The Treaty of the European Union The Maastricht Treaty, 7th February, 1992. Contributed by Neil McLachlan, nmclachlan@delphi. Com Note: In the Contents section, the short upper case headingof each chapter can be searched for, to jump to that chapter. CONTENTS HEADS Introduction of signatoriesTITLE1 Common ProvisionsTITLE2 Provisions Amending the Treaty Establishing the European Ecomonic Community with a View to Establishing the European CommunityTITLE3 Provisions Amending the Treaty Establishing the European Coal and Steel CommunityTITLE4 Provisions Amending the Treaty Establishing the European Atomic Energy CommunityTITLE5 Provisions on a Common Foreign & Security PolicyTITLE6 Provisions on Cooperation in the Fields of Justice & Home AffairsTITLE7 Final ProvisionsPROTOCO ProtocolsFINAL FINAL ACTMAY1_92 Declaration on Protocol No. 17, made on the 1st May 1992 HEADSTREATY ON EUROPEAN UNIONHIS MAJESTY THE KING OF THE BELGIANS, HER MAJESTY THE QUEEN OF DENMARK, THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY, THE PRESIDENT OF THE HELLENIC REPUBLIC, HIS MAJESTY THE KING OF SPAIN, THE PRESIDENT OF THE FRENCH REPUBLIC, THE PRESIDENT OF IRELAND, THE PRESIDENT OF THE ITALIAN REPUBLIC, HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG, HER MAJESTY THE QUEEN OF THE NETHERLANDS, THE PRESIDENT OF THE PORTUGUESE REPUBLIC, HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREATBRITAIN AND NORTHERN IRELAND RESOLVED to mark a new stage in the process of European integrationundertaken with the establishment of the European Communities, RECALLING the historic importance of the ending of the division of theEuropean continent and the need to create firm bases for theconstruction of the future Europe, CONFIRMING their attachment to the principles of liberty, democracyand respect for human rights and fundamental freedoms and of therule of law, DESIRING to deepen the solidarity between their peoples whilerespecting their history, their culture and their traditions, DESIRING to enhance further the democratic and efficient functioningof the institutions so as to enable them better to carry out, within asingle institutional framework, the tasks entrusted to them, RESOLVED to achieve the strengthening and the convergence of theireconomies and to establish an economic and monetary unionincluding, in accordance with the provisions of this Treaty, a singleand stable currency, DETERMINED to promote economic and social progress for theirpeoples, within the context of the accomplishment of the internalmarket and of reinforced cohesion and environmental protection, andto implement policies ensuring that advances in economic integrationare accompanied by parallel progress in other fields, RESOLVED to establish a citizenship common to the nationals of theircountries, RESOLVED to implement a common foreign and security policyincluding the eventual framing of a common defence policy, whichmight in time lead to a common defence, thereby reinforcing theEuropean identity and it independence in order to promote peace, security and progress in Europe and in the world, REAFFIRMING their objective to facilitate the free movement ofpersons while ensuring the safety and security of their peoples, byincluding provisions on justice and home affairs in this Treaty, RESOLVED to continue the process of creating an ever closer unionamong the peoples of Europe, in which decisions are taken as closelyas possible to the citizen in accordance with the principle ofsubsidiarity, IN VIEW of further steps to be taken in order to advance Europeanintegration, HAVE DECIDED to establish a European Union and to this end havedesignated as their plenipotentiaries: HIS MAJESTY THE KING OF THE BELGIANS:Mark EYSKENS, Minister for Foreign Affairs;Philippe MAYSTADT, Minister for Finance; HER MAJESTY THE QUEEN OF DENMARK:Uffe ELLEMNA-JENSEN, Minister for Foreign Affairs;Anders FOGH RASMUSSEN, Minister for Economic Affairs; THE PRESIDENT OF THE FEDERAL REPUBLIC OF GERMANY:Hans-Dietrich GENSCHER, Federal Minister for Foreign Affairs;Theodor WAIGEL, Federal Minister for Finance; THE PRESIDENT OF THE HELLENIC REPUBLIC:Antonios SAMARAS, Minister for Foreign Affairs;Efthymios CHRISTODOULOU, Minister for Economic Affairs; HIS MAJESTY THE KING OF SPAIN:Francisco FERNANDEZ ORDONEZ, Minister for Foreign Affairs;Carlos SOLCHAGA CATALAN, Minister for Economic Affairs andFinance; THE PRESIDENT OF THE FRENCH REPUBLIC:Rolan DUMAS, Minister for Foreign Affairs;Peirre BEREGOVY, Minister for Economic and Financial Affairs and theBudget; THE PRESIDENT OF IRELAND:Gerard COLLINS, Minister for Foreign Affairs;Berite AHERN, Minister for Finance; THE PRESIDENT OF THE ITALIAN REPUBLIC, Gianni DE MICHELIS, Minister for Foreign Affairs;Guido CARLI, Minister for the Treasury; HIS ROYAL HIGHNESS THE GRAND DUKE OF LUXEMBOURG:Jaques F. POOS, Deputy Prime Minister, Minister for Foreign Affairs;Jean-Claude JUNCKER, Minister for FINANCE; HER MAJESTY THE QUEEN OF THE NETHERLANDS:Hans van den BROEK, Minister for Foreign Affairs;Willem KOK, Minister for Finance; THE PRESIDENT OF THE PORTUGUESE REPUBLIC:Joao de DEUS PINHERO, Minister for Foreign Affairs;Jorge BRAG de MACEDO, Minister for Finance; HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREATBRITAIN AND NORTHERN IRELAND:The Rt. Hon. Douglas HURD, Secretary of State for Foreign andCommonwealth Affairs;The Hon. Francis MAUDE, Financial Secretary to the Treasury;WHO, having exchanged their full powers, found in good and due form, have agreed as follows: TITLE1COMMON PROVISIONS ARTICLE ABy this Treaty, the High Contracting Parties establish amongthemselves a European Union, hereinafter called "the Union". This Treaty marks a new stage in the process of creating an evercloser union among the peoples of Europe, in which decisions aretaken as closely as possible to the citizen. The Union shall be founded on the European Communities, supplemented by the policies and forms of cooperation established bythis Treaty. Its task shall be to organize, in a manner demonstratingconsistency and solidarity, relations between the Member States andbetween their peoples. ARTICLE BThe Union shall set itself the following objectives:- to promote economic and social progress which is balanced andsustainable, in particular through the creation of an area withoutinternal frontiers, through the strengthening of economic and socialcohesion and through the establishment of economic and monetaryunion, ultimately including a single currency in accordance with theprovisions of this Treaty;- to assert its identity on the international scene, in particular throughthe implementation of a common foreign and security policy includingthe eventual framing of a common defence policy, which might in timelead to a common defence;- to strengthen the protection of the rights and interests of thenationals of its Member States through the introduction of a citizenshipof the Union;- to develop close cooperation on justice and home affairs;- to maintain in full the "acquis communautaire" and build on it with aview to considering, through the procedure referred to in Article N(2), towhat extent the policies and forms of cooperation introduced by thisTreaty may need to be revised with the aim of ensuring theeffectiveness of the mechanisms and the institutions of theCommunity. The objectives of the Union shall be achieved as provided in thisTreaty and in accordance with the condition and the timetable set outtherein while respecting the principle of subsidiarity as defined inArticle 3b of the Treaty establishing the European Community. ARTICLE CThe Union shall be served by a single institutional framework whichshall ensure the consistency and the continuity of the activities carriedout in order to attain its objectives while respecting and building uponthe "acquis communautaire". The Union shall in particular ensure the consistency of its externalactivities as a whole in the context of its external relations, security, economic and development policies. The Council and the Commissionshall be responsible for ensuring such consistency. They shall ensurethe implementation of these policies, each in accordance with itsrespective powers. ARTICLE DThe European Council shall provide the Union with the necessaryimpetus for its development and shall define the general politicalguidelines thereof. The European Council shall bring together the Heads of State or ofGovernment of the Member States and the President of theCommission. They shall be assisted by the Ministers for ForeignAffairs of the Member States and by a Member of the Commission. TheEuropean Council shall meet at least twice a year, under thechairmanship of the Head of State or of Government of the MemberState which holds the Presidency of the Council. The European Council shall submit to the European Parliament areport after each of its meetings and a yearly written report on theprogress achieved by the Union. ARTICLE EThe European Parliament, the Council, the Commission and the Courtof Justice shall exercise their powers under the conditions and for thepurposes provided for, on the one hand, by the provisions of theTreaties establishing the European Communities and of thesubsequent Treaties and Acts modifying and supplementing them and, on the other hand, by the other provisions of this Treaty. ARTICLE F1. The Union shall respect the national identities of its Member States, whose systems of government are founded on the principles ofdemocracy. 