to authorise the issue of euro bank notes in the Union. The European Central Bank and the national central banks may issue such notes. Only the bank notes issued by the European Central Bank and the national central banks shall have the status of legal tender within the Union.

  2. Member States may issue euro coins subject to approval by the European Central Bank of the volume of the issue. The Council of Ministers, on a proposal from the Commission, may adopt European regulations laying down measures to harmonise the denominations and technical specifications of all coins intended for circulation to the extent necessary to permit their smooth circulation within the Union. The Council of Ministers shall act after consulting the European Parliament and the European Central Bank.

Article III-79

  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.

Article III-80

When exercising the powers and carrying out the tasks and duties conferred upon them by the Constitution and the Statute of the European System of Central Banks and the European Central Bank, 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 or agencies, from any government of a Member State or from any other body. the Union institutions, bodies 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.

Article III-81

Each Member State shall ensure that its national legislation, including the statutes of its national central bank, is compatible with the Constitution and the Statute of the European System of Central Banks and the European Central Bank.

Article III-82

  1. In order to carry out the tasks entrusted to the European System of Central Banks, the European Central Bank shall, in accordance with the Constitution and under the conditions laid down in the Statute of the European System of Central Banks and the European Central Bank, adopt:

    (a) European 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 European System of Central Banks and the European Central Bank and in cases which shall be laid down in European regulations and decisions as referred to in Article III 79(6);

    (b) European decisions necessary for carrying out the tasks entrusted to the European System of Central Banks under the Constitution and the Statute of the European System of Central Banks and the European Central Bank;

    (c) recommendations and opinions.

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

  3. The Council of Ministers shall, under the procedure laid down in Article III 79(6), adopt the European regulations establishing the limits and conditions under which the European Central Bank shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its European regulations and decisions.

Article III-83

Without prejudice to the powers of the European Central Bank, a European law or framework law shall lay down the measures necessary for use of the euro as the single currency of the Member States. Such law or framework law shall be adopted after consultation of the European Central Bank.

Section 3: Institutional provisions

Article III-84

  1. The Governing Council of the European Central Bank shall comprise the members of the Executive Board of the European Central Bank and the Governors of the national central banks of the Member States without a derogation as referred to in Article III 91.

  2. (a) The Executive Board shall comprise the President, the Vice President and four other

    members.

    (b) The President, the Vice-President and the other members of the Executive Board shall be appointed from among persons of recognised standing and professional experience in monetary or banking matters by common accord of the governments of the Member States at the level of Heads of State or Government, on a recommendation from the Council of Ministers, after it has consulted the European Parliament and the Governing Council of the European Central Bank.

    Their term of office shall be eight years and shall not be renewable.

    Only nationals of Member States may be members of the Executive Board.

Article III-85

  1. The President of the Council of Ministers and a member of the Commission may participate, without having the right to vote, in meetings of the Governing Council of the European Central Bank.

    The President of the Council of Ministers may submit a motion for deliberation to the Governing Council of the European Central Bank.

  2. The President of the European Central Bank shall be invited to participate in meetings of the Council of Ministers when it is discussing matters relating to the objectives and tasks of the European System of Central Banks.

  3. The European Central Bank shall address an annual report on the activities of the European System of Central Banks and on the monetary policy of both the previous and the current year to the European Parliament, the Council of Ministers and the Commission, and also to the European Council. The President of the European Central Bank shall present this report to the Council of Ministers and to the European Parliament, which may hold a general debate on that basis.

    The President of the European Central Bank and the other members of the Executive Board may, at the request of the European Parliament or on their own initiative, be heard by the competent committees of the European Parliament.

Article III-86

  1. In order to promote coordination of the policies of Member States to the full extent needed for the functioning of the internal market, an Economic and Financial Committee is hereby set up.

