The European Central Bank (ECB) published a report that assesses the progress of seven European Union countries toward euro adoption. The report examines whether the national legislation is compatible with the European Union legal framework and whether the statutory requirements are fulfilled for the respective national central banks to become an integral part of the Eurosystem.
The seven member states being assessed are Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania, and Sweden. The assessment concludes that all the seven member states under review have made limited progress toward meeting the convergence criteria and apart from Croatia, none of the other countries under review complies with the economic convergence criteria. The report examined national legislation of each member state with a derogation (also referred to as "legal convergence") with an aim to facilitate the Council’s decisions on which member states fulfil their obligations regarding the achievement of economic and monetary union (Article 140(1) of the Treaty). The findings show that all countries, except Croatia, need to adjust their legal framework to comply with the requirements under the European Union law and address issues related to central bank independence, the prohibition on monetary financing, and legal integration into the Eurosystem. The report sets out following key conclusions with respect to individual member states:
- Bulgaria—The Law on Bulgarian National Bank does not comply with all the requirements for central bank independence, the monetary financing prohibition, and legal integration into the Eurosystem.
- Czech Republic—The Law on Czech National Bank, the Law on competences, and the Laws on management of crisis situations and on economic measures for crisis situations do not comply with all the requirements for central bank independence, the monetary financing prohibition and legal integration into the Eurosystem.
- Croatia—The Law on Croatian National Bank has been amended to reflect and implement recommendations made in the ECB Convergence Report dated June 2020. Consequently, the national legislation is consistent with the Treaty and the Statute.
- Hungary—The Fundamental Law of Hungary, the Law on the Magyar Nemzeti Bank (MNB), and the Law XXVII of 2008 do not comply with all the requirements for central bank independence, the prohibition on monetary financing, and legal integration into the Eurosystem. Also, other Hungarian legal acts do not comply with the requirements for the single spelling of the euro.
- Poland—The Polish Constitution, the Law on National Bank of Poland (NBP), and the Law on the State Tribunal do not comply with all the requirements of central bank independence, confidentiality, the monetary financing prohibition, and legal integration into the Eurosystem.
- Romania—The Law on National Bank of Romania does not comply with all the requirements for central bank independence, the monetary financing prohibition, and legal integration into the Eurosystem.
- Sweden—The Law on Central Bank of Sweden, the Swedish Instrument of Government, and the Law on exchange rate policy do not comply with all the requirements for central bank independence, the monetary financing prohibition, and legal integration into the Eurosystem.
Keywords: Europe, EU, Banking, Bulgaria, Czech Republic, Croatia, Hungary, Poland, Romania, Sweden, Central Bank Independence, Euro Adoption, Single Rulebook, Banking Union, Reporting, Basel, ECB
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