The Treaty of the European Union, Maastricht Treaty, 7th February, 1992

by European Union

CHAPTER IV MONETARY FUNCTIONS AND OPERATIONS OF THE ESCB ARTICLE 17 Accounts with the ECB and the national central banks. In order to conduct their operations, the ECB and the national central banks may open accounts for credit institutions, public entities and other market participants and accept assets, including book-entry securities, as collateral. ARTICLE 18 Open market and credit operations. 18.1. In order to achieve the objectives of the ESCB and to carry out its tasks, the ECB and the national central banks may: - operate in the financial markets by buying and selling outright (spot or forward) or under repurchase agreement and by lending or borrowing claims and marketable instruments, whether in Community or in non-Community currencies, as well as precious metals; - conduct credit operations with credit institutions and other market participants, with lending being based on adequate collateral. 18.2. The ECB shall establish general principles for open market and credit operations carried out by itself or the national central banks, including for the announcement of conditions under which they stand ready to enter into such transactions. ARTICLE 19 Minimum reserves 19.1. Subject to Article 2, the ECB may require credit institutions established in Member States to hold minimum reserves on accounts with the ECB and national central banks in pursuance of monetary policy objectives. Regulations concerning the calculation and determination of the required minimum reserves may be established by the Governing Council. In cases of non-compliance the ECB shall be entitled to levy penalty interest and to impose other sanctions with comparable effect. 19.2. For the application of this Article, the Council shall, in accordance with the procedure laid down in Article 42, define the basis for minimum reserves and the maximum reserves and the maximum permissible ratios between those reserves and their basis, as well as the appropriate sanctions in cases of non-compliance. ARTICLE 20 Other instruments of monetary control The Governing Council may, by a majority of two thirds of the votes cast, decide upon the use of such other operational methods of monetary control as it sees fit, respecting Article 2. The Council shall, in accordance with the procedure laid down in Article 42, define the scope of such methods if they impose obligations on third parties. ARTICLE 21 Operations with public entities. 21.1. In accordance with Article 104 of the Treaty, overdrafts or any other type of credit facility with the ECB or with the national central banks in favour of Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the ECB or national central banks of debt instruments. 21.2. The ECB and national central banks may act as fiscal agents for the entities referred to in 21.1. 21.3. The provisions of this Article shall not apply to publicly-owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the ECB as private credit institutions. ARTICLE 22 Clearing and payment systems The ECB and national central banks may provide facilities, and the ECB may make regulations, to ensure efficient and sound clearing and payment systems within the Community and with other countries. ARTICLE 23 External operations The ECB and national central banks may: - establish relations with central banks and financial institutions in other countries and, where appropriate, with international organizations; - acquire and sell spot and forward all types of foreign exchange assets and precious metals; the term "foreign exchange asset" shall include securities and all other assets in the currency of any country or units of account in whatever form held; - hold and manage the assets referred to in this Article; - conduct all types of banking transactions in relations with third countries and international organizations, including borrowing and lending operations. ARTICLE 24 Other operations In addition to operations arising from their tasks, the ECB and national central banks may enter into operations for their administrative purposes or for their staff.

CHAPTER V PRUDENTIAL SUPERVISION ARTICLE 25 Prudential supervision 25.1. The ECB may offer advice to and be consulted by the Council, the Commission and the competent authorities of the Member States on the scope and implementation of Community legislation relating to the prudential supervision of credit institutions and to the stability of the financial system. 25.2. In accordance with any decision of the Council under Article 105(6) of this Treaty, the ECB may perform specific tasks concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings.

CHAPTER VI FINANCIAL PROVISIONS OF THE ESCB ARTICLE 26 Financial accounts 26.1. The financial year of the ECB and national central banks shall begin on the first day of January and end on the last day of December. 26.2. The annual accounts of the ECB shall be drawn up by the Executive Board, in accordance with the principles established by the Governing Council. The accounts shall be approved by the Governing Council and shall thereafter be published. 26.3. For analytical and operational purposes, the Executive Board shall draw up a consolidated balance sheet of the ESCB, comprising those assets and liabilities of the national central banks that fall within the ESCB. 26.4. For the application of this Article, the Governing Council shall establish the necessary rules for standardizing the accounting and reporting of operations undertaken by the national central banks. ARTICLE 27 Auditing 27.1. The account of the ECB and national central banks shall be audited by independent external auditors recommended by the Governing Council and approved by the Council. The auditors shall have full power to examine all books and accounts of the ECB and national central banks and obtain full information about their transactions. 27.2. The provisions of Article 188c of this Treaty shall only apply to an examination of the operational efficiency of the management of the ECB. ARTICLE 28 Capital of the ECB 28.1. The capital of the ECB, which shall become operational upon its establishment, shall be ECU 5 000 million. The capital may be increased by such amounts as may be decided by the Governing Council acting by the qualified majority provided for in Article 10.3, within the limits and under the conditions set by the Council under the procedure laid down in Article 42. 28.2. The national central banks shall be the sole subscribers to and holders of the capital of the ECB. The subscription of capital shall be according to the key established in accordance with Article 29. 28.3. The Governing Council, acting by the qualified majority provided for in Article 10.3, shall determine the extent to which and the form in which the capital shall be paid up. 28.4. Subject to Article 28.5, the shares of the national central banks in the subscribed capital of the ECB may not be transferred, pledged or attached. 