2. The Union shall respect fundamental rights, as guaranteed by theEuropean Convention for the Protection of Human Rights andFundamental Freedoms signed in Rome on 4 November 1950 and asthey result from the constitutional traditions common to the MemberStates, as general principles of Community law. 3. The Union shall provide itself with the means necessary to attain itsobjectives and carry through its policies. TITLE2PROVISIONS AMENDING THE TREATY ESTABLISHING THEEUROPEAN ECONOMIC COMMUNITY WITH A VIEW TO ESTABLISHINGTHE EUROPEAN COMMUNITY ARTICLE GThe Treaty establishing the European Economic Community shall beamended in accordance with the provisions of this Article, in order toestablish a European Community. A. Throughout the Treaty:1) The term "European Economic Community" shall be replaced by theterm "European Community". B. In Part One "Principles":2) Article 2 shall be replaced by the following:"ARTICLE 2The Community shall have as its task, by establishing a commonmarket and an economic and monetary union and by implementing thecommon policies or activities referred to in Articles 3 and 3a, topromote throughout the Community a harmonious and balanceddevelopment of economic activities, sustainable and non-inflationarygrowth respecting the environment, a high degree of convergence ofeconomic performance, a high level of employment and of socialprotection, the raising of the standard of living and quality of life, andeconomic and social cohesion and solidarity among Member States. '3) Article 3 shall be replaced by the following:"ARTICLE 3For the purposes set out in Article 2, the activities of the Communityshall include, as provided in this Treaty and in accordance with thetimetable set out therein:(a) the elimination, as between Member States, of customs duties andquantiative restrictions on the import and export of goods, and of allother measures having equivalent effect;(b) a common commercial policy;(c) an internal market characterized by the abolition, as betweenMember States of obstacles to the free movement of goods, persons, services and capital;(d) measures concerning the entry and movement of persons in theinternal market as provided for in Article l00c;(e) a common policy in the sphere of agriculture and fisheries;(f) a common policy in the sphere of transport;(g) a system ensuring that competition in the internal market is notdistorted;(h) the approximation of the laws of Member States to the extentrequired for the functioning of the common market;(i) a policy in the social sphere comprising a European Social Fund;(j) the strengthening of economic and social cohesion;(k) a policy in the sphere of the environment;(l) the strengthening of the competitiveness of Community industry;(m) the pomotion of research and technological development;(n) encouragement for the establishment and development of trans-European networks;(o) a contribution to the attainment of a high level of health protection;(p) a contribution to education and training of quality and to theflowering of the cultures of the Member States;(q) a policy in the sphere of development co-operation;(r) the association of the overseas countries and territories in order toincrease trade and promote jointly economic and social development;(s) a contribution to the strengthening of consumer protection;(t) measures in the spheres of energy, civil protection and tourism. "4) The following Article shall be inserted:"ARTICLE 3a1. For the purposes set out in Article 2, the activities of the MemberStates and the Community shall include, as provided in this Treatyand in accordance with the timetable set out therein, the adoption of aneconomic policy which is based on the close co-ordination of MemberStates' economic policies, on the internal market and on the definitionof common objectives, and conducted in accordance with the principleof an open market economy with free competition. 2. Concurrently with the foregoing, and as provided in this Treaty andin accordance with the timetable and the procedures set out therein, these activities shall include the irrevocable fixing of exchange ratesleading to the introduction of a single currency, the ECU, and thedefinition and conduct of a single monetary policy and exchange ratepolicy the primary objective of both of which shall be to maintain pricestability and, without prejudice to this objective, to support the generaleconomic policies in the Community, in accordance with the principleof an open market economy with free competition. 3. These activities of the Member States and the Community shallentail compliance with the following guiding principles: stable prices, sound public finances and monetary conditions and a sustainablebalance of payments. "5) The following Article shall be inserted:"ARTICLE 3bThe Community shall act within the limit of the powers conferred uponit by this Treaty and of the objectives assigned to it therein. In areas which do not fall within its exclusive competence, theCommunity shall take action, in accordance with the principle ofsubsidiarity, only if and in so far as the objectives of the proposedaction cannot be sufficiently achieved by the Member States and cantherefore, by reason of the scale or effects of the proposed action, bebetter achieved by the Community. Any action by the Community shall not go beyond what is necessary toachieve the objectives of this Treaty. "6) Article 4 shall be replaced by the following:"ARTICLE 41. The tasks entrusted to the Community shall be carried out by thefollowing institutions:- a EUROPEAN Parliament, - a COUNCIL, - a COMMISSION, - a COURT OF JUSTICE, - a COURT OF AUDITORS. Each institution shall act within the limits of the powers conferred uponit by this Treaty. 2. The Council and the Commission shall be assisted by an Economicand Social Committee and a Committee of the Regions acting in anadvisory capacity. "7) The following Articles shall be inserted:"ARTICLE 4aA European System of Central Banks (hereinafter referred to as"ESCB") and a European Central Bank (hereinafter referred to as"ECB") shall be established in accordance with the procedures laiddown in this Treaty; they shall act within the limits of the powersconferred upon them by this Treaty and by the Statute of the ESCB andof the ECB (hereinafter referred to as "Statute of the ESCB") annexedthereto. ARTICLE 4bA European Investment Bank is hereby established, which shall actwithin the limit of the powers conferred upon it by this Treaty and theStatute annexed thereto. "8) Article 6 shall be deleted and Article 7 shall become Article6. Its second paragraph shall be replaced by the following:"The Council, acting in accordance with the procedure referred to inArticle 189c, may adopt rules designed to prohibit suchdiscrimination. "9) Articles 8, 8a, 8b and 8c shall become respectively Article 7, 7a, 7band 7c. C. The following Part shall be inserted:"PART TWOCITIZENSHIP OF THE UNIONARTICLE 81. Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be acitizen of the Union. 2. Citizens of the Union shall enjoy the rights conferred by this Treatyand shall be subject to the duties imposed thereby. ARTICLE 8a1. Every citizen of the Union shall have the right to move and residefreely within the territory of the Member States, subject to thelimitations and conditions laid down in this Treaty and by themeasures adopted to give it effect. 2. The Council may adopt provisions with a view to facilitating theexercise of the rights referred to in paragraph 1; save as otherwiseprovided in this Treaty, the Council shall act unanimously on aproposal from the Commission after obtaining the assent of theEuropean Parliament. ARTICLE 8b1. Every citizen of the Union residing in a Member State of which he isnot a national shall have the right to vote and to stand as a candidateat municipal elections in the Member State in which he resides, underthe same conditions as nationals of that State. This right shall beexercised subject to detailed arrangements to be adopted before 31December 1994 by the Council, acting unanimously, on a proposalfrom the Commission and after consulting the European Parliament;these arrangements may provide for derogations where warranted byproblems specific to a Member State. 2. Without prejudice to Article 1 38(3) and to the provisions adopted forits implementation, every citizen of the Union residing in a MemberState of which he is not a national shall have the right to vote and tostand as a candidate in elections to the European Parliament in theMember State in which he resides, under the same conditions asnationals of that State. This right shall be exercised subject to detailedarrangements to be adopted before 31 December 1993 by the Council, acting unanimously on a proposal from the Commission and afterconsulting the European Parliament; these arrangements may providefor derogations where warranted by problems specific to a MemberState. ARTICLE 8cEvery citizen of the Union shall, in the territory of a third country inwhich the Member State of which he is a national is not represented, be entitled to protection by the diplomatic or consular authorities ofany Member State, on the same conditions as the nationals of thatState. Before 31 December 1993, Member States shall establish thenecessary rules among themselves and start the internationalnegotiations required to secure this protection. ARTICLE 8dEvery citizen of the Union shall have the right to petition the EuropeanParliament in accordance with Article 138d. Every citizen of the Union may apply to the Ombudsman establishedin accordance with Article 138e. ARTICLE 8eThe Commission shall report to the European Parliament, to theCouncil and to the Economic and Social Committee before 31December 1993 and then every three years on the application of theprovisions of this Part. This report shall take account of thedevelopment of the Union. On this basis, and without prejudice to the other provisions of thisTreaty, the Council, acting unanimously on a proposal from theCommission and after consulting the European Parliament, may adoptprovisions to strengthen or to add to the rights laid down in this Part, which it shall recommend to the Member States for adoption inaccordance with their respective constitutional requirements. "D. Parts Two and Three shall be grouped under the following Title:"PART THREECOMMUNITY POLICIES"and in this Part:10) The first sentence of Article 49 shall be replaced by the following:"As soon as this Treaty enters into force, the Council shall, acting inaccordance with the procedure referred to in Article 189b and afterconsulting the Economic and Social Committee, issue directives ormake regulations setting out the measures required to bring about, byprogressive stages, freedom of movement for workers, as defined inArticle 48, in particular. "11) Article 54(2) shall be replaced by the following:"2. In order to implement this general programme or, in the absence ofsuch programme, in order to achieve a stage in attaining freedom ofestablishment as regards a particular activity, the Council, acting inaccordance with the Procedure referred to in Article 189b and afterconsulting the Economic and Social Committee, shall act by means ofdirectives. "12) Article 56(2) shall be replaced by the following:"2. Before the end of the transitional period, the Council shall, actingunanimously on a proposal from the Commission and after consultingthe European Parliament, issue directives for the co-ordination of theabove mentioned provisions laid down by law, regulation oradministrative action. After the end of the second stage, however, theCouncil shall, acting in accordance with the procedure referred to inArticle 189b, issue directives for the co-ordination of such provisionsas, in each Member State, are a matter for regulation or administrativeaction. "13) Article 57 shall be replaced by the following:"ARTICLE 571. In order to make it easier for persons to take up and pursueactivities as self-employed persons, the Council shall, acting inaccordance with the procedure referred to in Article 189b, issuedirectives for the mutual recognition of diplomas, certificates and otherevidence of formal qualifications. 