CONTENTS
HEADS Introduction of signatories
TITLE1 Common Provisions
TITLE2 Provisions Amending the Treaty Establishing the European
Ecomonic Community with a View to Establishing the European
Community
TITLE3 Provisions Amending the Treaty Establishing the European
Coal and Steel Community
TITLE4 Provisions Amending the Treaty Establishing the European
Atomic Energy Community
TITLE5 Provisions on a Common Foreign & Security Policy
TITLE6 Provisions on Cooperation in the Fields of Justice & Home
Affairs
TITLE7 Final Provisions
PROTOCOLS Protocols (broken up into Protocols 1-5 and Protocols 6-17)
Final Act
May of 1992 Declaration on Protocol No. 17, made on the 1st May 1992
TITLE2
PROVISIONS AMENDING THE TREATY ESTABLISHING THE
EUROPEAN ECONOMIC COMMUNITY WITH A VIEW TO ESTABLISHING
THE EUROPEAN COMMUNITY
ARTICLE G
The Treaty establishing the European Economic Community shall be
amended in accordance with the provisions of this Article, in order to
establish a European Community.
A. Throughout the Treaty:
1) The term "European Economic Community" shall be replaced by the
term "European Community".
B. In Part One "Principles":
2) Article 2 shall be replaced by the following:
"ARTICLE 2
The Community shall have as its task, by establishing a common
market and an economic and monetary union and by implementing the
common policies or activities referred to in Articles 3 and 3a, to
promote throughout the Community a harmonious and balanced
development of economic activities, sustainable and non-inflationary
growth respecting the environment, a high degree of convergence of
economic performance, a high level of employment and of social
protection, the raising of the standard of living and quality of life, and
economic and social cohesion and solidarity among Member States.'
3) Article 3 shall be replaced by the following:
"ARTICLE 3
For the purposes set out in Article 2, the activities of the Community
shall include, as provided in this Treaty and in accordance with the
timetable set out therein:
(a) the elimination, as between Member States, of customs duties and
quantiative restrictions on the import and export of goods, and of all
other measures having equivalent effect;
(b) a common commercial policy;
(c) an internal market characterized by the abolition, as between
Member States of obstacles to the free movement of goods, persons,
services and capital;
(d) measures concerning the entry and movement of persons in the
internal market as provided for in Article l00c;
(e) a common policy in the sphere of agriculture and fisheries;
(f) a common policy in the sphere of transport;
(g) a system ensuring that competition in the internal market is not
distorted;
(h) the approximation of the laws of Member States to the extent
required for the functioning of the common market;
(i) a policy in the social sphere comprising a European Social Fund;
(j) the strengthening of economic and social cohesion;
(k) a policy in the sphere of the environment;
(l) the strengthening of the competitiveness of Community industry;
(m) the pomotion of research and technological development;
(n) encouragement for the establishment and development of transEuropean
networks;
(o) a contribution to the attainment of a high level of health protection;
(p) a contribution to education and training of quality and to the
flowering of the cultures of the Member States;
(q) a policy in the sphere of development co-operation;
(r) the association of the overseas countries and territories in order to
increase trade and promote jointly economic and social development;
(s) a contribution to the strengthening of consumer protection;
(t) measures in the spheres of energy, civil protection and tourism."
4) The following Article shall be inserted:
"ARTICLE 3a
1. For the purposes set out in Article 2, the activities of the Member
States and the Community shall include, as provided in this Treaty
and in accordance with the timetable set out therein, the adoption of an
economic policy which is based on the close co-ordination 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 this Treaty and
in accordance with the timetable and the procedures set out therein,
these activities shall include the irrevocable fixing of exchange rates
leading to the introduction of a single currency, the ECU, 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 Community, in accordance with the principle
of an open market economy with free competition.
3. These activities of the Member States and the Community shall
entail compliance with the following guiding principles: stable prices,
sound public finances and monetary conditions and a sustainable
balance of payments."
5) The following Article shall be inserted:
"ARTICLE 3b
The Community shall act within the limit of the powers conferred upon
it by this Treaty and of the objectives assigned to it therein.
In areas which do not fall within its exclusive competence, the
Community shall take action, in accordance with the principle of
subsidiarity, only if and in so far as the objectives of the proposed
action cannot be sufficiently achieved by the Member States and can
therefore, by reason of the scale or effects of the proposed action, be
better achieved by the Community.
Any action by the Community shall not go beyond what is necessary to
achieve the objectives of this Treaty."
6) Article 4 shall be replaced by the following:
"ARTICLE 4
- The tasks entrusted to the Community shall be carried out by the
following institutions:
- a EUROPEAN Parliament,
- a COUNCIL,
- a COMMISSION,
- a COURT OF JUSTICE,
- a COURT OF AUDITORS.
Each institution shall act within the limits of the powers conferred upon
it by this Treaty.
- The Council and the Commission shall be assisted by an Economic
and Social Committee and a Committee of the Regions acting in an
advisory capacity."
7) The following Articles shall be inserted:
"ARTICLE 4a
A European System of Central Banks (hereinafter referred to as
"ESCB") and a European Central Bank (hereinafter referred to as
"ECB") shall be established in accordance with the procedures laid
down in this Treaty; they shall act within the limits of the powers
conferred upon them by this Treaty and by the Statute of the ESCB and
of the ECB (hereinafter referred to as "Statute of the ESCB") annexed
thereto.