28.5. If the key referred to in Article 29 is adjusted, the national central banks shall transfer among themselves capital shares to the extent necessary to ensure that the distribution of capital shares corresponds to the adjusted key. The Governing Council shall determine the terms and conditions of such transfers. ARTICLE 29 Key for capital subscription 29.1. When in accordance with the procedure referred to in Article 109l(1) of this Treaty the ESCB and the ECB have been established, the key for subscription of the ECB's capital shall be established. Each national central bank shall be assigned a weighting in this key which shall be equal to the sum of: - 50% of the share of its respective Member State in the population of the Community in the penultimate year preceding the establishment of the ESCB; - 50% of the share of its respective Member State in the gross domestic product at market prices of the Community as recorded in the last five years preceding the penultimate year before the establishment of the ESCB; The percentages shall be rounded up to the nearest multiple 0.05 percentage points. 29.2 The statistical data to be used for the application of this Article shall be provided by the Commission in accordance with the rules adopted by the Council under the procedure provided for in Article 42. 29.3. The weighting assigned to the national central banks shall be adjusted every five years after the establishment of the ESCB by analogy with the provisions laid down in Article 29.1. The adjusted key shall apply with effect from the first day of the following year. 29.4. The Governing Council shall take all other measures necessary for the application of this Article. ARTICLE 30 Transfer of foreign reserve assets to the ECB 30.1. Without prejudice to Article 28, the ECB shall be provided by the national central banks with foreign reserve assets, other than Member States' currencies, ECUs, IMF reserve positions and SDRs, up to an amount equivalent to ECU 50 000 million. The Governing Council shall decide upon the proportion to be called up by the ECB following its establishment and the amounts called up at later dates. The ECB shall have the full right to hold and manage the foreign reserves that are transferred to it and to use them for the purposes set out in this Statute. 30.2. The contributions of each national central bank shall be fixed in proportion to its share in the subscribed capital of the ECB. 30.3. Each national central bank shall be credited by the ECB with a claim equivalent to its contribution. The Governing Council shall determine the denomination and remuneration of such claims. 30.4. Further calls of foreign reserve assets beyond the limit set in Article 30.1. may be effected by the ECB, in accordance with Article 30.2, within the limits and under the conditions set by the Council in accordance with the procedure laid down in Article 42. 30.5. The ECB may hold and manage IMF reserve positions and SDRs and provide for the pooling of such assets. 30.6. The Governing Council shall take all other measures necessary for the application of this Article. ARTICLE 31 Foreign reserve assets held by national central banks 31.1. The national central banks shall be allowed to perform transactions in fulfilment of their obligations towards international organizations in accordance with Article 23. 31.2. All other operations in foreign reserve assets remaining with the national central banks after the transfers referred to in Article 30, and Member States' transactions with their foreign exchange working balances shall, above a certain limit to be established within the framework of Article 31.3, be subject to approval by the ECB in order to ensure consistency with the exchange rate and monetary policies of the Community. 31.3. The Governing Council shall issue guidelines with a view to facilitating such operations. ARTICLE 32 Allocation of monetary income of national central banks. 32.1. The income accruing to the national central banks in the performance of the ESCB's monetary policy function (hereinafter referred to as "monetary income") shall be allocated at the end of each financial year in accordance with the provisions of this Article. 32.2. Subject to Article 32.3, the amount of each national central bank's monetary income shall be equal to its annual income derived from its assets held against notes in circulation and deposit liabilities to credit institutions. These assets shall be earmarked by national central banks in accordance with guidelines to be established by the Governing Council. 32.3. If, after the start of the third stage, the balance sheet structures of the national central banks do not, in the judgment of the Governing Council, permit the application of Article 32.2, the Governing Council, acting by a qualified majority, may decide that, by way of derogation form Article 32.2, monetary income shall be measured according to an alternative method for a period of not more than five years. 32.4. The amount of each national central bank's monetary income shall be reduced by an amount equivalent to any interest paid by that central bank on its deposit liabilities to credit institutions in accordance with Article 19. The Governing Council may decide that national central banks shall be indemnified against costs incurred in connection with the issue of bank notes or in exceptional circumstances for specific losses arising from monetary policy operations undertaken for the ESCB. Indemnification shall be in a form deemed appropriate in the judgment of the Governing Council; these amounts may be offset against the national central banks' monetary income. 32.5. The sum of the national central banks' monetary income shall be allocated to the national central banks in proportion to their paid-up shares in the capital of the ECB, subject to any decision taken by the Governing Council pursuant to Article 33.2. 32.6. The clearing and settlement of the balances arising from the allocation of monetary income shall be carried out by the ECB in accordance with guidelines established by the Governing Council. 32.7. The Governing Council shall take all other measures necessary for the application of this Article. ARTICLE 33 Allocation of net profits and losses of the ECB 33.1. The net profit of the ECB shall be transferred in the following order: (a) an amount to be determined by the Governing Council, which may not exceed 20% of the net profit, shall be transferred to the general reserve fund subject to a limit equal to a 100% of the capital; (b) the remaining net profit shall be distributed to the shareholders of the ECB in proportion to their paid-up shares. 33.2. In the event of a loss incurred by the ECB, the shortfall may be offset against the general reserve fund of the ECB and, if necessary, following a decision by the Governing Council, against the monetary income of the relevant financial year in proportion and up to the amounts allocated to the national central banks in accordance with Article 32.5.

