| Author (Person) | Thomson, Ian |
|---|---|
| Publisher | ProQuest Information and Learning |
| Series Title | In Focus |
| Series Details | 7.5.00 |
| Publication Date | 07/05/2000 |
| Content Type | News, Overview, Topic Guide | In Focus |
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On the 3 May 2000 the European Commission adopted its Convergence Report 2000. The main conclusion in the report is that Greece fulfils the necessary conditions to adopt the single currency as from the 1 January 2001. On the same day, the European Central Bank also issued its separate Convergence Report 2000. On the 4 and 5 May 2000 the European Commission hosted the first Brussels Economic Forum, an initiative intended to develop a high level public debate with academics, private sector economists, social partners, the media and the wider public on the coordination and surveillance of economic policy in the EU. European Commission: Convergence Report 2000 The first European Commission Convergence Report [some pdf files] was issued on 25 March 1998. In it the European Commission recommended that eleven countries met the necessary conditions to adopt the single currency, the euro, on 1 January 1999: Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland. To qualify for the final stage of EMU, Member States had to attain a high degree of sustainable economic Convergence. In line with Article 121(1) (ex Article 109j) of the Treaty establishing the European Community [pdf] progress was measured against Convergence criteria covering inflation, government deficit and debt, exchange rate stability and long-term interest rates. Countries had also to meet certain other conditions, in particular central bank independence. In two countries - Greece and Sweden - the Commission did not consider that the necessary conditions for EMU were met. Denmark and the United Kingdom exercised their right under the Treaty not to participate in EMU with other Member States from 1 January 1999. Further details on the position of the four 'outs' in 1998 is available. Two years on, the European Commission has adopted a further Convergence Report [pdf], which examines the position of the convergence process in two of the 'out' countries, Greece and Sweden. A summary is also available (Press Release, IP/00/422) The convergence process in Denmark and the United Kingdom has not been assessed as according to their opt-out arrangements these countries have not notified their intention to adopt the euro. Denmark The current official thinking in Denmark can be seen in a speech by Mogens Lykketoft, Minister for Finance in November 1999. At the end of April 2000, Denmark's governing Social Democrats voted overwhelmingly to adopt the European single currency. A referendum will be held on the 28 September 2000. The outcome is said to be uncertain. Further information on the economic situation in Denmark, the Danish Convergence Report and the Danish Outline National Changeover Plan is available from the Ministry of Economic Affairs. United Kingdom Information on the current official position in the United Kingdom can be obtained from HM Treasury, and, in particular, from the Second Outline National Changeover Plan [pdf], issued in March 2000. Other relevant documentation can be found on related pages. The issue is very sensitive in the UK with business divided, and public opinion opposed. The divided views of business can be seen in the websites of the pro-UK participation in the euro group Britain in Europe and the anti-UK participation group Business for Sterling. Greece In the 1998 Convergence Report the Commission assessment was that Greece did not fulfil any of the four convergence criteria. Since then the Greek government under Costas Simitis has made joining the single currency one of its key policy priorities. On 9 March 2000 the Greek government submitted a formal application to join the euro zone and to adopt the single European currency as of 1 January 2001, in accordance with Article 122 (paragraph 2) of the EU Treaty. Full details of the position of Greece in connection with the euro are given in an earlier The Convergence Report 2000 from the European Commission says that Greece has achieved striking progress towards convergence and concludes that the country has achieved a high degreee of sustainable economic convergence. As a result the Commission proposes that Greece adopts the single currency from 1 January 2001 (COM (2000)274 final (3.5.00)[pdf]. Sweden In the 1998 Convergence Report the European Commission assessment was that Sweden already fulfilled three of the convergence criteria, but that it did not fulfil the exchange rate criterion. Furthermore, legislation in Sweden was considered not compatible with the Treaty and the ESCB Statute. In the Convergence Report 2000 the Commission concludes that there should be no change in the status of Sweden as a Member State with a derogation. As in Denmark and the UK opinion is divided in Sweden as to whether the country should join the euro. In January 2000 the Swedish Social Democratic party's Executive Committee decided to recommend EMU membership for Sweden to the party's Congress. Further information on Sweden and the euro is available from the Ministry of Finance , and more general information on Sweden and the EU from the Ministry of Foreign Affairs. European Central Bank: Convergence Report 2000 The Vice-President of the European Central Bank, Christian Noyer, launched the ECB's Convergence Report 2000 to the Committee on Economic and Monetary Affairs of the European Parliament in Brussels on 3 May 2000. The introductory statement given by Christian Noyer is also available. This report also examines, from the ECB's perspective, with regard to Greece and Sweden, the achievement of a high degree of sustainable convergence, as well as compliance with the statutory requirements to be fulfilled by national central banks. Broadly, the ECB came to the same conclusions as the European Commission. However, in the case of Greece, the ECB said that continued efforts to support sustained price stability are of particular importance:
The Convergence Report 1998 of the European Monetary Institute (the ECB's predecessor) is also available.[pdf] It is now up to the Council of the European Union to decide, on the basis of the analysis and recommendations contained in the two Convergence Reports, and of an opinion from the European Parliament, whether or not the current derogation status of Greece and Sweden can be abrogated. The final decision is expected to be taken by the Ecofin Council later in the year. Brussels Economic Forum, 4-5 May 2000 The co-ordination and surveillance of economic policy have assumed much greater importance with the introduction of the euro. Economic and Monetary Union provides the framework for stability. Its success however, in terms of growth and employment, also depends upon the quality of economic policy making. Co-ordination takes place within the Euro-11 Group and the Ecofin Council. The European Commission Directorate for Economic and Financial Affairs with its regular macroeconomic forecasts, its annual European Economy Review and its recommendation on the Broad Economic Policy Guidelines, plays a central role and provides significant contributions to the economic co-ordination process. Dialogue between the main economic policy actors (responsible for monetary, budgetary and wage policies) is facilitated by the 'Macroeconomic Dialogue' under the European Employment Pact. However, economic policy in EMU, and in the Community as a whole, is also a matter of broader public interest. As such, it needs to draw on the latest developments in economic research and broad and open discussion amongst professional economists is essential. Since economic policy concerns all citizens, it is important that all actors are involved in the debate. The purpose of the Forum is to give further impetus to to public scrutiny by making sure that the debate draws upon:
Further information can be seen in these external links: Country information: Denmark (International Monetary Fund, 2000) EMU: One year on (OECD, 2000) [pdf] One hundred basic indicators (Eurostat, 2000-) Ian Thomson On the 3 May 2000 the European Commission adopted its Convergence Report 2000. The main conclusion in the report is that Greece fulfils the necessary conditions to adopt the single currency as from the 1 January 2001. On the same day, the European Central Bank also issued its separate Convergence Report 2000. |
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| Subject Categories | Economic and Financial Affairs |