ARTICLE 4b
A European Investment Bank is hereby established, which shall act
within the limit of the powers conferred upon it by this Treaty and the
Statute annexed thereto."
8) Article 6 shall be deleted and Article 7 shall become Article
- Its second paragraph shall be replaced by the following:
"The Council, acting in accordance with the procedure referred to in
Article 189c, may adopt rules designed to prohibit such
discrimination."
9) Articles 8, 8a, 8b and 8c shall become respectively Article 7, 7a, 7b
and 7c.
- The following Part shall be inserted:
"PART TWO
CITIZENSHIP OF THE UNION
ARTICLE 8
- Citizenship of the Union is hereby established.
Every person holding the nationality of a Member State shall be a
citizen of the Union.
- Citizens of the Union shall enjoy the rights conferred by this Treaty
and shall be subject to the duties imposed thereby.
ARTICLE 8a
- Every citizen of the Union shall have the right to move and reside
freely within the territory of the Member States, subject to the
limitations and conditions laid down in this Treaty and by the
measures adopted to give it effect.
- The Council may adopt provisions with a view to facilitating the
exercise of the rights referred to in paragraph 1; save as otherwise
provided in this Treaty, the Council shall act unanimously on a
proposal from the Commission after obtaining the assent of the
European Parliament.
ARTICLE 8b
- Every citizen of the Union residing in a Member State of which he is
not a national shall have the right to vote and to stand as a candidate
at municipal elections in the Member State in which he resides, under
the same conditions as nationals of that State. This right shall be
exercised subject to detailed arrangements to be adopted before 31
December 1994 by the Council, acting unanimously, on a proposal
from the Commission and after consulting the European Parliament;
these arrangements may provide for derogations where warranted by
problems specific to a Member State.
- Without prejudice to Article 1 38(3) and to the provisions adopted for
its implementation, every citizen of the Union residing in a Member
State of which he is not a national shall have the right to vote and to
stand as a candidate in elections to the European Parliament in the
Member State in which he resides, under the same conditions as
nationals of that State. This right shall be exercised subject to detailed
arrangements to be adopted before 31 December 1993 by the Council,
acting unanimously on a proposal from the Commission and after
consulting the European Parliament; these arrangements may provide
for derogations where warranted by problems specific to a Member
State.
ARTICLE 8c
Every citizen of the Union shall, in the territory of a third country in
which the Member State of which he is a national is not represented,
be entitled to protection by the diplomatic or consular authorities of
any Member State, on the same conditions as the nationals of that
State. Before 31 December 1993, Member States shall establish the
necessary rules among themselves and start the international
negotiations required to secure this protection.
ARTICLE 8d
Every citizen of the Union shall have the right to petition the European
Parliament in accordance with Article 138d.
Every citizen of the Union may apply to the Ombudsman established
in accordance with Article 138e.
ARTICLE 8e
The Commission shall report to the European Parliament, to the
Council and to the Economic and Social Committee before 31
December 1993 and then every three years on the application of the
provisions of this Part. This report shall take account of the
development of the Union.
On this basis, and without prejudice to the other provisions of this
Treaty, the Council, acting unanimously on a proposal from the
Commission and after consulting the European Parliament, may adopt
provisions to strengthen or to add to the rights laid down in this Part,
which it shall recommend to the Member States for adoption in
accordance with their respective constitutional requirements."
- Parts Two and Three shall be grouped under the following Title:
"PART THREE
COMMUNITY POLICIES"
and in this Part:
10) The first sentence of Article 49 shall be replaced by the following:
"As soon as this Treaty enters into force, the Council shall, acting in
accordance with the procedure referred to in Article 189b and after
consulting the Economic and Social Committee, issue directives or
make regulations setting out the measures required to bring about, by
progressive stages, freedom of movement for workers, as defined in
Article 48, in particular."
11) Article 54(2) shall be replaced by the following:
"2. In order to implement this general programme or, in the absence of
such programme, in order to achieve a stage in attaining freedom of
establishment as regards a particular activity, the Council, acting in
accordance with the Procedure referred to in Article 189b and after
consulting the Economic and Social Committee, shall act by means of
directives."
12) Article 56(2) shall be replaced by the following:
"2. Before the end of the transitional period, the Council shall, acting
unanimously on a proposal from the Commission and after consulting
the European Parliament, issue directives for the co-ordination of the
above mentioned provisions laid down by law, regulation or
administrative action. After the end of the second stage, however, the
Council shall, acting in accordance with the procedure referred to in
Article 189b, issue directives for the co-ordination of such provisions
as, in each Member State, are a matter for regulation or administrative
action."
13) Article 57 shall be replaced by the following:
"ARTICLE 57
- In order to make it easier for persons to take up and pursue
activities as self-employed persons, the Council shall, acting in
accordance with the procedure referred to in Article 189b, issue
directives for the mutual recognition of diplomas, certificates and other
evidence of formal qualifications.
- For the same purpose, the Council shall, before the end of the
transitional period, issue directives for the co-ordination of the
provisions laid down by law, regulation or administrative action in
Member States concerning the taking up and pursuit of activities as
self-employed persons. The Council, acting unanimously on a
proposal from the Commission and after consulting the European
Parliament, shall decide on directives the implementation of which
involves in at least one Member State amendment of the existing
principles laid down by law governing the professions with respect to
training and conditions of access for natural persons. In other cases
the Council shall act in accordance with the procedure referred to in
Article 189b.
