26 Convergence Reports 2004
| (a)
(26061)
13910/04
+ ADD1
COM(04) 690
(b)
(26098)
13952/04
—
|
Commission Report: Convergence Report 2004
European Central Bank's convergence report 2004
|
| Legal base | — |
| Document originated | (a) 20 October 2004
|
| Deposited in Parliament | (a) 29 October 2004
(b) 5 November 2004
|
| Department | HM Treasury |
| Basis of consideration | EM of 22 November 2004
|
| Previous Committee Report | None
|
| To be discussed in Council | 7 December 2004
|
| Committee's assessment | Politically important
|
| Committee's decision | (Both) Cleared
|
Background
26.1 Both the Commission and the European Central Bank (ECB) are
required to provide the Council, at least every two years, with
reports on "Member States with a derogation" —
that is, those Member States (except Denmark and the UK) that
have not adopted the euro examining whether a high degree of sustainable
convergence has been achieved and assessing compliance with the
statutory requirements that national central banks need to fulfil
to become an integral part of the euro system (Denmark and the
UK, having negotiated opt-out arrangements, are not subject to
an assessment unless they indicate that they wish to participate
in the third stage of economic and monetary union, that is, move
towards adopting the euro).
The documents
26.2 The Commission and the ECB have taken the opportunity created
by the obligation to report again on Sweden and to make the first
reports on the ten new Member States.
26.3 The Commission and the ECB examine, for each
of the 11 Member States concerned, the compatibility of national
legislation with the Treaty provisions in relation to economic
and monetary union and with the statutes of the European System
of Central Banks and of the ECB. They consider in detailed technical
analyses whether a high degree of sustainable convergence has
been achieved with reference to four convergence criteria:
- price stability;
- the Government's budgetary position;
- exchange rate stability; and
- the long-term interest rate.
26.4 The Commission and the ECB agree that none of
the 11 Member States meet all four convergence criteria. Lithuania,
Slovenia and Sweden meet three, the Czech Republic, Estonia, Cyprus
and Latvia two, Malta and Slovakia one and Hungary and Poland
none.
The Government view
26.5 The Financial Secretary to the Treasury (Mr
Stephen Timms) tells us that these reports have no political or
financial implications — they are intended only to inform
the Council.
Conclusion
26.6 These reports provide background information
regarding the readiness of some Member States for adoption of
the euro. We clear the documents.
| 
