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Euro changeover:the Belgian experience (1996 - 2002)
Carlos RUBENSSenior Legal Advisor
Brussels, 14/04/2008
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Main milestones and steps...
► Starts on 26 February 1992 (Ratification by Belgian Parliament of the Treaty of Maastricht)
► 1992-1993 : achievement of the single market► 1994-1998 : economical convergence, preparation
of (cashless) euro changeover► 1999-2001 : preparation of cash euro changeover
and definitive introduction of euro in legislation► No big bang scenario !
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The first mood...
► No experience: very new stuff ! - but important steering by EU (and ECB and other NCBs)
► Replacing one exchange standard for another one: sounds easy ! But...
► So many different aspects of money involved in the current life: lots, lots of work !
► -> Where to begin with ?
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Procedure
► First choice: big bang vs. dual introduction ?(Belgium and the other NCBs of the "first wave": no choice: dual introduction currency in 1999, notes and coins in 2002 - see also decision of Madrid in 2005).
► Political and social choices: wide consultations vs. strong political guidance ? Soft vs hard law.(Belgium: very wide consultations of all interested social, economical and political groups and lobbies)
► Importance of the timing(Belgium: national changeover plan dd. 1996, overall Act in October 1998, changeover on Januari 1999 !)
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Basic rules
► From scratch: Belgian franc = peculiar expression of euro (following a fix, non decimal exchange rate)
► Consequences:● continuity of contracts and obligations
● free "exchange" of assets in national currency against assets in euros
● free exchange of notes and coins ?
► Importance of appropriate sanctions !
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Points of interest: changeover
► Conversions: double display of prices► Rounding rules: coherence
● totalisation of amounts
● small unit tariffs
● amounts forthcoming from EU regulations
● rounded amounts : acts and decrees, minimum capital of companies, fines...
► Interest rates: replacement rules► Transfer of competences from NCB to ECB
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Points of interest: changeover (2)
► Instruments formerly issued:● securities (bonds, shares): validity limit ?
● means of payment (check, letter of exchange): validity limit ?
● stamps ... : validity limit ?
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Points of interest: cash changeover
► Euro: before cash introduction = abstract► Legal tender:
● withdrawal of local notes and coins: by whom, how much, price ?
● dual circulation: how long ? No return of cash in local currency
● expiration date of legal tender of local cash
● withdrawal by central bank: how long ?
● automatic vending machines, parking machines: dual circulation ?
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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
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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.
► Law dd. 22 February 1998 : reform of the statute of the central bank (Articles 107-108 Statute ESCB)
Belgian specific laws
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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.
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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.
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Some advices...
► Be pragmatical► Do not hesitate to ask for experience or advice► Make use of our address book...
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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 : [email protected]
Thank you for your patience !
Carlos RUBENSSenior Legal Advisor
Brussels, 14/04/2008