- In the case of the medical and allied and pharmaceutical
professions, the progressive abolition of restrictions shall be
dependent upon co-ordination of the conditions for their exercise in the
various Member States."
14) The title of Chapter 4 shall be replaced by the following:
"CHAPTER 4
CAPITAL AND PAYMENTS"
15) The following Articles shall be inserted:
"ARTICLE 73a
As from 1 January 1994, Articles 67 to 73 shall be replaced by Articles
73b, c, d, e, f and g.
ARTICLE 73b
1. Within the framework of the provisions set out in this Chapter, all
restrictions on the movement of capital between Member States and
between Member States and third countries shall be prohibited.
2. Within the framework of the provisions set out in this Chapter, all
restrictions on payments between Member States and between
Member States and third countries shall be prohibited.
ARTICLE 73c
1. The Provisions of Article 73b shall be without prejudice to the
application to third countries, of any restrictions which exist on 31
December 1993 under national or Community law adopted in respect
of the movement of capital to or from third countries involving direct
investment - including investment in real estate - establishment, the
provision of financial services or the admission of securities to capital
markets.
2. Whilst endeavouring to achieve the objective of free movement of
capital between Member States and third countries to the greatest
extent possible and without prejudice to the other Chapters of this
Treaty, the Council may, acting by a qualified majority on a proposal
from the Commission, adopt measures on the movement of capital to
or from third countries involving direct investment - including
investment in real estate -, establishment, the provision of financial
services or the admission of securities to capital markets. Unanimity
shall be required for measures under this paragraph which constitute
a step back in Community law as regards the liberalization of the
movement of capital to or from third countries.
ARTICLE 73d
1. The provisions of Article 73b shall be without prejudice to the right
of Member States:
(a) to apply the relevant provision of their tax law which distinguish
between tax-payers who are not in the same situation with regard to
their place of residence or with regard to the place where their capital
is invested;
(b) to take all requisite measures to prevent infringement of national
law and regulations, in particular in the field taxation and the
prudential supervision of financial institutions, or to lay down
procedures for the declaration of capital movements for purposes of
administrative or statistical information, or to take measures which are
justified on grounds of public policy or public security.
2. The provisions of this Chapter shall be without prejudice to the
applicability of restrictions on the right of establishment which are
compatible with this Treaty.
3. The measures and procedures referred to in paragraphs 1 and 2
shall not constitute a means of arbitrary discrimination or a disguised
restriction on the free movement of capital and payments as defined in
Article 73b.
ARTICLE 73e
By way of derogation from Article 73b, Member States which, on 31
December 1993, enjoy a derogation on the basis of existing
Community law, shall be entitled to maintain, until 31 December 1995
at the latest, restrictions on movement of capital authorized by such
derogations as exist on that date.
ARTICLE 73f
Where, in exceptional circumstances, movement of capital to or from
third countries cause, or threaten to cause, serious difficulties for the
operation of economic and monetary union, the Council, acting by a
qualified majority on a proposal from the Commission and after
consulting the ECB, may take safeguard measures with regard to third
countries for a period not exceeding six months if such measures are
strictly necessary.
ARTICLE 73g
1. If, in the cases envisaged in Article 228a, action by the Community
is deemed necessary, the Council may, in accordance with the
procedure provided for in Article 228a, take the necessary urgent
measures on the movement of capital and on payments as regards the
third countries concerned.
2. Without prejudice to Article 224 and as long as the Council has not
taken measures pursuant to paragraph 1, a Member State may, for
serious political reasons and on grounds of urgency, take unilateral
measures against a third country with regard to capital movements
and payments. The Commission and the other Member States shall be
informed of such measures by the date of their entry into force at the
latest.
The Council may, acting by a qualified majority on a proposal from the
Commission, decide that the Member State concerned shall amend or
abolish such measures. The President of the Council shall inform the
European Parliament of any such decision taken by the Council.
ARTICLE 73h
Until 1 January 1994, the following provisions shall be applicable:
1) Each Member State undertakes to authorize, in the currency of the
Member State in which the creditor or the beneficiary resides, any
payment connected with the movement of goods, services or capital,
and any transfers of capital and earnings, to the extent that the
movement of goods, services, capital and persons between Member
States has been liberalized pursuant to this Treaty.
The Member States declare their readiness to undertake the
liberalization of payments beyond the extent provided in the preceding
subparagraph, in so far as their economic situation in general and the
state of their balance of payment in particular so permit.
2) In so far as movement of goods, services and capital are limited
only by restrictions on payments connected therewith, these
restrictions shall be progressively abolished by applying, mutatis
mutandis, the provisions of this Chapter and the Chapters relating to
the abolition of qualitative restrictions and to the liberalization of
services.
3) Member States undertake not to introduce between themselves any
new restrictions on transfers connected with the invisible transactions
listed in Annex III to this Treaty.
The progressive abolition of existing restrictions shall be effected in
accordance with the provisions of Articles 63 to 65, in so far as such
abolition is not governed by the provisions contained in paragraphs 1
and 2 or by the other provisions of this Chapter.
4) If need be, Member States shall consult each other on the measures
to be taken to enable the payment and transfers mentioned in this
Article to be effected; such measures shall not prejudice the
attainment of the objectives set out in this Treaty."
