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„Steps on the road to the EU Integrations ”

„Steps on the road to the EU Integrations ”. European Integrations Department Centra l Bank of Bosn ia and Her z egovin a. *see details. 2. EU Institutional Framework. The Treaty establishing the European Community sets the following: Council of the European Union European Commission

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„Steps on the road to the EU Integrations ”

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  1. „Steps on the road to the EU Integrations” European Integrations Department Central Bank of Bosnia and Herzegovina

  2. *see details 2

  3. EU Institutional Framework • The Treaty establishing the European Community sets the following: • Council of the European Union • European Commission • European Parliament • European Council • Court of Justice of the European Community • European Court of Auditors

  4. EU Accession Criteria Any European state based on principles of liberty, democracy, respect for human rights and fundamental freedoms, and rule of law can apply for membership to the EU (Act 49. Treaty on EU)

  5. Copenhagen criteria • Criteria established by the Copenhagen European Council in 1993 and strengthened by the Madrid European Council in 1995 • Political: establishing of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities and acceptance of the EU political objectives; • Economic: functioning of market economy with solid market elements and the capacity to cope with competitive pressure and adjustment to market mechanisms within theUnion; • Legal: ability to accept the obligations arising from theEU membership, including acceptance of the EU acquis communautaire

  6. Economic and Monetary Union (EMU) • 1992, Maastricht, Treaty on the European Union (EU) signed setting the foundation for Economic and Monetary Union (EMU) establishing economic and financial discipline criteria with aim of introducing single European currency *see details

  7. Maastricht (Convergence) criteria • Article 121, Treaty on EU, criteria for full membership in the EMU: • Inflation rate should not be higher than 1.5 % of the average inflation in the three EU member stateswith the lowest inflation rates • Budget deficit should not exceed 3% of GDP • Public debtshould not exceed 60% of GDP • Average nominal long-term interest rate should not exceed 2 percentage points in respect to interest rates of the three EU countries with lowest inflation rate • Stability of exchange rate and implementation of ERM II (exchange rate mechanism): at least two years before the adoption of EUR, the exchange rate of the currency to EUR must fluctuate within the allowed limits +/-15% in relation to the central parity *see details

  8. ESCB / Eurosystem • European Central Bank (ECB) – at the center of the ESCB and Eurosystem • European System of Central Banks (ESCB) – ECB and central banks of all the Member States • Eurosystem: ECB and national central banks of the EU Member States that have introduced euro • Eurosystem and ESCB will coexist until there are Member States outside the euro area *see details

  9. Euro Area Entry • The country's entry into the euro zone is governed by the Treaty Establishing the European Community, specifically in Article 122. The relevant provisionsregulate the decision on cancelling the right to derogation for the introduction of euro by the ECOFIN Council at the proposal of the Commission and after consulting the European Parliament and the European Council. The decision depends on the conclusions of Convergence Reports (fulfillment of the Maastricht criteria) as well as the compatibility of national legislation with the EU legislation. After the decision on cancelling the derogation right, the Council of the EU decides on the exact date of euro area entry and on fixing the conversion exchange rate of the national currency vis-à-vis euro. *see details

  10. European System of Central Banks (ESCB) • Last update in August 2012

  11. ESCB / Eurosistem: Main Objectives • Primary objective:to maintain price stability (Treaty on EU, Article 105 (1)) • "Price stability is defined as an annual increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%.“ (The ECB’s Governing Council, 1998), maintaining inflation below 2%(The ECB’s Governing Council, 2003). • Support to economic policies in the EU *see details

  12. ESCB / Eurosystem:Basic Tasks • According to the Treaty on EU (Article 105(2)) and the Statute of the ESCB (Article 3.1.): • To define and implementthe single monetary policy • To conduct foreign exchangeoperations • To hold and manageofficial foreign reserves of theparticipating Member States • To promote smoothoperations of payment systems *see details

  13. ESCB / Eurosystem Committees (1/2) • International Relations Committee (IRC) • Monetary Policy Committee (MPC) • Financial Stability Committee (FSC) • Committeeon Cost Methodology (COMCO) • Banknote Committee (BANCO) • Eurosystem/ESCB Communications Committee (ECCO) • Internal Auditors Committee (IAC) • Accounting and Monetary Income Committee (AMICO) *see details

  14. ESCB / Eurosystem Committees (2/2) • Legal Committee (LEGCO) • Market Operations Committee (MOC) • Payment and Settlement Systems Committee (PSSC) • Information Technology Committee (ITC) • Eurosystem IT Steering Committee (EISC) • Statistics Committee (STC) • Risk Management Committee (RMC) • Budget Committee (BUCOM) • Human Resources Conference (HRC) *see details

  15. The road to EU/EMU Membership *see details

  16. Central Bank of Bosniaand Herzegovinain the European Integration Process (1/3) • Institutional structures after the entry into force of the Interim Agreementon Stabilization and Association on 1 July 2008 • Subcommittee for Trade, Industry, Customs and Taxes • Subcommittee for Agriculture, Food Safety and Fisheries • Subcommittee for Internal Market and Competition • Subcommitee for Economic – Financial Issues and Statistics • Subcommitee for Judiciary and Internal Affairs • Subcommitee for Innovations, Technical Development and Social Politics • Subcommitee for Transport, Environment, Energy and Regional Development *see details

  17. Central Bank of Bosniaand Herzegovinain the European Integration Process (2/3) • The CBBH continuously works on the strenghtening of its institutional capacitiesin compliance with the EU central banking standards and CBBH participates, within its competences, in preparation of the following documents and reports: • BH Progress Report, which monitors, on a yearly basis, the country’s progress towards the European integration, including: • Analysis of the BH political criteria, • Analysis of the BH economic criteria, • Analysis of the BH capacity for the implementation of the European standards (in relation to acquis communautaire, Stabilization and Association Agreement, European Partnership)

  18. Central Bank of Bosniaand Herzegovinain the European Integration Process (3/3) • Economic-fiscal Programme is considered as a preparation for the Pre-accesion Economic Programme, which is a mandatory document for the candidate countries for the EU Membership, that enables preparation of Convergence Programme after the EU accesion • Action plan for the implementation of IA and SAA • Gradual harmonization of the CBBH legislation with the acquis communautaire • Use of the pre-accession financial assistance of the EU • Establishment and enhancement of the cooperation with the EU institutions

  19. CBBH Cooperation Programmes with theECB & Eurosystem For more information about the EU Fonds, we recommend the website of the Directorate for European Intergations: http://www.dei.gov.ba/ *see details

  20. Thank you for your attention 20 20

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