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Duisenberg - when shall he go? - EMUbusiness - Issue 24

25 July 2001, 19:20 CET


EMUbusiness - Issue 24
25 July 2001
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EMUbusiness top stories
=======================
1. Convert your bank account and win a car
2. Remember to file in euro in France in 2002
3. Germany to reassure countries to the east
4. Spain, Italy provide legal basis for pricing to six decimals
5. Spain's retail businesses promise price stability
6. Evidence that the euro is pushing German prices up?
7. Banks say payments price controls are contrary to free market principles
8. Price transparency's limited impact on car markets

Publisher's Note
================
So just what did Duisenberg say in 1998 about the length of his mandate? With speculation still rife about when and whether he will go and various heads of state and government giving various accounts of what was agreed inside the meeting room, it is perhaps worthwhile recalling once and for all what the official (and public) record says. "I will, in view of my age, not want to serve the full term. On the other hand it is my intention to stay at least to see through the transitional arrangements for the introduction of the euro notes and coins and the withdrawal
of the national notes and coins ... it is entirely of my own free will that I have decided not to serve the full term. Also in the future the decision to resign will be my decision alone."

So speculation that Duisenberg might go some time next year appears to be justified, but a promise it was not. Anyone interested in the full text can find it at ue.eu.int. It is incorporated in European Council press release as a statement Duisenberg read to the meeting. It was also read out by Duisenberg at the time to any of the press who cared to listen.

The real pressure over the question of a successor to Duisenberg comes from the fact that Otmar Issing was the only other Member of the Executive Board not appointed for a full term. The others were appointed for four, five, six and seven years, in order to avoid a wholesale changeover after eight years. The first whose mandate expires is Vice-President, Christian Noyer. He was appointed for only four years. What will France do if Noyer's term expires and Duisenberg shows no signs of resigning? Countries currently not represented on the Executive Board might feel their time had come, leaving France out in the cold, at least temporarily.

Regards,
Marion Bywater
Publisher, EMUbusiness
mailto:mbywater@eubusiness.com

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1. Convert your bank account and win a car
------------------------------------------
There are three station wagons to be won by retail customers of Italy's largest bank if they convert their bank account to euro before the end of October. Commemorative coin sets will go to the runners up.
Full story


2. Remember to file in euro in France in 2002
---------------------------------------------
The French tax authorities have issued a reminder that tax
returns must be filed in euro next year. France is the only country where this is the case. Elsewhere, they can be filed in the legacy currency if the 2001 accounts were kept in the legacy currency. The French tax authorities have also reiterated the rules they are applying to retroactive conversion of accounts after the start of a company's financial year. These are also different from those of some other countries.
Full story


3. Germany to reassure countries to the east
--------------------------------------------
Anyone in Turkey or eastern Europe who has a stock of
Deutschmark notes need not panic. This is the message from the Bundesbank, which has launched an information campaign to inform and reassure all those who hold some of the estimated 60-95 billion Deutschmark notes in circulation outside Germany.
Full story


4. Spain, Italy provide legal basis for pricing to six decimals
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Both Spain and Italy have recently published legislation
specifically authorising pricing to six decimal places when
converting prices to euro. This is not specifically forbidden by EU rules providing the end-price is rounded to the nearest cent, but both countries have preferred to spell this out in legislation. Italy's legislation applies only to gas and electricity pricing.
Full story


5. Spain's retail businesses promise price stability
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Spanish retail businesses have recently promised to keep prices stable over the changeover period at the end of this year. They have also joined a number of other sectors in promising to promote use of the euro from mid-September this year.
Full story


6. Evidence that the euro is pushing German prices up?
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German central bankers and trade associations are regularly
trying to reassure consumers that introduction of the euro will not lead to price increases, but there is now more than one study with evidence pointing in the other direction. A new study has found that in 100 of 116 cases of price increases in early summer, there are grounds for suspecting that a price increase is euro-related.
Full story


7. Banks say payments price controls are contrary to free market principles
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By calling for the price of cross-border payments in euro to be regulated, the European Commission is undermining its
credibility as the guardian of the free market, the uropean
Banking Federation has warned. On the eve of the decision by the Commission to propose a regulation to force the price of cross-border transactions in euro down to the level of domestic payments, the Federation wrote to every Member of the Commission to protest that such price regulation is unwarranted and counter-productive. The European Savings Banks Group had previously warned that it believes the Commission is attaching greater importance to an artificial political timetable than to quality.
Full story


8. Price transparency's limited impact on car markets
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Price transparency is still having a limited effect on euro-area car markets. While some manufacturers are clearly at pains to take the risks of price transparency into account, others still believe that there are high price markets of which they can take advantage.
Full story


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These articles are provided by Euro-impact. Euro-impact is a monthly newsletter on the regulatory, practical and strategic impacts of the euro for companies. Articles may be reproduced with acknowledgement of the source and Euro-impact. Every reasonable effort has been made to ensure the information is correct at the time of writing. Euro-impact.com
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SPONSOR'S MESSAGE
July 2001 highlights: Banks face regulation on low-value
payments; focusing on the withdrawal of cash; the relationship between credit ratings and euro preparation. The latest issue of the monthly newsletter on the impact of the euro can now be downloaded for GBP 55 + VAT.
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Other stories on EUbusiness in July
===================================

Industrial production down 0.1% in euro-zone
--------------------------------------------
Seasonally adjusted industrial production decreased by 0.1% in the euro-zone in May compared to April, according to Eurostat. The fall in May follows decreases of 0.7% in April and 0.3% in March.
Full story


EU inflation eases to 3.0 percent in June
-----------------------------------------
Euro-zone inflation on a 12-month basis stood at 3.0 percent in June, down from 3.4 percent the previous month, according to Eurostat.
Full story


Britain's Tories face Euro dilemma as they choose a leader
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The race to find a new leader for Britain's opposition Conservative Party has gained pace with a euro-friendly candidate squaring up against a euro-sceptic.
Full story


EU opens consultation on new securities law
-------------------------------------------
An open Internet consultation process has been launched by the Commission to gauge opinion of proposed changes to the
transparency obligations of issuers whose securities are traded on regulated markets. The consultation document provides first indications as to the possible future EU regime concerning disclosure obligations of securities issuers.
Full story

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This newsletter is produced in association with FEE, the
Federation des Experts Comptables Europeens. FEE is the
representative organisation for the accountancy profession in Europe. It is a "non profit" organisation which groups together 38 professional bodies from 26 countries, including all 15 Member States of the European Union and the 3 main member countries of EFTA.
FEE Euro Information Service
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Internet Monitor
================

Economic Papers No 156, July 2001
---------------------------------
Download the report on financial crisis management, a follow-up to the Economic and Financial Committee report on financial stability.


Economic Papers No 157, July 2001
---------------------------------
A study entitled 'EMU and asymetries in the monetary policy
transmission' which looks at research into this subject and
discusses the possible evolution of economic and financial
structures in EMU.


Monthly and quarterly notes on the euro-denominated bond markets
--------------------------------------------------------
This monthly note from the Commission's Economic and Financial Affairs DG on developments in the euro-denominated bond markets was updated on 20 July.


ECB money and bond market studies
---------------------------------
The European Central Bank has published two studies related to the euro area money and bond market and to surveys conducted in 1999 and 2000.


EMU diary
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22-23 September, Informal ECOFIN Council, Liege
16 October, ECOFIN Council, Luxembourg
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