CHAPTER VII GENERAL PROVISIONS ARTICLE 34 Legal acts 34.1. In accordance with Article 108a of this Treaty, the ECB shall: - make regulations to the extent necessary to implement the tasks defined in Article 3.1., first indent, Articles 19.1, 22 or 25.2 and in cases which shall be laid down in the acts of the Council referred to in Article 42; - take decisions necessary for carrying out the tasks entrusted to the ESCB under this Treaty and this Statute; - make recommendations and deliver opinions. 34.2. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States. Recommendations and opinions shall have no binding force. A decision shall be binding in its entirety upon those to whom it is addressed. Articles 190 to 192 of this Treaty shall apply to regulations and decisions adopted by the ECB. The ECB may decide to publish its decisions, recommendations and opinions. 34.3. Within the limits and under the conditions adopted by the Council under the procedure laid down in Article 42, the ECB shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions. ARTICLE 35 Judicial control and related matters 35.1. The acts or omissions of the ECB shall be open to review or interpretation by the Court of Justice in the cases and under the conditions laid down in this Treaty. The ECB may institute proceedings in the cases and under the conditions laid down in this Treaty. 35.2. Disputes between the ECB, on the one hand, and its creditors, debtors or any other person, on the other, shall be decided by the competent national courts, save where jurisdiction has been conferred upon the Court of Justice. 35.3. The ECB shall be subject to the liability regime provided for in Article 215 of this Treaty. The national central banks shall be liable according to their respective national laws. 35.4. The Court of Justice shall have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the ECB, whether that contract be governed by public or private law. 35.5. A decision of the ECB to bring an action before the Court of Justice shall be taken by the Governing Council. 35.6. The Court of Justice shall have jurisdiction in disputes concerning the fulfillment by a national central bank of obligations under this Statute. If the ECB considers that a national central bank has failed to fulfill an obligation under this Statute, it shall deliver a reasoned opinion on the matter after giving the national central bank concerned the opportunity to submit its observations. If the national central bank concerned does not comply with the opinion within the period laid down by the ECB, the latter may bring the matter before the Court of Justice. ARTICLE 36 Staff 36.1. The Governing Council, on a proposal from the Executive Board, shall lay down the conditions of employment of the staff of the ECB. 36.2. The Court of Justice shall have jurisdiction in any dispute between the ECB and its servants within the limits and under the conditions laid down in the conditions of employment. ARTICLE 37 Seat Before the end of 1992, the decision as to where the seat of the ECB will be established shall be taken by common accord of the governments of the Member States at the level of Heads of State or of Government. ARTICLE 38 Professional secrecy 38.1. Members of the governing bodies and the staff of the ECB and the national central banks shall be required, even after their duties have ceased, not to disclose information of the kind covered by the obligation of professional secrecy. 38.2. Persons having access to data covered by Community legislation imposing an obligation of secrecy shall be subject to such legislation. ARTICLE 39 Signatories The ECB shall be legally committed to third parties by the President or by two members of the Executive Board or by the signatures of two members of the staff of the ECB who have been duly authorized by the President to sign on behalf of the ECB. ARTICLE 40 Privileges and immunities. The ECB shall enjoy in the territories of the Member States such privileges and immunities as are necessary for the performance of its tasks, under the conditions laid down in the Protocol on the Privileges and Immunities of the European Communities annexed to the Treaty establishing a Single Council and a Single Commission of the European Communities.

CHAPTER VIII AMENDMENT OF THE STATUTE AND COMPLEMENTARY LEGISLATION ARTICLE 41 Simplified amendment procedure 41.1. In accordance with Article 106(5) of this Treaty, Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of this Statute may be amended by the Council, acting either by a qualified majority on a recommendation from the ECB and after consulting the Commission, or unanimously on a proposal from the Commission and after consulting the ECB. In either case the assent of the European Parliament shall be required. 41.2. A recommendation made by the ECB under this Article shall require a unanimous decision by the Governing Council. ARTICLE 42 Complementary legislation In accordance with Article 106(6) of this Treaty, immediately after the decision on the date for the beginning of the third stage, the Council, acting by a qualified majority either on a proposal from the Commission and after consulting the European Parliament and the ECB or on a recommendation from the ECB and after consulting the European Parliament and the Commission, shall adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4, and 34.3. of this Statute.