2. For the same purpose, the Council shall, before the end of thetransitional period, issue directives for the co-ordination of theprovisions laid down by law, regulation or administrative action inMember States concerning the taking up and pursuit of activities asself-employed persons. The Council, acting unanimously on aproposal from the Commission and after consulting the EuropeanParliament, shall decide on directives the implementation of whichinvolves in at least one Member State amendment of the existingprinciples laid down by law governing the professions with respect totraining and conditions of access for natural persons. In other casesthe Council shall act in accordance with the procedure referred to inArticle 189b. 3. In the case of the medical and allied and pharmaceuticalprofessions, the progressive abolition of restrictions shall bedependent upon co-ordination of the conditions for their exercise in thevarious Member States. "14) The title of Chapter 4 shall be replaced by the following: "CHAPTER 4CAPITAL AND PAYMENTS"15) The following Articles shall be inserted:"ARTICLE 73aAs from 1 January 1994, Articles 67 to 73 shall be replaced by Articles73b, c, d, e, f and g. ARTICLE 73b1. Within the framework of the provisions set out in this Chapter, allrestrictions on the movement of capital between Member States andbetween Member States and third countries shall be prohibited. 2. Within the framework of the provisions set out in this Chapter, allrestrictions on payments between Member States and betweenMember States and third countries shall be prohibited. ARTICLE 73c1. The Provisions of Article 73b shall be without prejudice to theapplication to third countries, of any restrictions which exist on 31December 1993 under national or Community law adopted in respectof the movement of capital to or from third countries involving directinvestment - including investment in real estate - establishment, theprovision of financial services or the admission of securities to capitalmarkets. 2. Whilst endeavouring to achieve the objective of free movement ofcapital between Member States and third countries to the greatestextent possible and without prejudice to the other Chapters of thisTreaty, the Council may, acting by a qualified majority on a proposalfrom the Commission, adopt measures on the movement of capital toor from third countries involving direct investment - includinginvestment in real estate -, establishment, the provision of financialservices or the admission of securities to capital markets. Unanimityshall be required for measures under this paragraph which constitutea step back in Community law as regards the liberalization of themovement of capital to or from third countries. ARTICLE 73d1. The provisions of Article 73b shall be without prejudice to the rightof Member States:(a) to apply the relevant provision of their tax law which distinguishbetween tax-payers who are not in the same situation with regard totheir place of residence or with regard to the place where their capitalis invested;(b) to take all requisite measures to prevent infringement of nationallaw and regulations, in particular in the field taxation and theprudential supervision of financial institutions, or to lay downprocedures for the declaration of capital movements for purposes ofadministrative or statistical information, or to take measures which arejustified on grounds of public policy or public security. 2. The provisions of this Chapter shall be without prejudice to theapplicability of restrictions on the right of establishment which arecompatible with this Treaty. 3. The measures and procedures referred to in paragraphs 1 and 2shall not constitute a means of arbitrary discrimination or a disguisedrestriction on the free movement of capital and payments as defined inArticle 73b. ARTICLE 73eBy way of derogation from Article 73b, Member States which, on 31December 1993, enjoy a derogation on the basis of existingCommunity law, shall be entitled to maintain, until 31 December 1995at the latest, restrictions on movement of capital authorized by suchderogations as exist on that date. ARTICLE 73fWhere, in exceptional circumstances, movement of capital to or fromthird countries cause, or threaten to cause, serious difficulties for theoperation of economic and monetary union, the Council, acting by aqualified majority on a proposal from the Commission and afterconsulting the ECB, may take safeguard measures with regard to thirdcountries for a period not exceeding six months if such measures arestrictly necessary. ARTICLE 73g1. If, in the cases envisaged in Article 228a, action by the Communityis deemed necessary, the Council may, in accordance with theprocedure provided for in Article 228a, take the necessary urgentmeasures on the movement of capital and on payments as regards thethird countries concerned. 2. Without prejudice to Article 224 and as long as the Council has nottaken measures pursuant to paragraph 1, a Member State may, forserious political reasons and on grounds of urgency, take unilateralmeasures against a third country with regard to capital movementsand payments. The Commission and the other Member States shall beinformed of such measures by the date of their entry into force at thelatest. The Council may, acting by a qualified majority on a proposal from theCommission, decide that the Member State concerned shall amend orabolish such measures. The President of the Council shall inform theEuropean Parliament of any such decision taken by the Council. ARTICLE 73hUntil 1 January 1994, the following provisions shall be applicable:1) Each Member State undertakes to authorize, in the currency of theMember State in which the creditor or the beneficiary resides, anypayment connected with the movement of goods, services or capital, and any transfers of capital and earnings, to the extent that themovement of goods, services, capital and persons between MemberStates has been liberalized pursuant to this Treaty. The Member States declare their readiness to undertake theliberalization of payments beyond the extent provided in the precedingsubparagraph, in so far as their economic situation in general and thestate of their balance of payment in particular so permit. 2) In so far as movement of goods, services and capital are limitedonly by restrictions on payments connected therewith, theserestrictions shall be progressively abolished by applying, mutatismutandis, the provisions of this Chapter and the Chapters relating tothe abolition of qualitative restrictions and to the liberalization ofservices. 3) Member States undertake not to introduce between themselves anynew restrictions on transfers connected with the invisible transactionslisted in Annex III to this Treaty. The progressive abolition of existing restrictions shall be effected inaccordance with the provisions of Articles 63 to 65, in so far as suchabolition is not governed by the provisions contained in paragraphs 1and 2 or by the other provisions of this Chapter. 4) If need be, Member States shall consult each other on the measuresto be taken to enable the payment and transfers mentioned in thisArticle to be effected; such measures shall not prejudice theattainment of the objectives set out in this Treaty. "16) Article 75 shall be replaced by the following:"ARTICLE 751. For the purpose of implementing Article 74, and taking into accountthe distinctive features of transport, the Council shall, acting inaccordance with the procedure referred to in Article 189c and afterconsulting the Economic and Social Committee, lay down:(a) common rules applicable to international transport to or from theterritory of a Member State or passing across the territory of one ormore Member States;(b) the conditions under which non-resident carriers may operatetransport services within a Member State;(c) measures to improve transport safety;(d) any other appropriate provisions. 2. The Provisions referred to in (a) and (b) of paragraph 1 shall be laiddown during the transitional period. 3. By way of derogation from the procedure provided for in paragraph1, where the application of provisions concerning the principles of theregulatory system for transport would be liable to have a seriouseffect on the standard of living and on employment in certain areasand on the operation of transport facilities, they shall be laid down bythe Council acting unanimously on a proposal from the Commission, after consulting the European Parliament and the Economic and SocialCommittee. In so doing, the Council shall take into account the needfor adaptation to the economic development which will result fromestablishing the common market. "17) The title of Title I in Part Three shall be replaced by, the following:"TITLE VCommon rules on competition and approximation of laws"18) In Article 92(3):- the following point shall be inserted:"(d) aid to promote culture and heritage conservation where such aiddoes not affect trading conditions and competition in the Community toan extent that is contrary to the common interest. "- the present point (d) shall become (e). 19) Article 94 shall be replaced by the following:"ARTICLE 94The Council, acting by a qualified majority on a proposal from theCommission and after consulting the European Parliament, may makeany appropriate regulations for the application of Articles 92 and 93and may in particular determine the conditions in which Article 93(3)shall apply and the categories of aid exempted from this procedure. "20) Article 99 shall be replaced by the following:"ARTICLE 99The Council shall, acting unanimously on a proposal from theCommission and after consulting the European Parliament and theEconomic and Social Committee, adopt provisions for theharmonization of legislation concerning turnover taxes, excise dutiesand other forms of indirect taxation to the extent that suchharmonization is necessary to ensure the establishment and thefunctioning of the internal market within the time limit laid down inArticle 7a. "21) Article 100 shall be replaced by the following:"ARTICLE 100The Council shall, acting unanimously on a proposal from theCommission and after consulting the European Parliament and theEconomic and Social Committee, issue directives for theapproximation of such laws, regulations or administrative provisionsof the Member States as directly affects the establishment orfunctioning of the common market. "22) Article l00a(1) shall be replaced by the following:"1. By way of derogation from Article 100 and save where otherwiseprovided in this Treaty, the following provisions shall apply for theachievement of the objectives set out in Article 7a. The Council shall, acting in accordance with the procedure referred to in Article 189b andafter consulting the Economic and Social Committee, adopt themeasures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have astheir object the establishment and functioning of the internal market. "23) The following Article shall be inserted:"ARTICLE l00c1. The Council, acting unanimously on a proposal from theCommission and after consulting the European Parliament, shalldetermine the third countries whose nationals must be in possessionof a visa when crossing the external borders of the Member States. 