The Making Of The Statute Of The European System Of Central Banks ~ Annex 1: Selection Of Articles (And Division Over Cluster I, II And III)

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The Making Of The Statute Of The European System Of Central Banks ~ Annex 2: General Overview Of Sources Relevant For The Genesis Of The Articles

The sources used for this study can be divided over three periods: the period of the Delors Committee, the drafting of the ESCB Statute and the IGC.

Delors Committee period
The main document is the Delors Report, including a collection of papers submitted to the Committee, partly at the initiative of the members of the committee, partly at the request of the chairman (annexed to the Report). Also important are the draft versions of the Delors Report (made available for research purposes due to the courtesy of dr Szász). In addition, internal reports[i] have shed light on the discussions in the Committee. The Delors Committee met eight times [ii] and produced 5 (sometimes only partial) draft versions of its report. Other important documents are: the Genscher memorandum, the Stoltenberg memorandum, the press conference of the Bundesbankpresident on May 1988, the conclusions of the European Council summits of June 1988 and June and December 1989. These documents have been published either in HWWA (1993)[iii] or in the Presseauszüge of the Bundesbank.

Other reference documents are: the Werner Report and a number of autobiographies Lawson (1992), Thatcher (1993), Kohl (1996) and the voluminous study by Dyson and Featherstone (1999).

Period of drafting the ESCB Statute
The Committee of Governors met four times at the level of governors [iv] and more than ten times on the level of the Alternates[v] and they discussed numerous internal draft versions of the ESCB Statute. The basic document is the draft Statute of 27 November 1990 (published in HWWA (1993)), which was sent to the IGC. The draft contained a limited number of bracketed elements, indicating where the governors had not been able to agree among themselves. On 26 April 1991 a new version was sent to the IGC, now including the chapter on financial provisions (chapter VI), a chapter on general provisions (chapter VII) and proposals for a simplified amendment procedure and complementary Community legislation (chapter VIII) (CONF-EMU 1613/91, 29 April 1991). On 28 October a draft version of chapter IX (Transitional Provisions)[vi] was transmitted to the IGC, together with a draft version of the EMI Statute. All draft versions of the draft ESCB Statute are available through the courtesy of dr Szász. There are no official records of the meetings of the Alternates. The author based himself on internal reports by the participants of the Nederlandsche Bank. The discussion among the governors has been recorded in minutes. Many of the arguments used in the discussions between the central bankers were also reflected in official speeches, a number of which are published at the end of this book (speeches by Bundesbankpresident Pöhl and the French governor de Larosière) – see Annex 3.

Period of IGC
The IGC met 14 times at the ministerial level[vii], 23 times at the deputies level [viii]and 6 times at the level of the EMU Working Group[ix]. This Working Group, chaired by Dutch civil servant Bernard ter Haar, redrafted the Treaty texts on the basis of the outcome of the discussions at the Deputies level and sometimes solved problems for them. The author attended most of the IGC meetings at the Deputies level, chaired by Yves Mersch and Cees Maas in the first and second half of 1991 respectively, and most meetings of the EMU working group. There were also six informal Ecofin meetings (joint meetings of ministers of finance and governors).[x] The delegations and presidency of the IGC produced 120 UEM-documents over the course of one year. All these documents were numbered, with numbers starting with UEM/../year, for instance UEM/34/91. Many of these documents were made public by Agence Europe.[xi]

Important IGC documents are: the draft Treaty text of the Commission, France and Germany (published in HWWA (1993)[xii]. Other important conference documents are the Luxembourg presidency’s non-paper of 10 May and its reference document of 18 June (CONF-UP-UEM 2008/91) and the Dutch presidency’s draft Treaty text (UEM/82/91) of 28 October (all printed in HWWA (1993). The Dutch presidency presented new consolidated versions on 22 November (UEM/112/91), on 28 November (UEM/118/91) and 5 December (CONF-UEM 1620/91). The draft Treaty version of 5 December is available in the Metten-archives.[xiii] Many other conference documents have been published by Agence Europe. There are no official minutes of IGC meetings. Most of the drafting took place at the level of the deputies (or the EMU working group). The exchange of views between the delegations was witnessed by the author as a member of the Dutch delegation and made it possible to understand the evolution of the wording of the draft articles.

