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The Belgian Euro change-over laws

The Belgian Euro change-over laws. Prague, 14/01/2008. Carlos RUBENS Senior Legal Advisor. Historical milestones of the EMU. Origin : European Union Treaty Signed on 7 February 1992 in Maastricht Ratification : Belgian Law dd. 26 November 1992 1st Phase (1992-1993) :

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The Belgian Euro change-over laws

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  1. The Belgian Euro change-over laws Prague, 14/01/2008 • Carlos RUBENS • Senior Legal Advisor

  2. Historical milestones of the EMU • Origin : European Union Treaty • Signed on 7 February 1992 in Maastricht • Ratification : Belgian Law dd. 26 November 1992 • 1st Phase (1992-1993) : • Achievement of the single market • Liberalization of capital flows • Prohibition of monetary financing of public authorities by central banks • 2nd Phase (1994-1998) : • Economical performances, inflation and public deficit convergence • Creation of the European Monetary Institute • Preparation of the euro changeover

  3. Historical milestones of the EMU • 3rd Phase (1999 – now) : introduction of the euro • Independance of the central bank • Compatibility of the national legislation with the Treaty • Admission criteria fulfilled • Euro becomes the single currency having legal tender a) Transitional period (1999- 2002) : Euro is a mean of payment and account unit b) Definitive period : Introduction of notes and coins (dual circulation limited in time) Euro is a full currency.

  4. Legal Basis : hierarchy of applicable rules • European Regulation • Belgian Laws (< Belgian Parliament) – regional acts • Royal Decrees (< Belgian Government) – regional decrees • Ministerial Decrees (< Competent Belgian or regional Minister)

  5. Legal Technique used Principles : • Simple reference to European rules • Those rules are dynamic : they may change • Avoids misunderstandings or imperfect implementation • Definition of the general principes in overall Laws, broad delegation of competence to the King (= the Government) to further define and implement those principes • Definition of specific principles in ad hoc Laws

  6. Legal Technique used Principles (2) : • Delegation of competence to the Minister for the practical implementation regarding very specific topics • Delegation of competence to the King to adapt (rounded) amounts in the federal legislation. Regional legislation needs to be adapted by the regional authorities.

  7. European Regulation • EU Treaty, Statute of the ESCB and of the ECB • Regulation 1103/97 dd. 17 June 1997 : equivalence of expressions in euro and national currencies, continuity of contracts and other legal instruments, conversion and rounding rules, deletion of the ECU. • Regulation 974/98 dd. 3 May 1998 : legal framework( “no compulsion, no prohibition”). • Regulation 975/98 dd. 3 May 1998 : unitary values and technical specifications of coins, definitive replacement of national currencies.

  8. Belgian overall laws • Law dd. 30 October 1998 : introduction of the euro during the transitional period • Law dd. 26, 30 June and 3 July 2000 : introduction of the euro • Law dd. 10 December 2001 : definitive euro changeover.

  9. Overall laws : law dd. 30 October 1998 Scope : introduction of the euro during the transitional period Timing : • 04/03/1998 : Consultation of the State Council • 19/03/1998 and 08/04/1998 : Advices of the State Council • 06/04/1998 : Advice of the EMI • 27/04/1998 : Draft Law introduced in the Parliament by the Government • 05/05/1998 – 20/05/1998 : Draft Law adopted by different Commissions of the Parliament

  10. Overall laws : law dd. 30 October 1998 Timing (2) : • 11/06/1998 : Draft Law adopted by the Parliament • 12/06/1998 : Draft Law transmitted to the Senate • 17/06/1998 : Decision to examine the Draft Law • 27/10/1998 : Examination of the Draft Law • 29/10/1998 : Decision of the Senate not to amend • 30/10/1998 : Signature by the King • 10/11/1998 : Publication in the Official Journal

  11. Overall laws : law dd. 30 October 1998 Contents : • Conversion and Rounding rules • Reference interest rates • Administrative and fiscal provisions : • Declaration Forms • Income Tax (choice of euro or Belgian franc) • Value Added Tax (choice of euro or Belgian franc) • Economic and financial provisions : • Financial instruments (currency of securities) • Financial markets (checks, valuation of foreign currencies)