CHAPTER IX TRANSITIONAL AND OTHER PROVISIONS FOR THE ESCB ARTICLE 43 General Provisions 43.1. A derogation as referred to in Article 109k(1) of this Treaty shall entail that the following Articles of this Statue shall not confer any rights or impose any obligations on the Member State concerned: 3, 6, 9.2, 12.1, 14.3, 16, 18, 19, 20, 22, 23, 26.2, 27, 30, 31, 32, 33, 34, 50 and 52. 43.2. The central banks of Member States with derogation as specified in Article 109k(1) of this Treaty shall retain their powers in the field of monetary policy according to national law. 43.3. In accordance with Article 109k(4) of this Treaty, "Member States" shall be read as "Member States without derogation" in the following Articles of this Statute: 3, 11.2, 19, 34.2 and 50. 43.4 "National central banks" shall be read as central banks of Member States without a derogation" in the following Articles of this Statute: 9.2, 10.1, 10.3, 12.1, 16, 17, 18, 22, 23, 27, 30, 31, 32, 33.2 and 52. 43.5. "Shareholders" shall be read as "central banks of Member States without a derogation" in Articles 10.3 and 33.1. 43.6. "Subscribed capital of the ECB" shall be read as "capital of the ECB subscribed by the central banks of Member States without a derogation" in Articles 10.3 and 30.2. ARTICLE 44 Transitional tasks of the ECB The ECB shall take over those tasks of the EMI which, because of the derogations of one or more Member States, still have to be performed in the third stage. The ECB shall give advice in the preparations for the abrogation of the derogations specified in Article 109k of this Treaty. ARTICLE 45 The General Council of the ECB 45.1. Without prejudice to Article 106(3) of this Treaty, the General Council shall be constituted as a third decision-making body of the ECB. 45.2. The General Council shall compromise the President and Vice- President of the ECB and the Governors of the national central banks. The others members of the Executive Board may participate, without having the right to vote, in meetings of the General Council. 45.3. The responsibilities of the General Council are listed in full in Article 47 of this Statute. ARTICLE 46 Rules of procedure of the General Council 46.1. The President or, in his absence, the Vice-President of the ECB shall chair the General Council of the ECB. 46.2. The President of the Council and a member of the Commission may participate, without having to right to vote, meetings of the General Council. 46.3. The President shall prepare the meetings of the General Council. 46.4. By way of derogation from Article 12.3, the General Council shall adopt its Rules of Procedure. 46.5. The Secretariat of the General Council shall be provided by the ECB. ARTICLE 47 Responsibilities of the General Council 47.1. The General Council shall: - perform the tasks referred to in Article 44; - contribute to the advisory functions referred to in Articles 4 and 25.1. 47.2. The General Council shall contribute to: - the collection of statistical information as referred to in Article 5; - the reporting activities of the ECB as referred to in Article 15; - the establishment of the necessary rules for the application of Article 26 as referred to in Article 26.4; - the taking of all other measures necessary for the application of Article 29 as referred to Article 29.4; - the laying down of the conditions of employment of the staff of the ECB as referred to in Article 36. 47.3. The General Council shall contribute to the necessary preparations for irrevocably fixing the exchange rates of the currencies of Member States with a derogations against the currencies, or the single currency, of the Member States without a derogation, as referred to in Article 109(5) of this Treaty. 47.4. The General Council shall be informed by the President of the ECB of decisions of the Governing Council. ARTICLE 48 Transitional provisions for the capital of the ECB In accordance with Article 29.1 each national central bank shall be assigned a weighting in the key for subscription of the ECB's capital. By way of derogation from Article 28.3, central banks of Member States with a derogation shall not pay up their subscribed capital unless the General Council, acting by as majority representing at least two thirds of the subscribed capital of the ECB and at least half of the shareholders, decides that a minimal percentage has to be paid up as a contribution to the operational costs of the ECB. ARTICLE 49 Deferred payment of capital, reserves and provisions of the ECB 49.1. The central bank of a Member State whose derogation has been abrogated shall pay up its subscribed share of the capital of the ECB to the same extent as the central banks of other Member States without a derogation, and shall transfer to the ECB foreign reserve assets in accordance with Article 30.1. The sum to be transferred shall be determined by multiplying the ECU value at current exchange rates of the foreign reserve assets which have already been transferred to the ECB in accordance with Article 30.1, by the ratio between the number of shares subscribed by the national central bank concerned and the number of shares already paid up by the other national central banks. 49.2. In addition to the payment to be made in accordance with Article 49.1, the central bank concerned shall contribute to the reserves of the ECB, to those provisions equivalent to reserves, and to the amount still to be appropriated to the reserves and provisions corresponding to the balance of the profit and loss account as at 31 December of the year prior to the abrogation of the derogation. The sum to be contributed shall be determined by multiplying the amount of the reserves, as defined above and as stated in the approved balance sheet of the ECB, by the ratio between the number of shares subscribed by the central bank concerned and the number of shares already paid up the other central banks. ARTICLE 50 Initial appointment of the members of the Executive Board. When the Executive Board of the ECB is being established, the President, the Vice-President and the other members of the Executive Board shall be appointed by common accord of the governments of the Member States at the level of Heads of State or of Government, on a recommendation from the Council and after consulting the European Parliament and the Council of the EMI. The President of the Executive Board shall be appointed for 8 years. By way of derogation from Article 11.2, the Vice-President shall be appointed for 4 years and the other members of the Executive Board for terms of office of between 5 and 8 years. No term of office shall be renewable. The number of members of the Executive Board may be smaller than provided for in Article 11.1, but in no circumstance shall it be less than four. ARTICLE 51 Derogation from Article 32 51.1. If, after the start of the third stage, the Governing Council decides that the application of Article 32 results in significant changes in national central banks' relative income positions, the amount of income to allocated pursuant to Article 32 shall be reduced by a uniform percentage which shall not exceed 60% in the first financial year after the start of the third stage and which shall decrease by at least 12 percentage points in each subsequent financial year. 51.2. Article 51.1. shall be applicable for not more than five financial years after the start of the third stage. ARTICLE 52 Exchange of bank notes in Community currencies. Following the irrevocable fixing of exchange rates, the Governing Council shall take the necessary measures to ensure that bank notes denominated in currencies with irrevocably fixed exchange rates are exchanged by the national central banks at their respective par values. ARTICLE 53 Applicability of the transitional provisions If and as long as there are Member States with a derogation Articles 43 to 48 shall be applicable.