2. However, in the event of an emergency situation in a third countryposing a threat of a sudden inflow of nationals from that country intothe Community, the Council, acting by a qualified majority on arecommendation from the Commission, may introduce, for a period notexceeding six months, a visa requirement for nationals from thecountry in question. The visa requirement established under thisparagraph may be extended in accordance with the procedure referredto in paragraph 1. 3. From 1 January 1996, the Council shall adopt the decisions referredto in paragraph 1 by a qualified majority. The Council shall, before thatdate, acting by a qualified majority on a proposal from theCommission and after consulting the European Parliament, adoptmeasures relating to a uniform format for visas. 4. In the areas referred to in this Article, the Commission shallexamine any request made by a Member State that it submit aproposal to the Council. 5. This Article shall be without prejudice to the exercise of theresponsibilities incumbent upon the Member States with regard to themaintenance of law and order and the safeguarding of internalsecurity. 6. This Article shall apply to other areas if so decided pursuant toArticle K. 9 of the provisions of the Treaty on European Union whichrelate to co-operation in the fields of justice and home affairs, subjectto the voting conditions determined at the same time. 7. The provisions of the conventions in force between the MemberStates governing areas covered by this Article shall remain in forceuntil their content has been replaced by directives or measuresadopted pursuant to this Article. "24) The following Article shall be inserted:"ARTICLE l00dThe Co-ordinating Committee consisting of senior officials set up byArticle K. 4 of the Treaty on European Union shall contribute, withoutprejudice to the provisions of Article 151, to the preparation of theproceedings of the Council in the fields referred to in Article l00c. "25) Title II, Chapters 1, 2 and 3 in Part Three shall be replaced by thefollowing:"TITLE VIECONOMIC AND MONETARY POLICYCHAPTER 1ECONOMIC POLICYARTICLE 102aMember States shall conduct their economic policies with a view tocontributing to the achievement of the objectives of the Community, asdefined in Article 2, and in the context of the broad guidelines referredto in Article 103(2). The Member States and the Community shall act inaccordance with the principle of an open market economy with freecompetition, favouring an efficient allocation of resources, and incompliance with the principle set out in Article 3a. ARTICLE 1031. Member States shall regard their economic policies as a matter ofcommon concern and shall co-ordinate them within the Council, inaccordance with the provisions of Article 102a. 2. The Council shall, acting by a qualified majority on arecommendation from the Commission, formulate a draft for the broadguidelines of the economic policies of the Member States and of theCommunity, and shall report its findings to the European Council. The European Council shall, acting on the basis of the report from theCouncil, discuss a conclusion on the broad guidelines of the economicpolicies of the Member States and of the Community. On the basis of this conclusion, the Council shall, acting by a qualifiedmajority, adopt a recommendation setting out these broad guidelines. The Council shall inform the European Parliament of itsrecommendation. 3. In order to ensure closer co-ordination of economic policies andsustained convergence of the economic performances of the MemberStates, the Council shall, on the basis of reports submitted by theCommission, monitor economic development in each of the MemberStates and in the Community as well as the consistency of economicpolicies with the broad guidelines referred to in paragraph 2, andregularly carry out an overall assessment. For the purpose of this multilateral surveillance, Member States shallforward information to the Commission about important measurestaken by them in the field of their economic policy and otherinformation as they deem necessary. 4. Where it is established, under the procedure referred in paragraph3, that the economic policies of a Member State are not consistent withthe broad guidelines referred to in paragraph 2 or that they riskjeopardizing the proper functioning of economic and monetary union, the Council may, acting by a qualified majority on a recommendationfrom the Commission, make the necessary recommendations to theMember State concerned. The Council may, acting by a qualifiedmajority on a proposal from the Commission, decide to make itsrecommendations public. The President of the Council and the Commission shall report to theEuropean Parliament on the result of multilateral surveillance. ThePresident of the Council may be invited to appear before thecompetent Committee of the European Parliament if the Council hasmade its recommendations public. 5. The Council, acting in accordance with the procedure referred to inArticle 189c, may adopt detailed rules for the multilateral surveillanceprocedure referred to in paragraphs 3 and 4 of this Article. ARTICLE 103a1. Without prejudice to any other procedures provided for in thisTreaty, the Council may, acting unanimously on a proposal from theCommission, decide upon the measures appropriate to the economicsituation, in particular if severe difficulties arise in the supply ofcertain products. 2. Where a Member State is in difficulties or is seriously threatenedwith severe difficulties caused by exceptional occurrences beyond itscontrol, the Council may, acting unanimously on a proposal from theCommission, grant, under certain conditions, Community financialassistance to the Member State concerned. Where the severedifficulties are caused by natural disasters, the Council shall act byqualified majority. The President of the Council shall inform theEuropean Parliament of the decision taken. ARTICLE 1041. Overdraft facilities or any other type of credit facility with the ECB orwith the central banks of the Member States (hereinafter referred to as"national central banks") in favour of Community institutions or bodies, central governments, regional, local or other public authorities, otherbodies governed by public law, or public undertakings of MemberStates shall be prohibited, as shall the purchase directly from them bythe ECB or national central banks of debt instruments. 2. Paragraph 1 shall not apply to publicly-owned credit institutionswhich, in the context of the supply of reserves by central banks, shallbe given the same treatment by national central banks and the ECB asprivate credit institutions. ARTICLE 104a1. Any measure, not based on prudential considerations, establishingprivileged access by Community institutions or bodies, centralgovernments, regional, local or other public authorities, other bodiesgoverned by public law, or public undertakings of Member States tofinancial institutions shall be prohibited. 2. The Council, acting in accordance with the procedure referred to inArticle 189c, shall, before 1 January 1994, specify definitions for theapplication of the prohibition referred to in paragraph 1. ARTICLE 104b1. The Community shall not be liable for or assume the commitmentsof central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of anyMember State, without prejudice to mutual financial guarantees for thejoint execution of a specific project. A Member State shall not be liablefor or assume the commitment of central governments, regional, localor other public authorities, other bodies governed by public law orpublic undertakings of another Member State, without prejudice tomutual financial guarantees for the joint execution of a specific project. 2. If necessary, the Council, acting in accordance with the procedurereferred to in Article 189c, may specify definitions for the application ofthe prohibitions referred to in Article 104 and in this Article. ARTICLE 104c1. Member States shall avoid excessive governmental deficits. 2. The Commission shall monitor the development of the budgetarysituation and of the stock of government debt in the Member Stateswith a view to identifying gross errors. In particular it shall examinecompliance with budgetary discipline on the basis of the following twocriteria:(a) whether the ratio of the planned or actual government deficit togross domestic product exceeds a reference value, unless- either the ratio has declined substantially and continuously andreached a level that comes close to the reference value;- or, alternatively, the excess over the reference value is onlyexceptional and temporary and the ratio remains close to thereference value;(b) whether the ratio of government debt to gross domestic productexceeds a reference value, unless the ratio is sufficiently diminishingand approaching the reference value at a satisfactory pace. The reference values are specified in the Protocol on the excessivedeficit procedure annexed to this Treaty. 3. If a Member State does not fulfil the requirements under one or bothof these criteria, the Commission shall prepare a report. The report ofthe Commission shall also take into account whether the governmentdeficit exceeds government investment expenditure and take intoaccount all other relevant factors, including the medium term economicand budgetary position of the Member State. The Commission may also prepare a report if, notwithstanding thefulfillment of the requirement under the criteria, it is of the opinion thatthere is a risk of an excessive deficit in a Member State. 4. The Committee provided for in Article 109c shall formulate anopinion on the report of the Commission. 5. If the Commission considers that an excessive deficit in a MemberState exists or may occur, the Commission shall address an opinionto the Council. 6. The Council shall, acting by a qualified majority on arecommendation from the Commission, and having considered anyobservations which the Member State concerned may wish to make, decide after an overall assessment whether an excessive deficitexists. 7. Where the existence of an excessive deficit is decided according toparagraph 6, the Council shall make recommendations to the MemberState concerned with a view to bringing that situation to an end withina given period. Subject to the provisions of paragraph 8, theserecommendations shall not be made public. 8. Where it establishes that there has been no effective action inresponse to its recommendations within the period laid down, theCouncil may make its recommendations public. 9. If a Member State persists in failing to put into practice therecommendations of the Council, the Council may decide to give noticeto the Member State to take, within a specified time limit, measures forthe deficit reduction which is judged necessary by the Council in orderto remedy the situation. In such a case, the Council may request the Member State concernedto submit reports in accordance with a specific timetable in order toexamine the adjustment efforts of that Member State. 