Explanatory Memorandum to COM(2022)282 - Adoption by Croatia of the euro on 1 January 2023 - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2022)282 - Adoption by Croatia of the euro on 1 January 2023. |
|---|---|
| source | COM(2022)282  |
| date | 01-06-2022 |
1. CONTEXT OF THE PROPOSAL
On 3 May 1998, the Council decided that Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Austria and Finland fulfilled the necessary conditions for the adoption of the euro on 1 January 1999. Denmark and the United Kingdom made use of their opt-out clauses and were therefore not assessed by the Council. Greece and Sweden were considered by the Council as Member States with a derogation.
On 19 June 2000, the Council decided that Greece fulfilled the necessary conditions to adopt the euro on 1 January 2001. The countries that joined the European Union on 1 May 2004 (the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia) became Member States with a derogation in accordance with Article 4 of the respective Act of Accession.
On 11 July 2006, the Council decided that Slovenia fulfilled the necessary conditions to adopt the euro on 1 January 2007.
Bulgaria and Romania, who joined the European Union on 1 January 2007, became Member States with a derogation in accordance with Article 5 of the respective Act of Accession.
On 10 July 2007, the Council decided that Cyprus and Malta fulfilled the necessary conditions to adopt the euro on 1 January 2008.
On 8 July 2008, the Council decided that Slovakia fulfilled the necessary conditions for adopting the euro as of 1 January 2009.
On 13 July 2010, the Council decided that Estonia fulfilled the necessary conditions for adopting the euro as of 1 January 2011.
Croatia joined the European Union on 1 July 2013 and became a Member State with a derogation in accordance with Article 5 of the Act of Accession.
On 9 July 2013, the Council decided that Latvia fulfilled the necessary conditions for adopting the euro as of 1 January 2014.
On 23 July 2014, the Council decided that Lithuania fulfilled the necessary conditions for adopting the euro as of 1 January 2015.
Article 140(1) of the Treaty on the Functioning of the European Union ('the Treaty') states that at least once every two years or at the request of a Member State with a derogation, the Commission and the European Central Bank have to report to the Council on the progress made by Member States with a derogation in fulfilling their obligations regarding the achievement of economic and monetary union.
Based on its own report and that of the ECB, the Commission should submit to the Council a proposal for a Council decision, in accordance to the procedure laid down in Article 140 i of the Treaty, to abrogate the derogation of the Member States fulfilling the necessary conditions.
Both the Commission and the ECB convergence reports were released on 1 June 2022. The reports include an examination of the compatibility between Croatia's national legislation, including the statutes of its national central bank, with Articles 130 and 131 of the Treaty and the Statute of the ESCB and of the ECB.
The reports also examine whether a high degree of sustainable convergence has been achieved, by reference to the fulfilment of the convergence criteria, and take account of several other factors required under the final sub-paragraph of Article 140(1) of the Treaty.
In its convergence report, the Commission concludes that Croatia fulfils the conditions for the adoption of the euro.
On the basis of its report and that of the ECB, the Commission has adopted the attached proposal for a Council decision to abrogate the derogation of Croatia, with effect from 1 January 2023.
2. RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENT
Discussions with Member States on economic policy challenges in Member States are held under various headings on a regular basis in the Economic and Financial Committee (EFC) and the ECOFIN/Eurogroup. These include informal discussions on issues specifically relevant to the preparation of eventual euro-area entry (including exchange rate policies). Dialogue with academics and other interested groups takes place in conferences/seminars and on an ad-hoc basis.
Economic developments in the euro area and the Member States are assessed through the various procedures of economic policy coordination and surveillance (notably under Art. 121 of the Treaty), as well as in the context of the Commission’s regular monitoring and analysis of country-specific and area-wide developments (including forecasts, regular publication series, and input to the EFC and ECOFIN/Eurogroup). In accordance with the proportionality principle and in line with past practice, no formal impact assessment has been carried out.
3. LEGAL ELEMENTS OF THE PROPOSAL
3.1.Legal basis
The legal basis for this proposal is Article 140 i of the Treaty, which lays down the procedure for a Council decision on euro adoption and for abrogating the derogation in the concerned Member States.
The Council shall act on a proposal from the Commission, after consulting the European Parliament, after discussion in the European Council and after having received a recommendation of a qualified majority of those among its members representing Member States whose currency is the euro.
3.2.Subsidiarity and proportionality
The proposal falls under the exclusive competence of the Union. The subsidiarity principle therefore does not apply.
This initiative does not go beyond what is necessary to achieve its objective and, therefore, complies with the proportionality principle.
3.3.Choice of legal instrument
A Decision is the only appropriate legal instrument according to Article 140 i of the Treaty.
4. BUDGETARY IMPLICATION
The proposal has no implications for the budget of the Union.