PROTOCOL ON THE STATUTE OF THE EUROPEAN MONETARY INSTITUTE THE HIGH CONTRACTING PARTIES, DESIRING to lay down the Statute of the European Monetary Institute, HAVE AGREED upon the following provisions, which shall be annexed to the Treaty establishing the European Community: ARTICLE 1 Constitution and name 1.1. The European Monetary Institute (EMI) shall be established in accordance with Article 109f of this Treaty; it shall perform its functions and carry out its activities in accordance with the provisions of this Treaty and of this Statute. 1.2. The members of the EMI shall be the central banks of the Member States ("national central banks"). For the purposes of the Statute, the Institut monetaire luxembourgeois shall be regarded as the central bank of Luxembourg. 1.3. Pursuant to Article 109f of this Treaty, both the Committee of Governors and the European Monetary Co-operation Fund (EMCF) shall be dissolved. All assets and liabilities of the EMCF shall pass automatically to the EMI. ARTICLE 2 Objectives The EMI shall contribute to the realization of the conditions necessary for the transition to the third stage of Economic and Monetary Union, in particular by: - strengthening the co-ordination of monetary policies with a view to ensuring price stability; - making the preparations required for the establishment of the European System of Central Banks (ESCB), and for the conduct of a single monetary policy and the creation of a single currency in the third stage; - overseeing the development of the ECU. ARTICLE 3 General principles 3.1. The EMI shall carry out the tasks and functions conferred upon it by this Treaty and this Statute without prejudice to the responsibility of the competent authorities for the conduct of the monetary policy within the respective Member States. 3.2. The EMI shall act in accordance with the objectives and principles stated in Article 2 of the Statute of the ESCB. ARTICLE 4 Primary tasks 4.1. In accordance with Article 109f(2) of this Treaty, the EMI shall: - strengthen co-operation between the national central banks; - strengthen the co-ordination of the monetary policies of the Member States with the aim of ensuring price stability; - monitor the functioning of the European Monetary System (EMS); - hold consultations concerning issues falling within the competence of the national central banks and affecting the stability of financial institutions and markets; - take over the tasks of the EMCF; in particular it shall perform the functions referred to in Articles 6.1, 6.2 and 6.3; - facilitate the use of the ECU and oversee its development, including the smooth functioning of the ECU clearing system. The EMI shall also: - hold regular consultations concerning the course of monetary policies and the use of monetary policy instruments; - normally be consulted by the national monetary authorities before they take decisions on the course of monetary policy in the context of the common framework for ex ante co-ordination. 4.2. At the latest by 31 December 1996, the EMI shall specify the regulatory, organizational and logistical framework necessary for the ESCB to perform its tasks in the third stage, in accordance with the principle of an open market economy with free competition. This framework shall be submitted by the Council of the EMI for decision to the ECB at the date of its establishment. In accordance with Article 109f(3) of this Treaty, the EMI shall in particular: - prepare the instruments and the procedures necessary for carrying out a single monetary policy in the third stage; - promote the harmonization, where necessary, of the rules and practices governing the collection, compilation and distribution of statistics in the areas within its field of competence; - prepare the rules for operations to be undertaken by the national central banks in the framework of the ESCB; - promote the efficiency of cross-border payments; - supervise the technical preparation of ECU bank notes. ARTICLE 5 Advisory functions. 5.1. In accordance with Article 109f(4) of this Treaty, the Council of the EMI may formulate opinions or recommendations on the overall orientation of monetary policy and exchange rate policy as well as on related measures introduced in each Member State. The EMI may submit opinions or recommendations to governments and to the Council on policies which might affect the internal or external monetary situation in the Community and, in particular, the functioning of the EMS. 5.2. The Council of the EMI may also make recommendations to the monetary authorities of the Member States concerning the conduct of their monetary policy. 5.3. In accordance with Article 109f(6) of this Treaty, the EMI shall be consulted by the Council regarding any proposed Community act within its field of competence. Within the limits and under the conditions set out by the Council acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament and the EMI shall be consulted by the authorities of the Member States on any draft legislative provision within its field of competence, in particular with regard to Article 4.2. 5.4. In accordance with Article 109f(5) of this Treaty, the EMI may decide to publish its opinions and its recommendations. ARTICLE 6 Operational and technical functions 6.1. The EMI shall; - provide for the multilateralization of positions resulting from interventions by the national central banks in Community currencies and the multilateralization of intra-Community settlements; - administer the very short-term financing mechanism provided for by the Agreement of 13 March 1979 between the central banks of the Member States of the European Economic Community laying down the operating procedures for the European Monetary System (hereinafter referred to as "EMS Agreement") and the short-term monetary support mechanism provided for in the Agreement between the central banks of the Member States of the European Economic Community of 9 February 1970, as amended; - perform the functions referred to in Article 11 of Council Regulation (EEC) No 1969/88 of 24 June 1988 establishing a single facility providing medium-term financial assistance for Member States' balances of payments. 6.2. The EMI may receive monetary reserves from the national central banks and issue ECUs against such assets for the purpose of implementing the EMS Agreement. These ECUs may be used by the EMI and the national central banks as a means of settlement and for transactions between them and the EMI. The EMI shall take the necessary administrative measures for the implementation of this paragraph. 6.3. The EMI may grant to the monetary authorities of third countries and to international monetary institutions the status of "Other Holders" of ECUs and fix the terms and conditions under which such ECUs may be acquired, held or used by Other Holders. 