10. The right to bring actions provided for in Articles 169 and 170 maynot be exercised within the framework of paragraphs 1 to 9 of thisArticle. 11. As long as a Member State fails to comply with a decision taken inaccordance with paragraph 9, the Council may decide to apply thefollowing measures:- to require the Member State concerned to publish additionalinformation, to be specified by the Council, before issuing bonds andsecurities;- to invite the European Investment Bank to reconsider its lendingpolicy towards the Member State concerned;- to require the Member State concerned to make a non-interest-bearing deposit of an appropriate size with the Community until theexcessive deficit has, in the view of the Council, been corrected;- to impose fines of an appropriate size. The President of the Council shall inform the European Parliament ofthe decisions taken. 12. The Council shall abrogate some or all of its decisions referred toin paragraphs 6 to 9 and 11 to the extent that the excessive deficit inthe Member State concerned has, in the viewof the Council, been corrected. If the Council has previously madepublic recommendations, it shall, as soon as the decision underparagraph 8 has been abrogated, make a public statement that anexcessive deficit in the Member State concerned no longer exists. 13. When taking the decisions referred to in paragraphs 7 to 9, 11 and12, the Council shall act on a recommendation from the Commissionby a majority of two thirds of the votes of its members weighted inaccordance with Article 148(2), excluding the votes of therepresentative of the Member State concerned. 14. Further provisions relating to the implementation of the proceduredescribed in this Article are set out in the Protocol on the excessivedeficit procedure annexed to this Treaty. The Council shall, acting unanimously on a proposal from theCommission and after consulting the European Parliament and theECB, adopt the appropriate provisions which shall then replace thesaid Protocol. Subject to the other provisions of this paragraph the Council shall, before 1 January 1994, acting by a qualified majority on a proposalfrom the Commission and after consulting the European Parliament, lay down detailed rules and definitions for the application of theprovisions of the said Protocol. CHAPTER 2MONETARY POLICYARTICLE 1051. The primary objective of the ESCB shall be to maintain pricestability. Without prejudice to the objective of price stabilty, the ESCBshall support the general economic policies in the Community with aview to contributing to the achievement of the objectives of theCommunity as laid down in Article 2. The ESCB shall act in accordancewith the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance withthe principles set out in Article 3a. 2. The basic tasks to be carried out through the ESCB shall be:- to define and implement the monetary policy of the Community;- to conduct foreign exchange operations consistent with theprovisions of Article 109;- to hold and manage the official foreign reserves of the MemberStates;- to promote the smooth operation of payment systems. 3. The third indent of paragraph 2 shall be without prejudice to theholding and management by the government of Member States offoreign exchange working balances. 4. The ECB shall be consulted:- on any proposed Community act in its fields of competence;- by national authorities regarding any draft legislative provision in itsfields of competence, but within the limits and under the conditions setout by the Council in accordances with the procedure laid down inArticle 106(6). The ECB may submit opinions to the appropriate Communityinstitutions or bodies or to national authorities on matters in its fieldsof competence. 5. The ESCB shall contribute to the smooth conduct of policiespursued by the competent authorities relating to the prudentialsupervision of credit institutions and the stability of the financialsystem. 6. The Council may, acting unanimously on a proposal from theCommission and after consulting the ECB and after receiving theassent of the European Parliament, confer upon the ECB specific tasksconcerning policies relating to the prudential supervision of creditinstitutions and other financial institutions with the exception ofinsurance undertakings. ARTICLE 105a1. The ECB shall have the exclusive right to authorize the issue ofbank note within the Community. The ECB and the national centralbanks may issue such notes. The bank notes issued by the ECB andthe national central banks shall be the only such notes to have thestatus of legal tender within the Community. 2. The Member States may issue coins subject to approval by the ECBof the volume of the issue. The Council may, acting in accordance withthe procedure referred to in Article 189c and after consulting the ECB, adopt measures to harmonize the denominations and technicalspecifications of all coins intended for circulation to the extentnecessary to permit their smooth circulation within the Community. ARTICLE 1061. The ESCB shall be composed of the ECB and of the national centralbanks. 2. The ECB shall have legal personality. 3. The ESCB shall be governed by the decision-making bodies of theECB which shall be the Governing Council and the Executive Board. 4. The Statute of the ESCB is laid down in a Protocol annexed to thisTreaty. 5. Articles 5. 1, 5. 2, 5. 3, 17, 18, 19. 1, 22, 23, 24, 26, 32. 2, 32. 3. 32. 4, 32. 6, 33. L(a) and 36 of the Statute of the ESCB may be amended by theCouncil, acting either by a qualified majority on a recommendationfrom the ECB and after consulting the Commission or unanimously ona proposal from the Commission and after consulting the ECB. Ineither case, the assent of the European Parliament shall be required. 6. The Council, acting by a qualified majority either on a proposal fromthe Commission and after consulting the European Parliament and theECB or on a recommendation from the ECB and after consulting theEuropean Parliament and the Commission, shall adopt the provisionsreferred to in Articles 4, 5. 4, 19. 2, 20, 28-1, 29. 2, 30. 4 and 34. 3 of theStatute of the ESCB. ARTICLE 107When exercising the powers and carrying out the tasks and dutiesconferred upon them by this Treaty and the Statute of the ESCB, neither the ECB, nor a national central bank, nor any member of theirdecision-making bodies shall seek or take instructions fromCommunity institutions or bodies, from any government of a MemberState or from any other body. The Community institutions and bodiesand the governments of the Member States undertake to respect thisprinciple and not to seek to influence the members of the decision-making bodies of the ECB or of the national central banks in theperformance of their tasks. ARTICLE 108Each Member State shall ensure, at the latest at the date of theestablishment of the ESCB, that its national legislation including thestatutes of its national central bank is compatible with this Treaty andthe Statute of the ESCB. ARTICLE 108a1. In order to carry out the tasks entrusted to the ESCB, the ECB shall, in accordance with the provisions of this Treaty and under theconditions laid down in the Statute of the ESCB:- make regulations to the extent necessary to implement the tasksdefined in Article 3. 1, first indent, Articles 19. 1, 22 and 25. 2 of theStatute of the ESCB and in cases which shall be laid down in the actsof the Council referred to in Article 106(6);- take decisions necessary for carrying out the tasks entrusted to theESCB under this Treaty and the Statute of the ESCB;- make recommendations and deliver opinions. 2. A regulation shall have general application. It shall be binding in itsentirety and directly applicable in all Member States. Recommendations and opinions shall have no binding force. A decision shall be binding in its entirety upon those to whom it isaddressed. Articles 190 to 192 shall apply to regulations and decisions adoptedby the ECB. The ECB may decide to publish its decisions, recommendations andopinions. 3. Within the limits and under the conditions adopted by the Councilunder the procedure laid down in Article 106(6), the ECB shall beentitled to impose fines or periodic penalty payments on undertakingsfor failure to comply with obligations under its regulations anddecisions. ARTICLE 1091. By way of derogation from Article 228, the Council may, actingunanimously on a recommendation from the ECB or from theCommission, and after consulting the ECB in an endeavour to reach aconsensus consistent with the objective of price stability, afterconsulting the European Parliament, in accordance with the procedurein paragraph 3 for determining the arrangements, conclude formalagreements on an exchange rate system for the ECU in relation tonon-Community currencies. The Council may, acting by a qualifiedmajority on a recommendation from the ECB or from the Commission, and after consulting the ECB in an endeavour to reach a consensusconsistent with the objective of price stability, adopt, adjust orabandon the central rates of the ECU within the exchange rate system. The President of the Council shall inform the European Parliament ofthe adoption, adjustment or abandonment of the ECU central rates. 2. In the absence of an exchange rate system in relation to one ormore non-Community currencies as referred to in paragraph 1, theCouncil, acting by a qualified majority either on a recommendationfrom the Commission and after consulting the ECB or on arecommendation from the ECB, may formulate general orientations forexchange-rate policy in relation to these currencies. These generalorientations shall be without prejudice to the primary objective of theESCB to maintain price stability. 3. By way of derogation from Article 228, where agreementsconcerning monetary or foreign exchange regime matters need to benegotiated by the Community with one or more States or internationalorganizations, the Council, acting by a qualified majority on arecommendation from the Commission and after consulting the ECB, shall decide the arrangements for the negotiation and for theconclusion of such agreements. These arrangements shall ensure thatthe Community expresses a single position. The Commission shall befully associated with the negotiations. Agreements concluded in accordance with this paragraph shall bebinding on the institutions of the Community, on the ECB and onMember States. 4. Subject to paragraph 1, the Council shall, on a proposal from theCommission and after consulting the ECB, acting by a qualifiedmajority decide on the position of the Community at international levelas regards issues of particular relevance to economic and monetaryunion and, acting unanimously, decide its representation incompliance with the allocation of powers laid down in Articles 103 and105. 