  12. Overall laws : law dd. 30 October 1998 Contents (2) : • Monetary provisions (coins) • Medals and tokens looking like euro coins (prohibited) • Capital of commercial companies (simplified conversion and rounding of the social capital) • Dual display of prices • Social security declaration forms (choice of euro or Belgian franc) • Conversion and exchange by financial institutions (costless) • Continuity of contracts • Sanctioning regime • Entry into force

  13. Overall laws : law dd. 30 October 1998 Sample of application Royal Decrees : • 26/11/1998 : reference interest rates • 27/11/1998 : rounding of amounts not to be paid or accounted • 15/12/1998 : euro changeover in accountancy • 16/12/1998 : adaptation of some public forms • 17/12/1998 : dual display op prices • 17/12/1998 : indication of exchange commissions related to currency units of the euro zone • 10/01/1999 : approval of convertors of BEF in EUR and oppositely • Etc...

  14. Overall laws : laws dd. June - July 2000 Scope : Overall conversion of rounded amounts in the federal legislation : • Law dd. 26/06/2000 • Law dd. 30/06/2000 • Law dd. 03/07/2000 Timing : • 27/12/1999 : Consultation of the State Council • 09/02/2000 : Advice of the State Council • 07/04/2000 : Draft Laws introduced in the Parliament by the Government

  15. Overall laws : laws dd. June – July 2000 Timing (2) : • 25/04/2000 : Draft Laws adopted by the Finance and Budget Commission of the Parliament • 11/05/2000 : Draft Law adopted by the Parliament • 12/05/2000 : Draft Laws (B) and (C) transmitted to the Senate • 30/05/2000 : Decision of the Senate not to amend Draft Law (C) • 22/06/2000 : Draft Law (B) adopted by Senate • (A) 26/06/2000 - (B) 30/06/2000 – (C) 03/07/2000 Signed by the King • 29/07/2000 : Publication in the O.J.

  16. Overall laws : laws dd. June – July 2000 Contents : 1. “Twin” laws dd. 26/06/2000 and 30/06/2000 : • Conversion of amounts of fines rounded in Belgian francs to amounts rounded in euro • Delegation to the King to : • Replace in the federal legislation specific amounts in Belgian francs by specific amounts in euro • Convert amounts rounded in Belgian francs to amounts rounded in euro • Erase the distortions between scale brackets after their conversion to the euro • The Parliament confirmed all those changesby a law dd. 26/06/2002

  17. Overall laws : laws dd. June – July 2000 Contents (2) : 1. “Twin” laws dd. 26/06/2000 and 30/06/2000 : • Amounts in ecu of European Directives implemented in Belgian francs are not reconverted but reset in their original amount • Difference between both laws : only technical legal reasons : • Law A) : all matters in the field of competence of the Parliament (optional evocation by the Senate is possible) • Law B) : all matters in the field of competence of both the Parliament and the Senate

  18. Overall laws : laws dd. June – July 2000 Contents (3) : 2. Law dd. 03/07/2000 : • Fields format change of IT-programs of the public sector allowed (dot and decimal digits) • Conversion and rounding to euro of data stored in the IT-databases of the public sector allowed, including the deletion of distortions in the scale brackets and conversion differences • Conversion to euro of taximeters and metrological instruments already allowed as from 01/07/2001.

  19. Overall laws : laws dd. June – July 2000 Sample of application Royal Decrees : • 20/07/2000 : Royal Decrees about the legislation relating to many federal Ministries • 20/07/2000 : capital of companies • 13/07/2001 : legislation relating to the Ministry of Economy • 13/07/2001 : rounding and smoothing of wage scales of judges and Prosecutors • Etc...

  20. Overall laws : laws dd. June – July 2000 Sample of regional legislation : • 18/07/2001 : decree of the Wallon Executive regarding its legislation • 08/11/2001 : decree of the Brussels Executive regarding its legislation • 08/11/2001 : decree of the French Speaking Community Executive regarding its legislation • Etc...