  2. The Committee shall have the following tasks:

    (a) to deliver opinions at the request of the Council of Ministers or of the Commission, or on its own initiative, for submission to those institutions;

    (b) to keep under review the economic and financial situation of the Member States and of the Union and to report on it regularly to the Council of Ministers and to the Commission, in particular with regard to financial relations with third countries and international institutions;

    (c) without prejudice to Article III 247, to contribute to the preparation of the work of the Council of Ministers referred to in Article III 48, Article III 71(2), (3), (4) and (6), Articles III 72, III 74, III 75 and III 76, Article III 77(6), Article III 78(2), Article III 79(5) and (6), Articles III 83 and III 90, Article III 92(2) and (3), Article III 95, Article III 96(2) and (3) and Articles III 224 and III 228, and to carry out other advisory and preparatory tasks assigned to it by the Council of Ministers;

    (d) to examine, at least once a year, the situation regarding the movement of capital and the freedom of payments, as they result from the application of the Constitution and of Union acts; the examination shall cover all measures relating to capital movements and payments; the Committee shall report to the Commission and to the Council of Ministers on the outcome of this examination.

    The Member States, the Commission and the European Central Bank shall each appoint no more than two members of the Committee.

  3. The Council of Ministers, on a proposal from the Commission, shall adopt a European decision laying down detailed provisions concerning the composition of the Economic and Financial Committee. It shall act after consulting the European Central Bank and the Committee. The President of the Council of Ministers shall inform the European Parliament of that decision.

  4. In addition to the tasks set out in paragraph 2, if and as long as there are Member States with a derogation as referred to in Article III 91, the Committee shall keep under review the monetary and financial situation and the general payments system of those Member States and report regularly to the Council of Ministers and to the Commission on the matter.

Article III-87

For matters within the scope of Article III 71(4), Article III 76 with the exception of paragraph 13, Articles III 83, III 90 and III 91, Article III 92(3) and Article III 228, the Council of Ministers or a Member State may request the Commission to make a recommendation or a proposal, as appropriate. the Commission shall examine this request and submit its conclusions to the Council of Ministers without delay.

Section 3a: Provisions specific to member states which are part of the euro area

Article III-88

  1. In order to ensure that economic and monetary union works properly, and in accordance with the relevant provisions of the Constitution, measures specific to those Member States which are members of the euro area shall be adopted:

    (a) to strengthen the coordination of their budgetary discipline and surveillance of it;

    (b) to set out economic policy guidelines for them, while ensuring that they are compatible with those adopted for the whole of the Union and are kept under surveillance.

  2. For those measures set out in paragraph 1, only members of the Council of Ministers representing Member States which are part of the euro area shall vote. A qualified majority shall be defined as the majority of the votes of the representatives of the Member States which are part of the euro area, representing at least three fifths of their population. Unanimity of those members of the Council of Ministers shall be required for an act requiring unanimity.

Article III-89

Arrangements for meetings between ministers of those Member States which are part of the euro area shall be laid down in the Protocol on the Euro Group.

Article III-90

  1. In order to secure the euro's place in the international monetary system, the Council of Ministers, on a proposal from the Commission and after consulting the European Central Bank, shall adopt a European decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences.

  2. For the measures referred to in paragraph 1, only members of the Council of Ministers representing Member States which are part of the euro area shall vote. A qualified majority shall be defined as the majority of the votes of the representatives of the Member States which are part of the euro area, representing at least three fifths of their population. Unanimity of those members of the Council of Ministers shall be required for an act requiring unanimity.

  3. The Council of Ministers, on a proposal from the Commission, may adopt appropriate measures to ensure unified representation within the international financial institutions and conferences. The procedural provisions of paragraphs 1 and 2 shall apply.

Section 4: Transitional provisions

Article III-91

  1. Member States which the Council of Ministers has decided do not fulfil the necessary conditions for the adoption of the euro shall hereinafter be referred to as "Member States with a derogation".