6.4. The EMI shall be entitled to hold and manage foreign exchange reserves as an agent for and at the request of national central banks. Profits and losses regarding these reserves shall be for the account of the national central bank depositing the reserves. The EMI shall perform this function on the basis of bilateral contracts in accordance with rules laid down in a decision of the EMI. These rules shall ensure that transactions with these reserves shall not interfere with the monetary policy and exchange rate policy of the competent monetary authority of any Member State and shall be consistent with the objectives of the EMI and the proper functioning of the Exchange Rate Mechanism of the EMS. ARTICLE 7 Other tasks 7.1. Once a year the EMI shall address a report to the Council on the state of the preparations for the third stage. These reports shall include an assessment of the progress towards convergence in the Community, and cover in particular the adaptation of monetary policy instruments and the preparation of the procedures necessary for carrying out a single monetary policy in the third stage, as well as the statutory requirements to be fulfilled for national central banks to become an integral part of the ESCB. 7.2. In accordance with the Council decisions referred to in Article 109f(7) of this Treaty, the EMI may perform other tasks for the preparation of the third stage. ARTICLE 8 Independence The members of the Council of the EMI who are the representatives of their institutions shall, with respect to their activities, act according to their own responsibilities. In exercising the powers and performing the tasks and duties conferred upon them by this Treaty and this Statute, the Council of the EMI may not seek or take any instructions from Community institutions or bodies or governments of Member States.The Community institutions and bodies as well as the governments of the Member States undertake to respect this principle and not seek to influence the Council of the EMI in the performance of its tasks. ARTICLE 9 Administration 9.1. In accordance with Article 109f(1) of this Treaty, the EMI shall be directed and managed by the Council of the EMI. 9.2. The Council of the EMI shall consist of a President and the Governors of the national central banks, on of whom shall be Vice- President. If a Governor is prevented from attending a meeting, he may nominate another representative of his institution. 9.3. The President shall be appointed by common accord of the governments of the Member States at the level of Heads of State or of Government, on a recommendation from, as the case may be, the Committee of Governors or the Council of the EMI, and after consulting the European Parliament and the Council. The President shall be selected from among persons of recognized standing and professional experience in monetary or banking matters. Only nationals of Member States may be President of the EMI. The Council of the EMI shall appoint the Vice-President. The President and Vice- President shall be appointed for a period of three years. 9.4. The President shall perform his duties on a full-time basis. He shall not engage in any occupation, whether gainful or not, unless exemption is exceptionally granted by the Council of the EMI. 9.5. The President shall - prepare and chair meetings of the Council of the EMI; - without prejudice to Article 22, present the views of the EMI externally; - be responsible for the day-to-day management of the EMI. In the absence of the President, his duties shall be performed by the Vice-President. 9.6. The terms and conditions of employment of the President, in particular his salary, pension and other social security benefits, shall be the subject of a contract with the EMI and shall be fixed by the Council of the EMI on a proposal from a Committee comprising three members appointed by the Committee of Governors or the Council of the EMI, as the case may be, and three members appointed by the Council. The President shall not have the right to vote on matters referred to in this paragraph. 9.7. If the President no longer fulfils the conditions required for the performance of his duties or if he has been guilty of serious misconduct, the Court of Justice may, on application by the Council of the EMI, compulsorily retire him. 9.8. The Rules of Procedure of the EMI shall be adopted by the Council of the EMI. ARTICLE 10 Meetings of the Council of the EMI and voting procedures 10.1 The Council of the EMI shall meet at least ten times a year. The proceedings of Council meetings shall be confidential. The Council of the EMI may, acting unanimously, decide to make the outcome of its deliberations public. 10.2. Each member of the Council of the EMI or his nominee shall have one vote. 10.3. Save as otherwise provided for in this Statute, the Council of the EMI shall act by a simple majority of its members. 10.4. Decisions to be taken in the context of Articles 4.2, 5.4, 6.2, and 6.3 shall require unanimity of the members of the Council of the EMI. The adoption of opinions and recommendations under Articles 5.1 and 5.2, the adoption of decisions under Articles 6.4, 16 and 23.6 and the adoption of guidelines under Article 15.3 shall require a qualified majority of two thirds of the members of the Council of the EMI. ARTICLE 11 Interinstitutional co-operation and reporting requirements 11.1 The President of the Council and a member of the Commission may participate, without having the right to vote, in meetings of the Council of the EMI. 11.2. The President of the EMI shall be invited to participate in Council meetings when the Council is discussing matters relating to the objectives and tasks of the EMI. 11.3. At a date to be established in the Rules of Procedure, the EMI shall prepare an annual report on its activities and on monetary and financial conditions in the Community. The annual report, together with the annual accounts of the EMI, shall be addressed to the European Parliament, the Council and the Commission and also to the European Council. The President of the EMI may, at the request of the European Parliament or on his own initiative, be heard by the competent Committees of the European Parliament. 11.4. Reports published by the EMI shall be made available to interested parties free of charge. ARTICLE 12 Currency denomination The operations of the EMI shall be expressed in ECUs. ARTICLE 13 Seat Before the end of 1992, the decision as to where the seat of the EMI will be established shall be taken by common accord of the governments of the Member States at the level of Heads of State or of Government. ARTICLE 14 Legal capacity The EMI, which in accordance with Article 109f(1) of this Treaty shall have legal personality, shall enjoy in each of the Member States the most extensive legal capacity accorded to legal persons under their law; it may, in particular, acquire or dispose of movable or immovable property and may be a party to legal proceedings. ARTICLE 15 Legal acts. 15.1. In the performance of its tasks, and under the conditions laid down in this Statute, the EMI shall: - deliver opinions - make recommendations; - adopt guidelines, and take decisions, which shall be addressed to the national central banks. 