Brussels, 17/07/2009 (Agence Europe) - With Slovenia joining the euro on 1 January 2009, the single European currency is now the official currency of 16 EU member states. When it was set up in 1999, the euro became the official currency of three tiny European states that are not members of the EU, namely Monaco, San Marino and Vatican City. Ten years on, the European Commission has re-examined the monetary deals signed in 1999 in order to ensure legal continuity to the agreements between the tiny city states and EU member states - France in the case of Monaco (which used to use the French franc) and Italy for San Marino and Vatican City (which used to use the Italian lira). Under the currency deals, the euro became legal tender in these city states, which mint their own euro coins with their own design (other countries using the euro, like Montenegro, Kosovo and Andorra, do so informally without signing any official currency deals). In a statement adopted on 14 July 2009, upon request from the ECOFIN Council, the European Commission examines the application of the currency deals and suggests amendments.
The currency deals share common characteristics, but the deal signed with Monaco includes further restrictions, requiring Monaco to apply EU legislation to counter euro banknote and coin counterfeiting. The EU rules tend to be applied in all three states, but the obligation to transpose the rules into the city states' domestic legislation differs from country to country. The Commission says it would be better to have more uniform rules for the countries that have signed monetary deals with the EU, suggesting that Monaco should transpose existing EU banking and financial legislation, including all the updates and new rules in these domains (during a two year transition period).
Unlike the procedures included in the deal with Monaco, no measures are included in the deals with San Marino and Vatican City to monitor the agreements. In order for EU institutions to monitor application of the agreements, the European Commission therefore suggests setting up two joint committees (like the existing committee for Monaco) with the two city states in question. The new committees would include representatives of San Marino, Vatican City, Italy, the European Commission and the European Central Bank. They would meet at least once a year.
The EU has the option of launching infringement proceedings when a member state fails to meet its obligations, but the currency deals with the city states do not give the EU this option in the event of failing of comply with the agreements. The European Commission therefore suggests introducing the option of suspending the right to mint euro coins in the event of serious and persistent failure (lasting a couple of years, for example) to meet the obligations arising from the currency deals.
All three city states have thus far respected the upper limits on the issuing of euro coins. Monaco was allowed to issue up to one five hundredth of the quantity of euro coins minted by France, and minted coins worth a nominal value of €221,094 in 2009. The upper limits for San Marino and Vatican City are decided every two years in order to take account of changes in the consumer price indices in Italy. In 2009, Monaco minted coins to the value of €2,183,112 and Vatican City €1,074,000. The Commission would like to introduce a common calculation method for the upper limits for all city states that have signed a currency deal with the EU. The common method would ensure equal treatment and take account of demand from coin collectors in order to ensure that the euro coins actually circulate (rather than disappear into collectors' pockets), explains the Commission's report.
The Commission suggests that national mints in the eurozone should be able to bid to mint the euro coins of the three city states, which would be free to select a mint of their choice.
The Commission and France may be given a negotiating mandate to re-negotiate the currency deal with Monaco in association with the ECB. The deals with San Marino and Vatican City may be re-negotiated by the Commission and Italy in association with the ECB. (A.B./transl.fl)