16) Article 75 shall be replaced by the following:
"ARTICLE 75
- For the purpose of implementing Article 74, and taking into account
the distinctive features of transport, the Council shall, acting in
accordance with the procedure referred to in Article 189c and after
consulting the Economic and Social Committee, lay down:
(a) common rules applicable to international transport to or from the
territory of a Member State or passing across the territory of one or
more Member States;
(b) the conditions under which non-resident carriers may operate
transport services within a Member State;
(c) measures to improve transport safety;
(d) any other appropriate provisions.
- The Provisions referred to in (a) and (b) of paragraph 1 shall be laid
down during the transitional period.
- By way of derogation from the procedure provided for in paragraph
1, where the application of provisions concerning the principles of the
regulatory system for transport would be liable to have a serious
effect on the standard of living and on employment in certain areas
and on the operation of transport facilities, they shall be laid down by
the Council acting unanimously on a proposal from the Commission,
after consulting the European Parliament and the Economic and Social
Committee. In so doing, the Council shall take into account the need
for adaptation to the economic development which will result from
establishing the common market."
17) The title of Title I in Part Three shall be replaced by, the following:
"TITLE V
Common rules on competition and approximation of laws"
18) In Article 92(3):
- the following point shall be inserted:
"(d) aid to promote culture and heritage conservation where such aid
does not affect trading conditions and competition in the Community to
an extent that is contrary to the common interest."
- the present point (d) shall become (e).
19) Article 94 shall be replaced by the following:
"ARTICLE 94
The Council, acting by a qualified majority on a proposal from the
Commission and after consulting the European Parliament, may make
any appropriate regulations for the application of Articles 92 and 93
and may in particular determine the conditions in which Article 93(3)
shall apply and the categories of aid exempted from this procedure."
20) Article 99 shall be replaced by the following:
"ARTICLE 99
The Council shall, acting unanimously on a proposal from the
Commission and after consulting the European Parliament and the
Economic and Social Committee, adopt provisions for the
harmonization of legislation concerning turnover taxes, excise duties
and other forms of indirect taxation to the extent that such
harmonization is necessary to ensure the establishment and the
functioning of the internal market within the time limit laid down in
Article 7a."
21) Article 100 shall be replaced by the following:
"ARTICLE 100
The Council shall, acting unanimously on a proposal from the
Commission and after consulting the European Parliament and the
Economic and Social Committee, issue directives for the
approximation of such laws, regulations or administrative provisions
of the Member States as directly affects the establishment or
functioning of the common market."
22) Article l00a(1) shall be replaced by the following:
"1. By way of derogation from Article 100 and save where otherwise
provided in this Treaty, the following provisions shall apply for the
achievement of the objectives set out in Article 7a. The Council shall,
acting in accordance with the procedure referred to in Article 189b and
after consulting the Economic and Social Committee, adopt the
measures for the approximation of the provisions laid down by law,
regulation or administrative action in Member States which have as
their object the establishment and functioning of the internal market."
23) The following Article shall be inserted:
"ARTICLE l00c
- The Council, acting unanimously on a proposal from the
Commission and after consulting the European Parliament, shall
determine the third countries whose nationals must be in possession
of a visa when crossing the external borders of the Member States.
- However, in the event of an emergency situation in a third country
posing a threat of a sudden inflow of nationals from that country into
the Community, the Council, acting by a qualified majority on a
recommendation from the Commission, may introduce, for a period not
exceeding six months, a visa requirement for nationals from the
country in question. The visa requirement established under this
paragraph may be extended in accordance with the procedure referred
to in paragraph 1.
- From 1 January 1996, the Council shall adopt the decisions referred
to in paragraph 1 by a qualified majority. The Council shall, before that
date, acting by a qualified majority on a proposal from the
Commission and after consulting the European Parliament, adopt
measures relating to a uniform format for visas.
- In the areas referred to in this Article, the Commission shall
examine any request made by a Member State that it submit a
proposal to the Council.
- This Article shall be without prejudice to the exercise of the
responsibilities incumbent upon the Member States with regard to the
maintenance of law and order and the safeguarding of internal
security.
- This Article shall apply to other areas if so decided pursuant to
Article K.9 of the provisions of the Treaty on European Union which
relate to co-operation in the fields of justice and home affairs, subject
to the voting conditions determined at the same time.
- The provisions of the conventions in force between the Member
States governing areas covered by this Article shall remain in force
until their content has been replaced by directives or measures
adopted pursuant to this Article."
24) The following Article shall be inserted:
"ARTICLE l00d
The Co-ordinating Committee consisting of senior officials set up by
Article K.4 of the Treaty on European Union shall contribute, without
prejudice to the provisions of Article 151, to the preparation of the
proceedings of the Council in the fields referred to in Article l00c."
25) Title II, Chapters 1, 2 and 3 in Part Three shall be replaced by the
following:
"TITLE VI
ECONOMIC AND MONETARY POLICY
CHAPTER 1
ECONOMIC POLICY
ARTICLE 102a
Member States shall conduct their economic policies with a view to
contributing to the achievement of the objectives of the Community, as
defined in Article 2, and in the context of the broad guidelines referred
to in Article 103(2). The Member States and the Community 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 principle set out in Article 3a.
ARTICLE 103
- Member States shall regard their economic policies as a matter of
common concern and shall co-ordinate them within the Council, in
accordance with the provisions of Article 102a.
- The Council shall, acting by a qualified majority on a
recommendation from the Commission, formulate a draft for the broad
guidelines of the economic policies of the Member States and of the
Community, and shall report its findings to the European Council.
The European Council shall, acting on the basis of the report from the
Council, discuss a conclusion on the broad guidelines of the economic
policies of the Member States and of the Community.