  2. The following provisions of the Constitution shall not apply to Member States with a derogation:

    (a) adoption of the parts of the broad economic-policy guidelines which concern the euro area generally (Article III 71(2));

    (b) coercive means of remedying excessive deficits (Article III 76(9) and (10));

    (c) the objectives and tasks of the European System of Central Banks (Article III 77(1), (2), (3) and (5));

    (d) issue of the euro (Article III 78);

    (e) acts of the European Central Bank (Article III 82);

    (f) measures governing the use of the euro (Article III 83);

    (g) monetary agreements and other measures relating to exchange-rate policy (Article III 228);

    (h) appointment of members of the Executive Board of the European Central Bank (Article III 84(2)(b)).

    In the Articles referred to above, "Member States" shall therefore mean Member States without a derogation.

  3. Under Chapter IX of the Statute of the European System of Central Banks and the European Central Bank, Member States with a derogation and their national central banks are excluded from rights and obligations within the European System of Central Banks.

  4. The voting rights of members of the Council of Ministers representing Member States with a derogation shall be suspended for the adoption by the Council of Ministers of the measures referred to in the Articles listed in paragraph 2. A qualified majority shall be defined as a majority of the votes of the representatives of the Member States without a derogation, representing at least three fifths of their population. Unanimity of those Member States shall be required for any act requiring unanimity.

Article III-92

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

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

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

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

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

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

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

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

Article III-93

  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 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, previously taken over by the European Monetary Institute.

Article III-94

Each Member State with a derogation shall treat its exchange rate policy as a matter of common interest. In so doing, it shall take account of the experience acquired in cooperation within the framework of the exchange-rate mechanism.

Article III-95

  1. Where a Member State with a derogation is in difficulties or is seriously threatened with difficulties as regards its balance of payments either as a result of an overall disequilibrium in its balance of payments, or as a result of the type of currency at its disposal, and where such difficulties are liable in particular to jeopardise the functioning of the internal market or the implementation of the common commercial policy, the Commission shall immediately investigate the position of the State in question and the action which, making use of all the means at its disposal, that State has taken or may take in accordance with the Constitution. the Commission shall state what measures it recommends the Member State concerned to adopt.

    If the action taken by a Member State with a derogation and the measures suggested by the Commission do not prove sufficient to overcome the difficulties which have arisen or which threaten, the Commission shall, after consulting the Economic and Financial Committee, recommend to the Council of Ministers the granting of mutual assistance and appropriate methods.

    The Commission shall keep the Council of Ministers regularly informed of the situation and of how it evolves.

  2. The Council of Ministers shall grant such mutual assistance; it shall adopt European regulations or decisions laying down the conditions and details of such assistance, which may take such forms as:

    (a) a concerted approach to or within any other international organisations to which Member States with a derogation may have recourse;

    (b) measures needed to avoid deflection of trade where the Member State with a derogation which is in difficulties maintains or reintroduces quantitative restrictions against third countries;

    (c) the granting of limited credits by other Member States, subject to their agreement.

  3. If the mutual assistance recommended by the Commission is not granted by the Council of Ministers or if the mutual assistance granted and the measures taken are insufficient, the Commission shall authorise the Member State with a derogation which is in difficulties to take protective measures, the conditions and details of which the Commission shall determine.

    Such authorisation may be revoked and such conditions and details may be changed by the Council of Ministers.

Article III-96

  1. Where a sudden crisis in the balance of payments occurs and an act within the meaning of Article III 95(2) is not immediately adopted, a Member State with a derogation may, as a precaution, take the necessary protective measures. Such measures must cause the least possible disturbance in the functioning of the internal market and must not be wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen.

  2. The Commission and the other Member States shall be informed of such protective measures not later than when they enter into force. the Commission may recommend to the Council of Ministers the granting of mutual assistance under Article III 95.

  3. After the Commission has delivered an opinion and the Economic and Financial Committee has been consulted, the Council of Ministers may adopt a decision stipulating that the Member State concerned shall amend, suspend or abolish the protective measures referred to above.

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