  21. Overall laws : law dd. 10 December 2001 Scope : legal framework related to the introduction of euro banknotes and coins Timing : • 26/06/2001 : Advice of the ECB • 31/07/2001 : Consultation of the State Council • 14/08/2001 : Advices of the State Council • 22/10/2001 : Draft Law introduced in the Parliament by the Government • 14/11/2001 : Draft Law adopted by Finance and Budget Commission of the Parliament

  22. Overall laws : law dd. 10 December 2001 Timing (2) : • 29/11/2001 : Draft Law adopted by the Parliament • 30/11/2001 : Draft Law transmitted to the Senate • 06/12/2001 : Decision not to examine the Draft • 10/12/2001 : Signature by the King • 20/12/2001 : Publication in the Official Journal

  23. Overall laws : law dd. 10 December 2001 Contents : • Abolition of legal tender and exchange of notes and coins in Belgian francs • Acceptance of notes and coins in euro • Control by NBB of the quality of banknotes in circulation • Issuance of national coins in euro • Protection of banknotes and coins having legal tender, prohibition of euro circulation before 2002 • Currency of checks written down from 01/01/2002

  24. Overall laws : law dd. 10 December 2001 Sample of application Royal Decrees : • 12/12/2001 : issuance of the first series of coins • 12/12/2001 : special marking of banknotes in Belgian francs to be withdrawn from circulation after the change-over • Etc...

  25. Ad-hoc law : law dd. 22 February 1998 Scope : reform of the statute of the central bank (Articles 107-108 Statute ESCB) Timing : • 09/09/1996 : Consultation of the EMI • 23/12/1996 : Consultation of the State Council • 24/03/1997 : Advice of the State Council • 04/06/1997 : Draft Law introduced in the Parliament by the Government • 08/07/1997 : Draft Law adopted by the Finance and Budget Commission of the Parliament • 10/07/1997 : Draft Law adopted by the Parliament

  26. Ad-hoc law : Law dd. 22 February 1998 Timing (2) : • 11/07/1997 : Draft Law transmitted to the Senate • 17/10/1997 : Decision to examine the Draft Law • 08/01/1998 : First examination of the Draft Law • 12/02/1998 : Decision of the Senate not to amend • 22/02/1998 : Signature by the King • 28/03/1998 : Publication in the Official Journal

  27. Ad-hoc law : law dd. 22 February 1998 Principles : • NBB becomes an integral part of the ESCB, primarily governed by its Statute, and may carry out tasks and transactions within the domain of the ESCB (< decentralisation principle, Article 12.1 ESCB Statute) • Transfer of decisional competences to the ECB • NBB is allowed to conduct other public tasks which are not incompatible with the ESCB missions (cf. Article 14.4 ESCB Statute) : • By itself, or • By a subsidiary controlled by NBB

  28. Ad-hoc law : law dd. 22 February 1998 Principles (2) : • Repartition of NBB net financial income, accountancy rules, confidentiality regime adapted • NBB is independent from the Executive Power : • Powers of the Government’s representative limited • No Government’s authorization anymore to settle of delete NBB branches • Dismissal of the Governor can be appealed with the Governing Council • Incompatibility regime between public charges (Legislative or Executive Powers) and member of the organs of the NBB

  29. Final remarks • The introduction of the euro in Belgium was broadly supported by the population. Nevertheless, the change of the legislation spent a lot of time and, sometimes, occurred on the razor's edge. • Start as soon as possible • Organize and plan the actions to be performed • Use the delegation toolbox without hesitation • Take care for unpredictable delays • Look for a broad sociological support, if possible...

  30. Documentation provided as an annex • Law dd. 22 February 1998 relating to the NBB (+ EMI advice) • Law dd. 30 October 1998 : introduction of the euro during the transitional period (+ EMI advice) • Law dd. 26, 30 June and 3 July 2000 : introduction of the euro • Law dd. 10 December 2001 : definitive euro changeover (+ ECB advice)

  31. Any question ? • For further information or ancillary questions, do not hesitate to contact Carlos Rubens : • Postal address : NBB-JU, de Berlaimontlaan 14, B-1000 Brussels • Phone : 00 32 22 21 42 63 • Fax : 00 32 22 21 31 59 • E-mail : carlos.rubens@nbb.be

  32. Thank you for your patience ! Prague, 14/01/2008 • Carlos RUBENS • Senior Legal Advisor

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