On the basis of this conclusion, the Council shall, acting by a qualified
majority, adopt a recommendation setting out these broad guidelines.
The Council shall inform the European Parliament of its
recommendation.
- In order to ensure closer co-ordination of economic policies and
sustained convergence of the economic performances of the Member
States, the Council shall, on the basis of reports submitted by the
Commission, monitor economic development in each of the Member
States and in the Community as well as the consistency of economic
policies with the broad guidelines referred to in paragraph 2, and
regularly carry out an overall assessment.
For the purpose of this multilateral surveillance, Member States shall
forward information to the Commission about important measures
taken by them in the field of their economic policy and other
information as they deem necessary.
- Where it is established, under the procedure referred 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
jeopardizing the proper functioning of economic and monetary union,
the Council may, acting by a qualified majority on a recommendation
from the Commission, make the necessary recommendations to the
Member State concerned. The Council may, acting by a qualified
majority on a proposal from the Commission, decide to make its
recommendations public.
The President of the Council and the Commission shall report to the
European Parliament on the result of multilateral surveillance. The
President of the Council may be invited to appear before the
competent Committee of the European Parliament if the Council has
made its recommendations public.
- The Council, acting in accordance with the procedure referred to in
Article 189c, may adopt detailed rules for the multilateral surveillance
procedure referred to in paragraphs 3 and 4 of this Article.
ARTICLE 103a
- Without prejudice to any other procedures provided for in this
Treaty, the Council may, acting unanimously on a proposal from the
Commission, decide upon the measures appropriate to the economic
situation, in particular if severe difficulties arise in the supply of
certain products.
- Where a Member State is in difficulties or is seriously threatened
with severe difficulties caused by exceptional occurrences beyond its
control, the Council may, acting unanimously on a proposal from the
Commission, grant, under certain conditions, Community financial
assistance to the Member State concerned. Where the severe
difficulties are caused by natural disasters, the Council shall act by
qualified majority. The President of the Council shall inform the
European Parliament of the decision taken.
ARTICLE 104
- Overdraft facilities or any other type of credit facility with the ECB or
with the central banks of the Member States (hereinafter referred to as
"national central banks") in favour of Community institutions or bodies,
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 ECB or national central banks of debt instruments.
- 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 ECB as
private credit institutions.
ARTICLE 104a
- Any measure, not based on prudential considerations, establishing
privileged access by Community institutions or bodies, 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.
- The Council, acting in accordance with the procedure referred to in
Article 189c, shall, before 1 January 1994, specify definitions for the
application of the prohibition referred to in paragraph 1.
ARTICLE 104b
- The Community 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 commitment 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.
- If necessary, the Council, acting in accordance with the procedure
referred to in Article 189c, may specify definitions for the application of
the prohibitions referred to in Article 104 and in this Article.
ARTICLE 104c
- Member States shall avoid excessive governmental deficits.
- The Commission shall monitor the development of the budgetary
situation and of the stock of government debt in the Member States
with a view to identifying 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
- either the ratio has declined substantially and continuously and
reached a level that comes close to the reference value;
- 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 sufficiently diminishing
and approaching the reference value at a satisfactory pace.
The reference values are specified in the Protocol on the excessive
deficit procedure annexed to this Treaty.
- 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
fulfillment of the requirement under the criteria, it is of the opinion that
there is a risk of an excessive deficit in a Member State.
- The Committee provided for in Article 109c shall formulate an
opinion on the report of the Commission.
- If the Commission considers that an excessive deficit in a Member
State exists or may occur, the Commission shall address an opinion
to the Council.
- The Council shall, acting by a qualified majority on a
recommendation from the Commission, and having considered any
observations which the Member State concerned may wish to make,
decide after an overall assessment whether an excessive deficit
exists.
- Where the existence of an excessive deficit is decided according to
paragraph 6, the Council shall make recommendations to the Member
State concerned with a view to bringing that situation to an end within
a given period. Subject to the provisions of paragraph 8, these
recommendations shall not be made public.
- Where it establishes that there has been no effective action in
response to its recommendations within the period laid down, the
Council may make its recommendations public.
- If a Member State persists in failing to put into practice the
recommendations of the Council, the Council may decide to give notice
to the Member State to take, within a specified time limit, measures for
the deficit reduction which is judged necessary by the Council in order
to remedy the situation.
In such a case, the Council 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.
- The right to bring actions provided for in Articles 169 and 170 may
not be exercised within the framework of paragraphs 1 to 9 of this
Article.
- As long as a Member State fails to comply with a decision taken in
accordance with paragraph 9, the Council may decide to apply the
following measures:
- to require the Member State concerned to publish additional
information, to be specified by the Council, before issuing bonds and
securities;
- to invite the European Investment Bank to reconsider its lending
policy towards the Member State concerned;
- to require the Member State concerned to make a non-interestbearing
deposit of an appropriate size with the Community until the
excessive deficit has, in the view of the Council, been corrected;
- to impose fines of an appropriate size.
The President of the Council shall inform the European Parliament of
the decisions taken.
- The Council shall abrogate some or all of its decisions referred to
in paragraphs 6 to 9 and 11 to the extent that the excessive deficit in
the Member State concerned has, in the view
of the Council, been corrected. If the Council has previously made
public recommendations, it shall, as soon as the decision under
paragraph 8 has been abrogated, make a public statement that an
excessive deficit in the Member State concerned no longer exists.