Other useful documents of the same period:
– Commission documents: ‘Economic and Monetary Union’, 21 August 1990 (published in HWWA (1993)); ‘Central bank legislation in 16 countries’,
– Commission document II/77/90, January 1990, circulated to the Monetary Committee (available in the Metten-archives), circulated to the Monetary Committee as II/77/90-EN.
– Monetary Committee document: ‘Economic and Monetary Union beyond Stage 1: Orientations for the Preparation of the Intergovernmental Conference’ (version of 26 March 1990, published by Europe (Europe Documents, no. 1609, 3 April 1990) and final version of 23 July 1990 published in HWWA (1993).
Germany: Stellungnahme der Deutschen Bundesbank zur Errichtung einer Wirtschafts- und Währungsunion in Europa, 19 September 1990 (published in HWWA (1993)).

All these documents and the records of the meetings have been studied to trace the genesis of those articles considered most important for the constitution of the ESCB.

[i] There are no official minutes of the meetings of the Delors Committee. The internal reports are based on debriefings to staff.
[ii] On 13 September, 10 October, 8 November, 13 December 1988 and on 10 January, 14 February, 14 March and 11 and 12 April 1989.
[iii] HWWA (1993) stands for a study by Krägenau and Wetter, who brought together a large volume of documents relating to European monetary integration, which was published in 1993 by the HWWA-Institut für Wirtschaftsforschung – Hamburg.
[iv] On 10 July, 11 September, 13 November 1990 and 9 April 1991. In the second half of 1991 the governors met to discuss the draft EMI Statute and the chapter on transitional provisions.
[v] Alternates: 29 May, 18 June, 29 June, 9 July, 20 July, 3 September, 9 September, 15-16 October 1990 and 10 February, 10 March and 7 April 1991. Apart from this, several specialized committees or ad hoc working groups met over the period summer 1990 – spring 1991 to discuss legal, monetary and supervisory aspects. (Not mentioned are the meetings of the Alternates spent on drafting the EMI Statute and the chapter on transitional provisions, which took place in the second half of 1991.)
[vi] Later renamed into ‘Transitional and other provisions’.
[vii] Ministers: 15 December 1990 and 28 January, 25 February, 18 March, 8 April, 10 June, 9 September, 7 October, 11-12 November, 20-21 November, 25 November, 1 December, 2-3 December 1991, 9 December 1991.
[viii] Deputies: 15 January, 29 January, 19 February, 26 February, 12 March, 19 March, 2 April, 9 April, 23 April, 10 May, 21 May, 4 June, 2 July, 9 July, 3 September, 10 September, 1 October, 8 October, 22 October, 5 November, 13 November, 26 November, 30 November 1991.
[ix] Working Group: 17 October, 30-31 October, 6 November, 14 November, 18-21 November, 26-28 November 1991.
[x] 20 May 1989 (s’Agaro), 9 September 1989 (Antibes), 31 March 1990 (Ashford Castle), 8 September 1990 (Rome), 11 May 1991 (Luxembourg), 20-21 September 1991 (Apeldoorn).
[xi] International treaties are prepared in a peculiar way. There are no parliamentary discussions, there are no official records, there is no official Commentary. However, during the IGC the French press agency (Europe) published many interim conference documents.
[xii] Most documents in HWWA (1993) are published in German translation.
[xiii] These archives are available for research purposes through the Institute of Social Sciences and History in Amsterdam. The archives contain documentation used by Alman Metten (the Member of the European Parliament) and Bart van Riel (assistant to the Dutch socialist party members of the European Parliament) in writing ‘The Choices of Maastricht’ (Van Riel and Metten, 2000), only available in Dutch.

