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
Previous ArticleOSFI Updates Rules to Implement Final Basel III Reforms in Canada
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.
The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.