- When taking the decisions referred to in paragraphs 7 to 9, 11 and
12, the Council shall act on a recommendation from the Commission
by a majority of two thirds of the votes of its members weighted in
accordance with Article 148(2), excluding the votes of the
representative of the Member State concerned.
- 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 this Treaty.
The Council shall, acting unanimously on a proposal from the
Commission and after consulting the European Parliament and the
ECB, adopt the appropriate provisions which shall then replace the
said Protocol.
Subject to the other provisions of this paragraph the Council shall,
before 1 January 1994, acting by a qualified majority 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.
CHAPTER 2
MONETARY POLICY
ARTICLE 105
- The primary objective of the ESCB shall be to maintain price
stability. Without prejudice to the objective of price stabilty, the ESCB
shall support the general economic policies in the Community with a
view to contributing to the achievement of the objectives of the
Community as laid down in Article 2. The ESCB 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 3a.
- The basic tasks to be carried out through the ESCB shall be:
- to define and implement the monetary policy of the Community;
- to conduct foreign exchange operations consistent with the
provisions of Article 109;
- to hold and manage the official foreign reserves of the Member
States;
- to promote the smooth operation of payment systems.
- The third indent of paragraph 2 shall be without prejudice to the
holding and management by the government of Member States of
foreign exchange working balances.
- The ECB shall be consulted:
- on any proposed Community act in its fields of competence;
- 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 in accordances with the procedure laid down in
Article 106(6).
The ECB may submit opinions to the appropriate Community
institutions or bodies or to national authorities on matters in its fields
of competence.
- The ESCB 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.
- The Council may, acting unanimously on a proposal from the
Commission and after consulting the ECB and after receiving the
assent of the European Parliament, confer upon the ECB specific tasks
concerning policies relating to the prudential supervision of credit
institutions and other financial institutions with the exception of
insurance undertakings.
ARTICLE 105a
- The ECB shall have the exclusive right to authorize the issue of
bank note within the Community. The ECB and the national central
banks may issue such notes. The bank notes issued by the ECB and
the national central banks shall be the only such notes to have the
status of legal tender within the Community.
- The Member States may issue coins subject to approval by the ECB
of the volume of the issue. The Council may, acting in accordance with
the procedure referred to in Article 189c and after consulting the ECB,
adopt measures to harmonize the denominations and technical
specifications of all coins intended for circulation to the extent
necessary to permit their smooth circulation within the Community.
ARTICLE 106
- The ESCB shall be composed of the ECB and of the national central
banks.
- The ECB shall have legal personality.
- The ESCB shall be governed by the decision-making bodies of the
ECB which shall be the Governing Council and the Executive Board.
- The Statute of the ESCB is laid down in a Protocol annexed to this
Treaty.
- Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3. 32.4,
32.6, 33.l(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.
- 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.
ARTICLE 107
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 decisionmaking
bodies of the ECB or of the national central banks in the
performance of their tasks.
ARTICLE 108
Each Member State shall ensure, at the latest at the date of the
establishment of the ESCB, that its national legislation including the
statutes of its national central bank is compatible with this Treaty and
the Statute of the ESCB.
ARTICLE 108a
- 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 106(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.
- 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 190 to 192 shall apply to regulations and decisions adopted
by the ECB.
The ECB may decide to publish its decisions, recommendations and
opinions.
- Within the limits and under the conditions adopted by the Council
under the procedure laid down in Article 106(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.
ARTICLE 109
- By way of derogation from Article 228, the Council may, acting
unanimously on a recommendation from the ECB or from the
Commission, and after consulting the ECB in an endeavour to reach a
consensus consistent with the objective of price stability, after
consulting the European Parliament, in accordance with the procedure
in paragraph 3 for determining the arrangements, conclude formal
agreements on an exchange rate system for the ECU in relation to
non-Community currencies. The Council may, acting by a qualified
majority on a recommendation from the ECB or from the Commission,
and after consulting the ECB in an endeavour to reach a consensus
consistent with the objective of price stability, adopt, adjust or
abandon the central rates of the ECU within the exchange rate system.
The President of the Council shall inform the European Parliament of
the adoption, adjustment or abandonment of the ECU central rates.
- In the absence of an exchange rate system in relation to one or
more non-Community currencies as referred to in paragraph 1, the
Council, acting by a qualified majority either on a recommendation
from the Commission and after consulting the ECB or on a
recommendation from the ECB, may formulate general orientations for
exchange-rate policy in relation to these currencies. These general
orientations shall be without prejudice to the primary objective of the
ESCB to maintain price stability.
- By way of derogation from Article 228, where agreements
concerning monetary or foreign exchange regime matters need to be
negotiated by the Community with one or more States or international
organizations, the Council, acting by a qualified majority on a
recommendation from the Commission and after consulting the ECB,
shall decide the arrangements for the negotiation and for the
conclusion of such agreements. These arrangements shall ensure that
the Community expresses a single position. The Commission shall be
fully associated with the negotiations.
Agreements concluded in accordance with this paragraph shall be
binding on the institutions of the Community, on the ECB and on
Member States.
- Subject to paragraph 1, the Council shall, on a proposal from the
Commission and after consulting the ECB, acting by a qualified
majority decide on the position of the Community at international level
as regards issues of particular relevance to economic and monetary
union and, acting unanimously, decide its representation in
compliance with the allocation of powers laid down in Articles 103 and
105.
- Without prejudice to Community competence and Community
agreements as regards economic and monetary union, Member States
may negotiate in international bodies and conclude international
agreements.