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The Making Of The Statute Of The European System Of Central Banks ~ Annex 3: Excerpts From Speeches By Pöhl And De Larosière In The Period 1988-1991

Excerpts from speeches by Pöhl and De Larosière from the period 1988-1991 relating to the future ESCB (Source: Deutsche Bundesbank, Auszüge aus Presseartikeln)

1. Excerpt from ‘Die Zukunft der Deutschen Mark in der europäischen Währungsintegration’, Vortrag von Bundesbankpräsident Karl Otto Pöhl auf der Jahrestagung des Vereins für Socialpolitik am 7. Oktober 1988 in Freiburg i. Br. [Bundesbank, Presseauszüge, Nr. 75, 13 October 1988]

Die radikalste, aber auch ‘sauberste’ Lösung für das Problem einer Vergemeinschaftung der Geldpolitik in einer Währungsunion wäre die Schaffung eines europäischen Notenbanksystems, etwa analog zum Federal Reserve System der USA.

Ein europäisches Notenbanksystem müßte unmißverständlich auf das Ziel verpflichtet werden, für Preisstabilität zu sorgen.

Die Aufgabe, für Preisstabilität zu sorgen, wird zumindest erleichtert, wenn nicht überhaupt erst ermöglicht, wenn ein europäisches Notenbanksystem ausreichend unabhängig in seiner Willensbildung und in seiner Entscheidungsfindung ist; unabhängig nicht nur von nationalen Regierungen, sondern auch von den Einrichtungen der Europäischen Gemeinschaft, also von der Kommission und vom Ministerrat.

Stabilisierung der Wechselkurse kann und darf deshalb nicht das primäre Ziel der Geldpolitik sein. Sie kann mit ihrer eigentlichen Aufgabe allzuleicht in Konflikt geraten. Das heißt aber nicht, daß es keinen Spielraum für währungspolitische Kooperation mit Ländern außerhalb der Gemeinschaft gibt, die auch Interventionen an den Devisenmärkten beinhalten kann. Eine europäische Notenbank, die dafür verantwortlich wäre, müßte deshalb zumindest einen Teil
der jetzt noch nationalen Währungsreserven definitiv erwerben und verwalten.

Realistischerweise muß man wohl davon ausgehen, daß Regierungen und Parlamente in Europa in absehbarer Zeit nicht bereit sind, ihre geldpolitische Souveränität auf eine supranationale Institution wie eine europäische Notenbank zu übertragen. Bezeichnenderweise kommt das Wort europäische Zentralbank und europäische Währung in dem Kommuniqué von Hannover auch gar nicht mehr vor. Read more

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The Making Of The Statute Of The European System Of Central Banks ~ Annex 4: Statute Of The ESCB And Of The ECB And Selected Treaty Articles

Protocol on the Statute of the European System of the Central Banks and of the European Central Bank [Protocol annexed to the Treaty establishing the European Community. See also OJ C 191, 29.7.1992, p. 78. Article numbers referring to the EC Treaty are followed by square-bracketed new numbering as introduced by Treaty of Amsterdam (1997)]

The high contracting parties, desiring to lay down the Statute of the European System of Central Banks and of the European Central Bank provided for in Article 4a [8] of the Treaty establishing the European Community, have agreed upon the following provisions, which shall be annexed to the Treaty establishing the European Community.

Chapter I
Constitution of the ESCB

Article 1
The European System of Central Banks

1.1. The European System of Central Banks (ESCB) and the European Central Bank (ECB) shall be established in accordance with Article 4a [8] of this Treaty; they shall perform their tasks and carry on their activities in accordance with the provisions of this Treaty and of
this Statute.
1.2. In accordance with Article 106(1) [107(1)] of this Treaty, the ESCB shall be composed of the ECB and of the central banks of the Member States (“national central banks”). The Institut monétaire luxembourgeois will be the central bank of Luxembourg.

Chapter II
Objectives and Tasks of the ECB

Article 2

In accordance with Article 105(1) of this Treaty, the primary objective of the ESCB shall be to maintain price stability. Without prejudice to the objective of price stability, it 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 of this Treaty. 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 [4] of this Treaty.