5. Without prejudice to Community competence and Communityagreements as regards economic and monetary union, Member Statesmay negotiate in international bodies and conclude internationalagreements. CHAPTER 3INSTITUTIONAL PROVISIONARTICLE 109a1. The Governing Council of the ECB shall comprise the members ofthe Executive Board of the ECB and the Governors of the nationalcentral banks. 2 (a) The Executive Board shall comprise the President, the Vice-President and four other members. (b) The President, the Vice-President and the other members of theExecutive Board shall be appointed from among the persons ofrecognized standing and professional experience in monetary orbanking matters by common accord of the Governments of the MemberStates at the level of Heads of State or of Government, on arecommendation from the Council, after it has consulted the EuropeanParliament and the Governing Council of the ECB. Their term of office shall be eight years and shall not be renewable. Only nationals of Member States may be members of the ExecutiveBoard. ARTICLE 109b1. The President of the Council and a member of the Commission mayparticipate, without having the right to vote, in meetings of theGoverning Council of the ECB. The President of the Council may submit a motion for deliberation tothe Governing Council of the ECB. 2. The President of the ECB shall be invited to participate in Councilmeetings when the Council is discussing matters relating to theobjectives and tasks of the ESCB. 3. The ECB shall address an annual report on the activities of theESCB and on the monetary policy of both the previous and currentyear to the European Parliament, the Council and the Commission, andalso to the European Council. The President of the ECB shall presentthis report to the Council and to the European Parliament, which mayhold a general debate on that basis. The President of the ECB and the other members of the ExecutiveBoard may, at the request of the European Parliament or on their owninitiative, be heard by the competent Committees of the EuropeanParliament. ARTICLE 109c1. In order to promote co-ordination of the policies of Member States tothe full extent needed for the functioning of the internal market, aMonetary Committee with advisory status is hereby set up. It shall have the following tasks:- to keep under review the monetary and financial situation of theMember States and of the Community and the general paymentssystem of the Member States and to report regularly thereon to theCouncil and to the Commission;- to deliver opinions at the request of the Council or of theCommission, or on its own initiative for submission to thoseinstitutions;- without prejudice to Article 151, to contribute to the preparation of thework of the Council referred to in Articles 73f, 73g, 103(2), (3), (4) and(5), 103a, 104a, 104b, 104c, 109e(2), 109f(6), 109h, 109i, 109j(2) and109k(1);- to examine, at least once a year, the situation regarding themovement of capital and the freedom of payments, as they result fromthe application of this Treaty and of measures adopted by the Council;the examination shall cover all measures relating to capitalmovements and payments; the Committee shall report to theCommission and to the Council on the outcome of this examination. The Member States and the Commission shall each appoint twomembers of the Monetary Committee. 2. At the start of the third stage, and Economic and FinancialCommittee shall be set up. The Monetary Committee provided for inparagraph 1 shall be dissolved. The Economic and Financial Committee shall have the following tasks:- to deliver opinions at the request of the Council or of theCommission, or on its own initiative for submission to thoseinstitutions;- to keep under review the economic and financial situation of theMember States and of the Community and to report regularly thereonto the Council and to the Commission, in particular on financialrelations with third countries and international institutions;- without prejudice to Article 151, to contribute to the preparation of thework of the Council referred to in Article 73f, 73g, 103(2), (3), (4) and (5), 103a, 104a, 104b, 104c, 105(6), 105a(2), 106(5) and (6), 109, 109h, 109i(2) and (3), 109k(2), 109l(4) and (5), and to carry out other advisoryand preparatory tasks assigned to it by the Council;- to examine, at least once a year, the situation regarding themovement of capital and the freedom of payments, as they result fromthe application of this Treaty and of measures adopted by the Council;the examination shall cover all measures relating to capitalmovements and payments; the Commission shall report to theCommission and to the Council on the outcome of this examination. The Member States, the Commission and the ECB shall each appointno more than two members of the Committee. 3. The Council shall, acting by qualified majority on a proposal fromthe Commission and after consulting the ECB and the Committeereferred to in this Article, lay down detailed provisions concerning thecomposition of the Economic and Financial Committee. The Presidentof the Council shall inform the European Parliament of such adecision. 4. In addition to the tasks set in paragraph 2, if and as long as thereare Member States with a derogation as referred to in Articles 109kand 109l, the Committee shall keep under review the monetary andfinancial situation and the general payments system of those MemberStates and report regularly thereon to the Council and to theCommission. ARTICLE 109dFor matters within the scope of Articles 103(4), 104c with the exceptionof paragraph 14, 109, 109j, 109k and 109l(4) and (5), the Council or aMember State may request the Commission to make arecommendation or a proposal, as appropriate. The Commission shallexamine this request and submit its conclusions to the Council withoutdelay. CHAPTER 4TRANSITIONAL PROVISIONSARTICLE 109e1. The second stage for achieving economic and monetary union shallbegin on 1 January 1994. 2. Before that date(a) each Member State shall:- adopt, where necessary, appropriate measures to comply with theprohibitions laid down in article 73b, without prejudice to Article 73e, and in Articles 104 and 104a(1);- adopt, if necessary, with a view to permitting the assessmentprovided for in subparagraph (b), multiannual programmes intended toensure the lasting convergence necessary for the achievement ofeconomic and monetary union, in particular with regard to pricestability and sound public finances;(b) the Council shall, on the basis of a report from the Commission, assess the progress made with regard to economic and monetaryconvergence, in particular with regard to price stability and soundpublic finances, and the progress made with the implementation ofCommunity law concerning the internal market. 3. The provision of Articles 104, 104a(1), 104b(1), and 104c with theexception of paragraphs 1, 9, 11 and 14 shall apply from the beginningof the second stage. The provision of Articles 103a(2), 104c(1), (9) and (11), 105, 105a, 107, 109, 109a, 109b and 109c(2) and (4) shall apply from the beginning ofthe third stage. 4. In the second stage, Member States shall endeavour to avoidexcessive government deficits. 5. During the second stage, each Member State shall, as appropriate, start the process leading to the independence of its central bank, andin accordance with Article 108. ARTICLE 109f1. At the start of the second stage, a European Monetary Institute(hereinafter referred to as "EMI") shall be established and take up itsduties; it shall have legal personality and be directed and managed bya Council, consisting of a President and the Governors of the nationalcentral banks, one of whom shall be Vice-President. The President shall be appointed by common accord of theGovernments of the Member States at the level of Heads of State or ofGovernment, on a recommendation from, as the case may be, theCommittee of Governors of the central banks of the Member States(hereinafter referred to as "Committee of Governors") or the Council ofthe EMI, and after consulting the European Parliament and the Council. The President shall be selected from among persons of recognizedstanding and professional experience in monetary or banking matters. Only nationals of Member States may be President of the EMI. TheCouncil of the EMI shall appoint the Vice-President. The Statute of the EMI is laid down in a Protocol annexed to thisTreaty. The Committee of Governors shall be dissolved at the start of thesecond stage. 2. The EMI shall:- strengthen co-operation between the national central banks;- strengthen the co-ordination of monetary policies of the MemberStates, with the aim of ensuring price stability;- monitor the functioning of the European Monetary System;- hold consultations concerning issues falling within the competence ofthe national central banks and affecting the stability of financialinstitutions and markets;- take over the tasks of the European Monetary Cooperation Fund, which shall be dissolved; the modalities of dissolution are laid downin the Statute of the EMI;- facilitate the use of the ECU and oversee its development, includingthe smooth functioning of the ECU clearing system. 3. For the preparation of the third stage, the EMI shall:- prepare the instruments and procedures necessary for carrying out asingle monetary policy in the third stage;- promote the harmonization, where necessary, of rules and practicesgoverning the collection, compilation and distribution of statistics inthe areas in the areas within its field of competence;- prepare the rules for operations to be undertaken by the nationalcentral banks within the framework of the ESCB;- promote the efficiency of cross-border payments;- supervise the technical preparation of ECU bank notes. At the latest by 31 December 1996, the EMI shall specify theregulatory, organizational and logistical framework necessary for theESCB to perform its tasks in the third stage. This framework shall besubmitted for decision to the ECB at the date of its establishment. 4. The EMI, acting by a majority of two thirds of the members of itsCouncil, may:- formulate opinions or recommendations on the overall orientation ofmonetary policy and exchange rate policy as well as on relatedmeasures introduced in each Member State;- submit opinions or recommendations to Governments and to theCouncil on policies which might affect the internal or externalmonetary situation in the Community and, in particular, the functioningof the European Monetary System;- make recommendations to the monetary authorities of the MemberStates concerning the conduct of monetary policy. 5. The EMI, acting unanimously, may decided to publish its opinionsand its recommendations. 6. The EMI shall be consulted by the Council regarding any proposedCommunity act within its field of competence. Within the limits and under the conditions set out by the Council, acting by a qualified majority on a proposal from the Commission andafter consulting the European Parliament and the EMI, the EMI shall beconsulted by the authorities of the Member States on any draftlegislative provision within its field of competence. 