15.2. Opinions and recommendations of the EMI shall have no binding force 15.3. The Council of the EMI may adopt guidelines laying down the methods for the implementation of the conditions necessary for the ESCB to perform its functions in the third stage. EMI guidelines shall have no binding force; they shall be submitted for decision to the ECB. 15.4. Without prejudice to Article 3.1, a decision of the EMI shall be binding in its entirety upon those to whom it is addressed. Articles 190 and 191 of this Treaty shall apply to these decisions. ARTICLE 16 Financial resources. 16.1. The EMI shall be endowed with its own resources. The size of the resources of the EMI shall be determined by the Council of the EMI with a view to ensuring the income deemed necessary to cover the administrative expenditure incurred in the performance of the tasks and functions of the EMI. 16.2. The resources of the EMI determined in accordance with Article 16.1 shall be provided out of contributions by the national central banks in accordance with the key referred to in Article 29.1 of the Statute of the ESCB and be paid up at the establishment of the EMI. For this purpose, the statistical data to be used for the determination of the key shall be provided by the Commission, in accordance with the rules adopted by the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament, the Committee of Governors and the Committee referred to in Article 109c of this Treaty. 16.3. The Council of the EMI shall determine the form in which contributions shall be paid up. ARTICLE 17 Annual accounts and auditing 17.1. The financial year of the EMI shall begin on the first day of January and end on the last day of December. 17.2. The Council of the EMI shall adopt an annual budget before the beginning of each financial year. 17.3. The annual accounts shall be drawn up in accordance with the principles established by the Council of the EMI. The annual accounts shall be approved by the Council of the EMI and shall thereafter be published. 17.4. The annual accounts shall be audited by independent external auditors approved by the Council of the EMI. The auditors shall have full power to examine all books and accounts of the EMI and to obtain full information about its transactions. The provisions of Article 188c of this Treaty shall only apply to an examination of the operational efficiency of the management of the EMI. 17.5. Any surplus of the EMI shall be transferred in the following order (a) an amount to be determined by the Council of the EMI shall be transferred to the general reserve fund of the EMI. (b) any remaining surplus shall be distributed to the national central banks in accordance with the key referred to in Article 16.2. 17.6. In the event of a loss incurred by the EMI, the shortfall shall be offset against the general reserve fund of the EMI. Any remaining shortfall shall be made good by contributions from the national central banks, in accordance with the key as referred to in Article 16.2. ARTICLE 18 Staff 18.1. The Council of the EMI shall lay down the conditions of employment of the staff of the EMI. 18.2. The Court of Justice shall have jurisdiction in any dispute between the EMI and its servants within the limits and under the conditions laid down in the conditions of employment. ARTICLE 19 Judicial control and related matters. 19.1. The acts or omissions of the EMI shall be open to review or interpretation by the Court of Justice in the cases and under the conditions laid down in this Treaty. The EMI may institute proceedings in the cases and under the conditions laid down in this Treaty. 19.2. Disputes between the EMI, on the one hand, and its creditors, debtors or any other person, on the other, shall fall within the jurisdiction of the competent national courts, save where jurisdiction has been conferred upon the Court of Justice. 19.3. The EMI shall be subject to the liability regime provided for in Article 215 of this Treaty. 19.4. The Court of Justice shall have jurisdiction to give judgment pursuant to any arbitration clause contained in a contract concluded by or on behalf of the EMI, whether that contract be governed by public or private law. 19.5. A decision of the EMI to bring an action before the Court of Justice shall be taken by the Council of the EMI. ARTICLE 20 Professional Secrecy 20.1. Members of the Council of the EMI and the staff of the EMI shall be required, even after their duties have ceased, not to disclose information of the kind covered by the obligation of professional secrecy. 20.2. Persons having access to data covered by Community legislation imposing and obligation of secrecy shall be subject to such legislation. ARTICLE 21 Privileges and immunities The EMI shall enjoy in the territories of the Member States such privileges and immunities as are necessary for the performance of its tasks, under the conditions laid down in the Protocol on the Privileges and Immunities of the European Communities annexed to the Treaty establishing a Single Council and a Single Commission of the European Communities. ARTICLE 22 Signatories The EMI shall be legally committed to third parties by the President or the Vice-President or by the signatures of two members of the staff of the EMI who have been duly authorized by the President to sign on behalf of the EMI. ARTICLE 23 Liquidation of the EMI 23.1. In accordance with Article 109l of this Treaty, the EMI shall go into liquidation on the establishment of the ECB. All assets and liabilities of the EMI shall then pass automatically to the ECB. The latter shall liquidate the EMI according to the provisions of this Article. The liquidation shall be completed by the beginning of the third stage. 23.2. The mechanism for the creation of ECUs against gold and US dollars as provided for by Article 17 of the EMS agreement shall be unwound by the first day of the third stage in accordance with Article 20 of the said Agreement. 23.3. All claims and liabilities arising from the very short-term financing mechanism and the short-term monetary support mechanism, under the Agreements referred to in Article 6.1, shall be settled by the first day of the third stage. 23.4. All remaining assets of the EMI shall be disposed of and all remaining liabilities of the EMI shall be settled. 23.5. The proceeds of the liquidation described in Article 23.4. shall be distributed to the national central banks in accordance with the key referred to in Article 16.2 23.6. The Council of the EMI may take the measures necessary for the application of Articles 23.4. and 23.5. 23.7. Upon the establishment of the ECB, the President of the EMI shall relinquish his office.

