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Dirk Ooms Philippe Quintin National Bank of Belgium

The introduction of the Euro. Dirk Ooms Philippe Quintin National Bank of Belgium. The introduction of the euro : European scenario. Two deadlines 04.01.1999 : introduction of non cash euro start of the transition period national currency retains legal tender status 01.01.2002 :

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Dirk Ooms Philippe Quintin National Bank of Belgium

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  1. The introduction of the Euro Dirk OomsPhilippe Quintin National Bank of Belgium

  2. The introduction of the euro :European scenario Two deadlines 04.01.1999 : • introduction of non cash euro • start of the transition period • national currency retains legal tender status 01.01.2002 : • introduction of euro notes and coins • end of transition period • start of exhange of notes and coins

  3. Belgian scenario : maximum option Different choice abroad : ( double big bang )

  4. National Changeover Plan Translation of Madrid scenario (December 1995) into a National Changeover Plan AIMS: From January 1, 1999: - financial flows will be possible both in euro and in BEF - information concerning these flows will be exchanged in euro and in BEF - neutrality of public administration Principle of NO PROHIBITION, NO COMPULSION

  5. National Changeover Plan Concerns: - the changeover of payment systems - the issuing of public debt securities - financial markets - banking operations - public administrations - accounting - physical persons - reporting bodies and statistics  creating of a permanent coordination structure

  6. National Changeover Plan Concerns 1. The National Bank of Belgium 2. Public debt: - linear bonds and treasury certificates will be issued in euro Government notes and "Philippe" loans will progressively be issued in euro

  7. National Changeover Plan 3. Financial markets: - quotation and settlement carried out in euro among professionals, communication with third parties in BEF or euro 4.Banks: - scriptural payments in BEF or euro. Application of "no compulsion, no prohibition"

  8. National Changeover Plan 5. Public administrations: - internal functioning: changeover on January 1, 2002 - external communication: in euro or BEF from January 1, 1999 6. Accounting practices: - in BEF or euro for annual accounts closed from January 1, 1999

  9. National Changeover Plan 7. Physical persons: - accounts in euro can be opened from January 1, 1999 - same for salaries and other allowances 8. Reporting bodies and statistics: - possibility to opt for the euro from January 1, 1999  Creation of permanent coordination structure

  10. NBB Changeover Plan Objectives: • changeover of the NBB • integration of the NBB into the ESCB

  11. NBB Changeover Plan Approach: combination of • centralisation • decentralisation Excluded: • legal convergence • social aspects

  12. NBB Changeover Plan Steering Committee "NBB in stage 3" • established - spring 1996 • composition • mandate: preparing the Bank for its own changeover to the euro and for its participation as an operational entity in the Eurosystem

  13. NBB Changeover Plan Organisation of activities: identification of 8 overall sectors(cf. EMI sub-committees and working groups)

  14. NBB Changeover Plan • Monetory and exchange rate policy • Payment systems • Securities • Statistics • Banknote production and circulation • Accounting • Data exchange • IT

  15. NBB Changeover Plan • designation of responsibles per area • identification of projects • regular monitoring, meeting and reporting

  16. NBB Changeover Plan "Big Bang" option (1997): the complete changeover of the Bank, its accounts and its transactions as from the start of the third stage

  17. NBB Changeover Plan BUT: NO PROHIBITION, NO COMPULSION

  18. General Commission for the Euro • Decision taken by the Council of Ministers on November 22nd, 1996, to create a permanent structureto coordinate the preparation for the single currency • 1.AIMS • favour the exchange of ideas and information between the sectors concerned • see to the coherence of initiatives and decisions • ensure the necessary initiatives are taken •  make sure deadlines are met • make RECOMMENDATIONS

  19. General Commission for the Euro 4 central groups COM EURO COM Structure FIN EURO ADMI EURO ECO EURO Financial sector Publicsector Companies & consumers Communication

  20. General Commission for the Euro Steering Committee Euro Cel Structure General Assembly

  21. Recommendations of Fin euro In charge of the co-ordination of the changeover of the financial sector to the single currency cover : - principles banks have adopted - adaptation of non cash means of payment - changeover of financial markets (quotation and publication of stock prices) - preparation of the cash changeover - control and reporting