CHAPTER 3
INSTITUTIONAL PROVISION
ARTICLE 109a
- The Governing Council of the ECB shall comprise the members of
the Executive Board of the ECB and the Governors of the national
central banks.
2 (a) The Executive Board shall comprise the President, the VicePresident
and four other members.
(b) The President, the Vice-President and the other members of the
Executive Board shall be appointed from among the persons of
recognized 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 of Government, on a
recommendation from the Council, after it has consulted the European
Parliament and the Governing Council of the ECB.
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 109b
- The President of the Council and a member of the Commission may
participate, without having the right to vote, in meetings of the
Governing Council of the ECB.
The President of the Council may submit a motion for deliberation to
the Governing Council of the ECB.
- The President of the ECB shall be invited to participate in Council
meetings when the Council is discussing matters relating to the
objectives and tasks of the ESCB.
- The ECB shall address an annual report on the activities of the
ESCB and on the monetary policy of both the previous and current
year to the European Parliament, the Council and the Commission, and
also to the European Council. The President of the ECB shall present
this report to the Council and to the European Parliament, which may
hold a general debate on that basis.
The President of the ECB 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 109c
- In order to promote co-ordination of the policies of Member States to
the full extent needed for the functioning of the internal market, a
Monetary Committee with advisory status is hereby set up.
It shall have the following tasks:
- to keep under review the monetary and financial situation of the
Member States and of the Community and the general payments
system of the Member States and to report regularly thereon to the
Council and to the Commission;
- to deliver opinions at the request of the Council or of the
Commission, or on its own initiative for submission to those
institutions;
- without prejudice to Article 151, to contribute to the preparation of the
work of the Council referred to in Articles 73f, 73g, 103(2), (3), (4) and
(5), 103a, 104a, 104b, 104c, 109e(2), 109f(6), 109h, 109i, 109j(2) and
109k(1);
- 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 this Treaty and of measures adopted by the Council;
the examination shall cover all measures relating to capital
movements and payments; the Committee shall report to the
Commission and to the Council on the outcome of this examination.
The Member States and the Commission shall each appoint two
members of the Monetary Committee.
- At the start of the third stage, and Economic and Financial
Committee shall be set up. The Monetary Committee provided for in
paragraph 1 shall be dissolved.
The Economic and Financial Committee shall have the following tasks:
- to deliver opinions at the request of the Council or of the
Commission, or on its own initiative for submission to those
institutions;
- to keep under review the economic and financial situation of the
Member States and of the Community and to report regularly thereon
to the Council and to the Commission, in particular on financial
relations with third countries and international institutions;
- without prejudice to Article 151, to contribute to the preparation of the
work of the Council referred to in Article 73f, 73g, 103(2), (3),(4) and (5),
103a, 104a, 104b, 104c, 105(6), 105a(2), 106(5) and (6), 109, 109h,
109i(2) and (3), 109k(2), 109l(4) and (5), and to carry out other advisory
and preparatory tasks assigned to it by the Council;
- 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 this Treaty and of measures adopted by the Council;
the examination shall cover all measures relating to capital
movements and payments; the Commission shall report to the
Commission and to the Council on the outcome of this examination.
The Member States, the Commission and the ECB shall each appoint
no more than two members of the Committee.
- The Council shall, acting by qualified majority on a proposal from
the Commission and after consulting the ECB and the Committee
referred to in this Article, lay down detailed provisions concerning the
composition of the Economic and Financial Committee. The President
of the Council shall inform the European Parliament of such a
decision.
- In addition to the tasks set in paragraph 2, if and as long as there
are Member States with a derogation as referred to in Articles 109k
and 109l, the Committee shall keep under review the monetary and
financial situation and the general payments system of those Member
States and report regularly thereon to the Council and to the
Commission.
ARTICLE 109d
For matters within the scope of Articles 103(4), 104c with the exception
of paragraph 14, 109, 109j, 109k and 109l(4) and (5), the Council 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 without
delay.
CHAPTER 4
TRANSITIONAL PROVISIONS
ARTICLE 109e
- The second stage for achieving economic and monetary union shall
begin on 1 January 1994.
- Before that date
(a) each Member State shall:
- adopt, where necessary, appropriate measures to comply with the
prohibitions laid down in article 73b, without prejudice to Article 73e,
and in Articles 104 and 104a(1);
- adopt, if necessary, with a view to permitting the assessment
provided for in subparagraph (b), multiannual programmes intended to
ensure the lasting convergence necessary for the achievement of
economic and monetary union, in particular with regard to price
stability and sound public finances;
(b) the Council shall, on the basis of a report from the Commission,
assess the progress made with regard to economic and monetary
convergence, in particular with regard to price stability and sound
public finances, and the progress made with the implementation of
Community law concerning the internal market.
- The provision of Articles 104, 104a(1), 104b(1), and 104c with the
exception of paragraphs 1,9,11 and 14 shall apply from the beginning
of the second stage.
The provision of Articles 103a(2), 104c(1), (9) and (11), 105, 105a, 107,
109, 109a, 109b and 109c(2) and (4) shall apply from the beginning of
the third stage.
- In the second stage, Member States shall endeavour to avoid
excessive government deficits.
- During the second stage, each Member State shall, as appropriate,
start the process leading to the independence of its central bank, and
in accordance with Article 108.
