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Euro changeover: the Belgian experience (1996 - 2002)

Euro changeover: the Belgian experience (1996 - 2002). Brussels, 14/04/2008. Carlos RUBENS Senior Legal Advisor. 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

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Euro changeover: the Belgian experience (1996 - 2002)

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  1. Euro changeover:the Belgian experience (1996 - 2002) Brussels, 14/04/2008 • Carlos RUBENS • Senior Legal Advisor

  2. 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 !

  3. 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 ?

  4. 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 !)

  5. 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 !

  6. 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

  7. 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 ?

  8. 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 ?

  9. 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

  10. 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

  11. 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.

  12. 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.

  13. Some advices... • Be pragmatical • Do not hesitate to ask for experience or advice • Make use of our address book...

  14. 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

  15. Thank you for your patience ! Brussels, 14/04/2008 • Carlos RUBENS • Senior Legal Advisor

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