PROTOCOL ON THE EXCESSIVE DEFICIT PROCEDURE THE HIGH CONTRACTING PARTIES DESIRING to lay down the details of the excessive deficit procedure referred to in Article 104c of the treaty establishing the European Community, HAVE AGREED upon the following provisions, which shall be annexed to the Treaty establishing the European Community: ARTICLE 1 The reference values referred to in Article 104c(2) of this Treaty are: - 3% for the ratio of the planned or actual government deficit to gross domestic product at market prices; - 60% for the ratio of government debt to gross domestic product at market prices. ARTICLE 2 In Article 104c of this Treaty and in this Protocol: - government means general government, that is central government, regional or local government and social security funds, to the exclusion of commercial operations, as defined in the European System of Integrated Economic Accounts; - deficit means net borrowing as defined in the European System of Integrated Economic Accounts; - investment means gross fixed capital formation as defined in the European System of Integrated Economic Accounts; - debt means total gross debt at nominal value outstanding at the end of the year and consolidated between and within the sectors of general government as defined in the first indent. ARTICLE 3 In order to ensure the effectiveness of the excessive deficit procedure, the governments of the Member States shall be responsible under this procedure for the deficits of general government as defined in the first indent of Article 2. The Member States shall ensure that national procedures in the Budgetary area enable them to meet their obligations in this area deriving from this Treaty. The Member States shall report their planned and actual deficits and the levels of their debt promptly and regularly to the Commission. ARTICLE 4. The statistical data to be used for the application of this Protocol shall be provided by the Commission.

PROTOCOL ON THE CONVERGENCE CRITERIA REFERRED TO IN ARTICLE 109j OF THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY THE HIGH CONTRACTING PARTIES, DESIRING to lay down the details of the convergence criteria which shall guide the Community in taking decisions on the passage to the third stage of economic and monetary union, referred to in Article 109j(1) of this Treaty, HAVE AGREED upon the following provisions, which shall be annexed to the Treaty establishing the European Community: ARTICLE 1 The criterion on price stability referred to in the first indent of Article 109j(1) of this Treaty shall mean that a Member State has a price performance that is sustainable and an average rate of inflation, observed over a period of one year before the examination, that does not exceed by more than 1 1/2 percentage points that of, at most, the three best performing Member States in terms of price stability. Inflation shall be measured by means of the consumer price index on a comparable basis, taking into account differences in national definitions. ARTICLE 2 The criterion on the government budgetary position referred to in the second indent of Article 109j(1) of this treaty shall mean that at the time of the examination the Member State is not the subject of a Council decision under Article 104c(6) of this Treaty that an excessive deficit exists. ARTICLE 3 The criterion on participation in the Exchange Rate mechanism of the European Monetary System referred to in the third indent of Article 109j(1) of this Treaty shall mean that a Member State has respected the normal fluctuation margins provided for by the Exchange Rate Mechanism of the European Monetary System without severe tensions for at least the last two years before the examination. In particular, the Member State shall not have devalued its currency's bilateral central rate against any other Member State's currency on its own initiative for the same period. ARTICLE 4 The criterion on the convergence of interest rates referred to in the fourth indent of Article 109j(1) of this Treaty shall mean that, observed over a period of one year before the examination, a Member State has had an average nominal long-term interest rate that does not exceed by more than 2 percentage points that of, at most, the three best performing Member States in terms of price stability. Interest rates shall be measured on the basis of long term government bonds or comparable securities, taking into account differences in national definitions. ARTICLE 5 The statistical data to be used for the application of this protocol shall be provided by the Commission. ARTICLE 6 The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament, the EMI or the ECB as the case may be, and the Committee referred to in Article 109c, adopt appropriate provisions to lay down the details of the convergence criteria referred to Article 109j of this Treaty, which shall then replace this Protocol.

PROTOCOL AMENDING THE PROTOCOL ON THE PRIVILEGES AND IMMUNITIES OF THE EUROPEAN COMMUNITIES THE HIGH CONTRACTING PARTIES, CONSIDERING that, in accordance with Article 40 of the Statute of the European Central Bank and Article 21 of the Statute of the European Monetary Institute, the European Central Bank and the European Monetary Institute shall enjoy in the territories of the Member States such privileges and immunities as are necessary for the performance of their tasks, HAVE AGREED upon the following provisions, which shall be annexed to the Treaty establishing the European Community: SOLE ARTICLE The Protocol on the Privileges and Immunities of the European Communities, annexed to the Treaty establishing a Single Council and a Single Commission of the European Communities, shall be supplemented by the following provisions: "Article 23 This Protocol shall also apply to the European Central Bank, to the members of its organs and to its staff, without prejudice to the provisions of the Protocol on the Statute of the European System of Central Banks and the European Central Bank. The European Central Bank shall, in addition, be exempt from any form of taxation or imposition of a like nature on the occasion of any increase in its capital and from the various formalities which may be connected therewith in the State where the bank has its seat. The activities of the Bank and of its organs carried on in accordance with the Statute of the European System of Central Banks and of the European Central Bank shall not be subject to any turnover tax. The above provisions shall also apply to the European Monetary Institute. Its dissolution or liquidation shall not give rise to any imposition."