7. The Council may, acting unanimously on a proposal from theCommission and after consulting the European Parliament and theEMI, confer upon the EMI other tasks for the preparation of the thirdstage. 8. Where this Treaty provides for a consultative role for the ECB, reference to the ECB shall be read as referring to the EMI before theestablishment of the ECB. Where this Treaty provides for aconsultative role for the EMI, references to the EMI shall be read, before 1 January 1994, as referring to the Committee of Governors. 9. During the second stage, the term "ECB" used in Articles 173, 175, 176, 177, 180 and 215 shall be read as referring to the EMI. ARTICLE 109gThe currency composition of the ECU basket shall not be changed. From the start of the third stage, the value of the ECU shall beirrevocably fixed in accordance with Article 109l(4). ARTICLE 109h1. Where a Member State is in difficulties or is seriously threatenedwith difficulties as regards its balance of payments either as a resultof a overall disequilibrium in its balance of payments, or as a result ofthe type of currency at its disposal, and where such difficulties areliable in particular to jeopardize the functioning of the common marketor the progressive implementation of the common commercial policy, the Commission shall immediately investigate the position of the Statein question and the action which, making use of all means at itsdisposal, that State has taken or may take in accordance with theprovisions of this Treaty. The Commission shall state what measuresit recommends the State concerned to take. If the action taken by a Member States and the measures suggestedby the Commission do not prove sufficient to overcome the difficultieswhich have arisen or which threaten, the Commission shall, afterconsulting the Committee referred to in Article 109c, recommend to theCouncil the granting of mutual assistance and appropriate methodstherefor. The Commission shall keep the Council regularly informed of thesituation of how it is developing. 2. The Council, acting by a qualified majority, shall grant such mutualassistance; it shall adopt directives or decisions laying down theconditions and details of such assistance, which may take such formsas:(a) a concerted approach to or within any other internationalorganizations to which Member States may have recourse;(b) measures needed to avoid deflection of trade where the State whichis in difficulties maintains or reintroduces quantitative restrictionsagainst third countries;(c) the granting of limited credits by other Member States, subject totheir agreement. 3. If the mutual assistance recommended by the Commission is notgranted by the Council or if the mutual assistance granted and themeasures taken are insufficient, the Commission shall authorize theState which is in difficulties to take protective measures, theconditions and details of which the Commission shall determine. Such authorization may be revoked and such conditions and detailsmay be changed by the Council acting by a qualified majority. 4. Subject to Article 109k(6), this Article shall cease to apply from thebeginning of the third stage. ARTICLE 109i1. Where a sudden crisis in the balance of payments occurs and adecision within the meaning of Article 109h(2) is not immediatelytaken, the Member State concerned may, as a precaution, take thenecessary protective measures. Such measures must cause the leastpossible disturbance in the functioning of the common market andmust not be wider in scope than is strictly necessary to remedy thesudden difficulties which have arisen. 2. The Commission and the other Member State shall be informed ofsuch protective measures not later than when they enter into force. The Commission may recommend to the Council the granting of mutualassistance under Article 109h. 3. After the Commission has delivered an opinion and the Committeereferred to in Article 109c has been consulted, the Council may, actingby a qualified majority, decide that the State concerned shall amend, suspend or abolish the protective measures referred to above. 4. Subject to Article 109k(6), this Article shall cease to apply from thebeginning of the third stage. ARTICLE 109j1. The Commission and the EMI shall report to the Council on theprogress made in the fulfilment by the Member States of theirobligations regarding the achievement of economic and monetaryunion. These reports shall include an examination of the compatibilitybetween each Member State's national legislation, including thestatutes of its national central bank, and Articles 107 and 108 of thisTreaty and the Statute of the ESCB. The report shall also examine theachievement of a high degree of sustainable convergence byreference to the fulfilment by each Member State of the followingcriteria:- the achievement of a high degree of price stability; this will beapparent from rate of inflation which is close to that of, at most, thethree best performing Member States in terms of price stability;- the sustainability of the government financial position; this will beapparent from having achieved a government budgetary positionwithout a deficit that is excessive as determined in accordance withArticle 104c(6);- the observance of the normal fluctuation margins provided for by theExchange Rate Mechanism of the European Monetary System, for atleast two years, without devaluing against the currency of any otherMember State;- the durability of convergence achieved by the Member State and ofits participation in the Exchange Rate Mechanism of the EuropeanMonetary System being reflected in the long-term interest rate levels. The four criteria mentioned in this paragraph and the relevant periodsover which they are to be respected are developed further in aProtocol annexed to this Treaty. The reports of the Commission andthe EMI shall also take account of the development of the ECU, theresults of the integration of markets, the situation and development ofthe balances of payments on current account and an examination ofthe development of unit labour costs and other price indices. 2. On the basis of these reports, the Council, acting by a qualifiedmajority on a recommendation from the Commission, shall assess:- for each Member State, whether it fulfils the necessary conditions forthe adoption of a single currency;- where a majority of the Member States fulfil the necessary conditionsfor the adoption of a single currency, and recommend its findings to the Council, meeting in the compositionof the Heads of State or of Government. The European Parliamentshall be consulted and forward its opinion to the Council, meeting inthe composition of the Heads of State or of Government. 3. Taking due account of the reports referred to in paragraph 1 and theopinion of the European Parliament referred to in paragraph 2, theCouncil, meeting in the composition of Heads of State or ofGovernment, shall acting by a qualified majority, not later than 31December 1996:- decide, on the basis of the recommendations of the Council referredto in paragraph 2, whether a majority of the Member States fulfil thenecessary conditions for the adoption of a single currency;- decide whether it is appropriate for the Community to enter the thirdstage, and if so- set the date for the beginning of the third stage. 4. If by the end of 1997 the date for the beginning of the third stage hasnot been set, the third stage shall start on 1 January 1999. Before 1July 1998, the Council, meeting in the composition of heads of State orof Government, after a repetition of the procedure provided for inparagraphs 1 and 2, with the exception of the second indent ofparagraph 2, taking into account the reports referred to in paragraph 1and the opinion of the European parliament, shall, acting by a qualifiedmajority and on the basis of the recommendations of the Councilreferred to in paragraph 2, confirm which member States fulfil thenecessary conditions for the adoption of a single currency. ARTICLE 109k1. If the decision has been taken to set the date in accordance withArticle 109j(3), the Council shall, on the basis of its recommendationreferred to in Article 109j(2), acting by a qualified majority on arecommendation from the Commission, decide whether any, and if sowhich, Member States shall have a derogation as defined in paragraph3 of this Article. Such Member States shall in this Treaty be referred toas "Member States with a derogation". If the Council has confirmed which Member States fulfil the necessaryconditions for the adoption of a single currency, in accordance withArticle 109j(4), those Member States which do not fulfil the conditionsshall have a derogation as defined in paragraph 3 of this Article. SuchMember States shall in this Treaty be referred to as "Member Stateswith a derogation". 2. At least once every two years, or at the request of a Member Statewith a derogation, the Commission and the ECB shall report to theCouncil in accordance with the procedure laid down in Article 109j(1). After consulting the European Parliament and after discussion in theCouncil, meeting in the composition of the Heads of State or ofGovernment, the Council shall, acting by a qualified majority on aproposal from the Commission, decide which Member States with aderogation fulfil the necessary conditions on the basis of the criteriaset out in Article 109j(1), and abrogate the derogations of the MemberStates concerned. 3. A derogation referred to in paragraph 1 shall entail that the followingArticles do not apply to the Member State concerned: Articles 104c(9)and (11), 105(1), (2), (3) and (5), 105a, 108a, 109, 109a(2)(b). Theexclusion of such a Member State and its national central bank fromrights and obligations within the ESCB is laid down in Chapter IX of theStatute of the ESCB. 4. In Articles 105(1), (2), and (3), 105a, 108a, 109 and 109a(2)(b), "Member States" shall be read as "Member States without aderogation". 5. The voting rights of Member States with a derogation shall besuspended for the Council decisions referred to in the Articles of thisTreaty mentioned in paragraph 3. In that case, by way of derogationfrom Articles 148 and 189a(1), a qualified majority shall be defined astwo thirds of the votes of the representatives of the Member Stateswithout derogation weighted in accordance with Article 148(2), andunanimity of those Member States shall be required for an actrequiring unanimity. 