  22. How and when will banknotes be exchanged ?

  23. ADMI-EURO Meeting of general secretaries (top civil servants) executive committee ( Permanent unit + Coordoninators general) Sector coordinators Local authorities IT Communication Budget + Accounting Regulation

  24. Preparation of non financial enterprises and private persons for the euro

  25. The non financial economy • Numerous and diverse themes and actors • Relations between enterprises • Relations employers/employees • Relations enterprises / consumers • Prices : indication, control ... continuity of contracts • Accounting • recommendations of the concertation bodies • RECOMMENDATIONS

  26. Label and code of good conduct Label provided to professionals if certain rules are respected • twin indication of minimum prices • information to customers • indication of whether payments in euro are accepted • instruments to facilitate the conversion • respect of rules regarding conversion, rounding and the continuity of contracts ! Euro observatory

  27. Payments in euro accepted

  28. Other actors European commission: • legal framework • communication material • surveys European Central Bank: • Co-ordination changeover 1999 • Euro 2002 - communication campaign

  29. Legal framework • European law • National law • Organic law of the NBB

  30. Changeover weekend Eurosystem • critical milestones • teleconferences National economy

  31. Recommendations concerning conversion and rounding - Conversion BEF EUR and EUR BEF - Conversion of prices - Cross conversions - Specific cases : reconstitution of amounts and reconciliation of results - Conversion of statistics - Conversion of limits - Accounting problems.

  32. BELGIUM Banknotes in circulation: number : 330 million representing some ± 440 billion BEF Coins: number : 3.5 billion representing some : 23 billion BEF weight : ± 12000 tons

  33. Practical details • Pro-active scenario

  34. Pro-active scenario From July 1st, 2001 accelerate use of the euro by among others : - conversion of bank accounts into euro - invoicing in euro - sending euro transfer forms - encouraging the use of the euro in enterprises - adapting petrol pumps, metrological equipment...

  35. 1- Banks • Make customers aware of the euro by • providing information • proposing products and services in euro • On July 1st, 2001 : • Banks progressively convert bank accounts and products into euro but statements mention both currencies, (EUR and BEF) !

  36. 2- Major invoice issuing bodies • Companies that issue most invoices, such as telecom operators, electricity, gas and water providers, insurance companies... • start on July 1st,2001 with : • invoicing completely in euro • transfer forms in euro

  37. 3- Public authorities • Start as from July 1st, 2001 : to draw up and send out EUR transfer forms • For operations whose pay by date is after December 31st, 2001, EUR transfer forms will be sent out

  38. 4- Enterprises Focus points : • accounting • social administration don't wait until January 1st, 2002!

  39. 5- Metrological equipment • adaptation possible from July 1st, 2001 • taxameters • scales • petrol pumps • additional information in BEF at least until 31st of December 2001

  40. Practical details • The Belgian scenario for the changeover of euro notes and coins

  41. The Belgian changeover scenario Phase I: preparatory phase from September to end 2001: frontloading Banks, Post Office, Security carriers Distribution, Commerce Private persons from October 15th to November 15th 2001: operation piggy bank E-Day • new storage place • adapted communication in function of the target group

  42. Frontloading professionals : Euro banknotes: • bundles of 25 or 100 notes • small denominations : 5, 10 and 20 € Euro coins: • euro starterkits • rolls

  43. EUROSTARTERKIT PROFESSIONALS Frontloading via financial institutions • Transportation and storage • Start with an event width : 15,8 cm, length : 23,7 cm, height : 2,8 cm

  44. EUROSTARTERKIT PROFESSIONALS

  45. Frontloading public (from December 15th, 2001) • only coins • euro minikits 12,40 € (500 BEF) • via banks, post office, public transport companies, employers

  46. EUROMINIKIT GRAND PUBLIC

  47. "Operation piggybank" • from October 15th to November 15th 2001 • Information campaign

  48. "Operation piggybank" • in plastic clips • to be handed in completely full at the counters of commercial banks, the Post Office and the National Bank of Belgium • free of charge

  49. The Belgian changeover scenario Phase II: twin circulation Period of twin circulation Frontloading Critical mass End of legal tender from September 2001 28 February 2002 mid January 2002 E-Day

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