ARTICLE 109f
- At the start of the second stage, a European Monetary Institute
(hereinafter referred to as "EMI") shall be established and take up its
duties; it shall have legal personality and be directed and managed by
a Council, consisting of a President and the Governors of the national
central banks, one of whom shall be Vice-President.
The President shall be appointed by common accord of the
Governments of the Member States at the level of Heads of State or of
Government, on a recommendation from, as the case may be, the
Committee of Governors of the central banks of the Member States
(hereinafter referred to as "Committee of Governors") or the Council of
the EMI, and after consulting the European Parliament and the Council.
The President shall be selected from among persons of recognized
standing and professional experience in monetary or banking matters.
Only nationals of Member States may be President of the EMI. The
Council of the EMI shall appoint the Vice-President.
The Statute of the EMI is laid down in a Protocol annexed to this
Treaty.
The Committee of Governors shall be dissolved at the start of the
second stage.
- The EMI shall:
- strengthen co-operation between the national central banks;
- strengthen the co-ordination of 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.
- For the preparation of the third stage, the EMI shall:
- prepare the instruments and procedures necessary for carrying out a
single monetary policy in the third stage;
- promote the harmonization, where necessary, of rules and practices
governing the collection, compilation and distribution of statistics in
the areas in the areas within its field of competence;
- prepare the rules for operations to be undertaken by the national
central banks within the framework of the ESCB;
- promote the efficiency of cross-border payments;
- supervise the technical preparation of ECU bank notes.
At the latest by 31 December 1996, the EMI shall specify the
regulatory, organizational and logistical framework necessary for the
ESCB to perform its tasks in the third stage. This framework shall be
submitted for decision to the ECB at the date of its establishment.
- The EMI, acting by a majority of two thirds of the members of its
Council, may:
- formulate opinions or recommendations on the overall orientation of
monetary policy and exchange rate policy as well as on related
measures introduced in each Member State;
- submit opinions or recommendations to Governments and to the
Council on policies which might affect the internal or external
monetary situation in the Community and, in particular, the functioning
of the European Monetary System;
- make recommendations to the monetary authorities of the Member
States concerning the conduct of monetary policy.
- The EMI, acting unanimously, may decided to publish its opinions
and its recommendations.
- The EMI shall be consulted by the Council regarding any proposed
Community act within its field of competence.
Within the limits and under the conditions set out by the Council,
acting by a qualified majority on a proposal from the Commission and
after consulting the European Parliament and the EMI, the EMI shall be
consulted by the authorities of the Member States on any draft
legislative provision within its field of competence.
- The Council may, acting unanimously on a proposal from the
Commission and after consulting the European Parliament and the
EMI, confer upon the EMI other tasks for the preparation of the third
stage.
- Where this Treaty provides for a consultative role for the ECB,
reference to the ECB shall be read as referring to the EMI before the
establishment of the ECB. Where this Treaty provides for a
consultative role for the EMI, references to the EMI shall be read,
before 1 January 1994, as referring to the Committee of Governors.
- During the second stage, the term "ECB" used in Articles 173, 175,
176, 177, 180 and 215 shall be read as referring to the EMI.
ARTICLE 109g
The currency composition of the ECU basket shall not be changed.
From the start of the third stage, the value of the ECU shall be
irrevocably fixed in accordance with Article 109l(4).
ARTICLE 109h
- Where a Member State is in difficulties or is seriously threatened
with difficulties as regards its balance of payments either as a result
of a 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 jeopardize the functioning of the common market
or the progressive 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 means at its
disposal, that State has taken or may take in accordance with the
provisions of this Treaty. The Commission shall state what measures
it recommends the State concerned to take.
If the action taken by a Member States 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 Committee referred to in Article 109c, recommend to the
Council the granting of mutual assistance and appropriate methods
therefor.
The Commission shall keep the Council regularly informed of the
situation of how it is developing.
- The Council, acting by a qualified majority, shall grant such mutual
assistance; it shall adopt directives 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
organizations to which Member States may have recourse;
(b) measures needed to avoid deflection of trade where the State 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.
- If the mutual assistance recommended by the Commission is not
granted by the Council or if the mutual assistance granted and the
measures taken are insufficient, the Commission shall authorize the
State which is in difficulties to take protective measures, the
conditions and details of which the Commission shall determine.
Such authorization may be revoked and such conditions and details
may be changed by the Council acting by a qualified majority.
- Subject to Article 109k(6), this Article shall cease to apply from the
beginning of the third stage.
ARTICLE 109i
- Where a sudden crisis in the balance of payments occurs and a
decision within the meaning of Article 109h(2) is not immediately
taken, the Member State concerned may, as a precaution, take the
necessary protective measures. Such measures must cause the least
possible disturbance in the functioning of the common market and
must not be wider in scope than is strictly necessary to remedy the
sudden difficulties which have arisen.
- The Commission and the other Member State shall be informed of
such protective measures not later than when they enter into force.
The Commission may recommend to the Council the granting of mutual
assistance under Article 109h.
- After the Commission has delivered an opinion and the Committee
referred to in Article 109c has been consulted, the Council may, acting
by a qualified majority, decide that the State concerned shall amend,
suspend or abolish the protective measures referred to above.
- Subject to Article 109k(6), this Article shall cease to apply from the
beginning of the third stage.
ARTICLE 109j
- The Commission and the EMI shall report to the Council on the
progress made in the fulfilment by the Member States of their
obligations regarding the achievement of economic and monetary
union. These reports shall include an examination of the compatibility
between each Member State's national le