Article 3

3.1. In accordance with Article 105(2) of this Treaty, 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 [111] of this Treaty;
— to hold and manage the official foreign reserves of the Member States;
— to promote the smooth operation of payment systems.
3.2. In accordance with Article 105(3) of this Treaty, the third indent of Article 3.1 shall be without prejudice to the holding and management by the governments of Member States of foreign-exchange working balances.
3.3. In accordance with Article 105(5) of this Treaty, 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.

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The Making Of The Statute Of The European System Of Central Banks ~ Annex 5: Table Of Equivalences Referred To In Article 12 Of The Treaty Of Amsterdam (1997)

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Table 1

Table 2

Table 3

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The Making Of The Statute Of The European System Of Central Banks ~ Bibliography

Aarsman, Olga (2001), ‘The development of the FRS (1913-2000) and lessons for the ESCB’, thesis Vrije Universiteit, Amsterdam, April/May 2001 (only available in Dutch).
Agence Europe, several daily press reports and Europe Documents, 1988-1992.
Akhtar, M.A. and Howard Howe (1991), ‘The Political and International Independence of U.S. Monetary Policy’, Banca Nazionale del Lavoro Quarterly Review, no. 178, September.
Alesina, Alberto (1988), ‘Macroeconomics and Politics’ in S. Fischer(ed.), NBER Macroeconomics Annual.
Alesina, Alberto and Lawrence Summers (1993), ‘Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence’, Journal of Money, Credit and Banking 25
Alesina, Angeloni and Etro (2001), ‘Institutional Rules for Federations’, NBER Working Paper 8646.
Amtenbrink, Fabian (1999), The Democratic Accountability of Central Banks – A comparative study of the European Central Bank.
Artis, M. (2002), ‘EMU: the First Four Years’, paper presented by at the conference ‘Enlargement and the Future of Europe 2002’, Institute for International Policy Studies, Tokyo, November 2002.
Aufricht, Hans (1967), ‘Central Bank Legislation’, Vol. II: Europe, IMF Monograph Series no. 4.
Bade and Parkin (1978), Central Bank Laws and Monetary Policy: A Preliminary Investigation’, in: M. Porter (1978), The Australian Monetary System in the 1970s: the proceedings of a conference (Victoria, Austalia, 1977).
Bade and Parkin (1988), Central Bank Laws and Monetary Policy: A Preliminary Investigation, Dept. of Economics, University of Western Ontario.
Bakker, Age F.P. (1996), The Liberalization of Capital Movements in Europe – the Monetary Committee and Financial Integration 1958-1994.
Bakker, Age F.P. (1996), ‘Verslag van een bezoek aan het Federal Reserve System’, (Report of a Visit to the Federal Reserve System), De Nederlandsche Bank, December 1996.
Barents, R. and L.J. Brinkhorst (1994), Grondlijnen van het Europees Recht.
Barro and Gordon (1983), ‘A Positive Theory of Monetary Policy in a Natural-Rate Model’, Journal of Political Economy 91 (August 1983), pp. 589-610.
BBC2 – Arte TV (1998), ‘The European Monetary Union’, (Brook Lappings Production).
Beaufort Wijnholds, Onno de (1992), Inaugural Lecture on the Occasion of the Assumption of the Office of Professor of Monetary and Banking at the University of Groningen.
Begg and Green (1998), ‘The Political Economy of the European Central Bank’, in Arestis and Sawyer (eds.) The Political Economy of Central Banking.
Berg, van den Carel C.A. and Cindy van Oorschot (2000), ‘Wie is de lender of last resort in EMU?’ Maandschrift Economie, Vol. 64, February 2000, pp. 77-85.
Berg, van den Carel C.A., ‘Relationship between the ECB and the Ecofin Council and its Implications for the Exchange Rate Policy for the Euro’, Economic and Financial Computing (European Economics and Financial Centre), Vol. 8, no. 2, Summer 1998.

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