6. Articles 109h and 109i shall continue to apply to a Member Statewith a derogation. ARTICLE 109l1. Immediately after the decision on the date for the beginning of thethird stage has been taken in accordance with Article 109j(3), or, as thecase may be, immediately after 1 July 1998:- the Council shall adopt the provisions referred to in Article 106(6);- the governments of the Member States without a derogation shallappoint, in accordance with the procedure set out in Article 50 of theStatute of the ESCB, the President, the Vice-President and the othermembers of the Executive Board of the ECB. If there are MemberStates with a derogation, the number of members of the ExecutiveBoard may be smaller than provided for in Article 11. 1 of the Statute ofthe ESCB, but in no circumstances shall it be less than four. As soon as the Executive Board is appointed, the ESCB and the ECBshall be established and shall prepare for their full operation asdescribed in this Treaty and the Statute of the ESCB. The full exerciseof their powers shall start from the first day of the third stage. 2. As soon as the ECB is established, it shall, if necessary, take overtasks of the EMI. The EMI shall go into liquidation upon theestablishment of the ECB; the modalities of liquidation are laid downin the Statute of the EMI. 3. If and as long as there are Member States with a derogation, andwithout prejudice to Article 106(3) of this Treaty, the general Council ofthe ECB referred to in Article 45 of the Statute of the ESCB shall beconstituted as a third decision-making body of the ECB. 4. At the starting date of the third stage, the Council shall, acting withthe unanimity of the Member States without derogation, on a proposalfrom the Commission and after consulting the ECB, adopt theconversion rates at which their currencies shall be irrevocably fixedand at which irrevocably fixed rate the ECU shall be substituted forthese currencies, and the ECU will become a currency in its own right. This measure shall by itself not modify the external value of the ECU. The Council shall, acting according to the same procedure, also takethe other measures necessary for the rapid introduction of the ECU asthe single currency of those Member States. 5. If it is decided, according to the procedure set out in Article 109k(2), to abrogate a derogation, the Council shall, acting with the unanimityof the Member States without a derogation and the Member Stateconcerned, on a proposal from the Commission and after consultingthe ECB, adopt the rate at which the ECU shall be substituted for thecurrency of the Member State concerned, and take the other measuresnecessary for the introduction of the ECU as the single currency in theMember State concerned. ARTICLE 109m1. Until the beginning of the third stage, each Member State shall treatits exchange rate policy as a matter of common interest. In doing so, Member States shall take account of the experience acquired in co-operation within the framework of the European Monetary System(EMS) and in developing the ECU, and shall respect existing powers inthis field. 2. From the beginning of the third stage and for as long as a memberState has a derogation, paragraph 1 shall apply by analogy to theexchange rate policy of that Member State. "26) In Title II of Part Three, the title of Chapter 4 shall be replaced bythe following:"TITLE VIICommon Commercial Policy"27) Article 111 shall be repealed. 28) Article shall be replaced with the following:"ARTICLE 1131. The common commercial policy shall be based on uniformprinciples, particularly in regard to changes in tariff rates, theconclusion of tariff and trade agreements, the achievement ofuniformity in measures of liberalization, export policy and measuresto protect trade such as those to be taken in the event of dumping orsubsidies. 2. The Commission shall submit proposals to the Council forimplementing the common commercial policy. 3. Where agreements with one or more States or internationalorganizations need to be negotiated, the Commission shall makerecommendations to the Council, which shall authorize theCommission to open the necessary negotiations. The Commission shall conduct these negotiations in consultation witha special committee appointed by the Council to assist theCommission in this task and within the framework of such directivesas the Council may issue to it. The relevant provision of Article 228 shall apply. 4. In exercising the powers conferred upon it by this Article, theCouncil shall act by a qualified majority. "29) Article 114 shall be repealed. 30) Article 115 shall be replaced by the following:"ARTICLE 115In order to ensure that the execution of measures of commercial policytaken in accordance with this Treaty by any Member State is notobstructed by deflection of trade, or where differences between suchmeasures lead to economic difficulties in one or more Member States, the Commission shall recommend the methods for the requisite co-operation between Member States. Failing this, the Commission mayauthorise Member States to take the necessary protective measures, the conditions and details of which it shall determine. In case of urgency, Member States shall request authorization to takethe necessary measures themselves from the Commission, whichshall take a decision as soon as possible; the Member Statesconcerned shall then notify the measures to the other Member States. The Commission may decide at any time that the Member Statesconcerned shall amend or abolish the measures in question. In the selection of such measures, priority shall be given to thosewhich cause the least disturbance to the functioning of the commonmarket. "31) Article 116 shall be repealed. 32) In Part Three, the title of Title III shall be replaced by the following:"TITLE VIIISocial Policy, Education, Vocational Training and Youth"33) The first subparagraph of Article 118a(2) shall be replaced by thefollowing:"2. In order to help achieve the objective laid down in the firstparagraph, the Council, acting in accordance with the procedurereferred to in Article 189c and after consulting the Economic and SocialCommittee, shall adopt by means of directives, minimumrequirements for gradual implementation, having regard to theconditions and technical rules obtaining in each of the MemberStates. "34) Article 123 shall be replaced by the following:"ARTICLE 123In order to improve employment opportunities for workers in theinternal market and to contribute thereby to raising the standard ofliving, a European Social Fund is hereby established in accordancewith the provisions set out below; it shall aim to render theemployment of workers easier and to increase their geographical andoccupational mobility within the Community, and to facilitate theiradaptation to industrial changes and to changes in productionsystems, in particular through vocational training and retraining". 35) Article 125 shall be replaced by the following:"ARTICLE 125The Council, acting in accordance with the procedure referred to inArticle 189c and after consulting the Economic and Social Committee, shall adopt implementing decisions relating to the European SocialFund. "36) Articles 126, 127 and 128 shall be replaced by the following: "CHAPTER 3EDUCATION, VOCATIONAL TRAINING AND YOUTHARTICLE 1261. The Community shall contribute to the development of qualityeducation by encouraging co-operation between Member States and, ifnecessary, by supporting and supplementing their action, while fullyrespecting the responsibility of the Member States for the content ofteaching and the organization of education systems and their culturaland linguistic diversity. 2. Community action shall be aimed at:- developing the European dimension in education, particularlythrough the teaching and dissemination of the languages of theMember States;- encouraging mobility of students and teachers, inter alia byencouraging the academic recognition of diplomas and periods ofstudy;- promoting co-operation between educational establishments;- developing exchanges of information and experience on issuescommon to the education systems of the Member States;- encouraging the development of youth exchanges and of exchangesof socio-educational instructors;- encouraging the development of distance education. 3. The Community and the Member States shall foster co-operationwith third countries and the competent international organizations inthe field of education, in particular the Council of Europe4. In order to contribute to the achievement of the objectives referredto in this Article, the Council:- acting in accordance with the procedure referred to in Article 189b, after consulting the Economic and Social Committee and theCommittee of the Regions, shall adopt incentive measures, excludingany harmonization of the laws and regulations of the Member States;- acting by a qualified majority on a proposal from the Commission, shall adopt recommendations. ARTICLE 1271. The Community shall implement a vocational training policy whichshall support and supplement the action of the Member States, whilefully respecting the responsibility of the Member States for the contentand organization of vocational training. 2. Community action shall aim to:- facilitate adaptation to industrial changes, in particular throughvocational training and retraining;- improve initial and continuing vocational training in order to facilitatevocational integration and reintegration into the labour market;- facilitate access to vocational training and encourage mobility ofinstructors and trainees and particularly young people;- stimulate co-operation on training between educational or trainingestablishments and firms;- develop exchanges of information and experience on issuescommon to the training systems of the Member States. 3. The Community and the Member States shall foster co-operationwith third countries and the competent international organizations inthe sphere of vocational training. 4. The Council, acting in accordance with the procedure referred to inArticle 189c and after consulting the Economic and Social Committee, shall adopt measures to contribute to the achievement of theobjectives referred to in this Article, excluding any harmonization ofthe laws and regulations of the Member States. "37) The following shall be inserted:"TITLE IXCultureARTICLE 1281. The Community shall contribute to the flowering of the cultures ofthe Member States, while respecting their national and regionaldiversity and at the same time bringing the common cultural heritageto the fore. 2. Action by the Community shall be aimed at encouraging co-operation between Member States and, if necessary, supporting andsupplementing their action in the following areas:- improvement of the knowledge and dissemination of the culture andhistory of the European peoples;- conservation and safeguarding of cultural heritage of Europeansignificance;- non-commercial cultural exchanges;- artistic and literary creation, including in the audiovisual sector. 3. The Community and the Member States shall foster co-operationwith third countries and the competent international organizations inthe sphere of culture, in particular the Council of Europe. 4. The Community shall take cultural aspects into account in its actionunder other provisions of this Treaty. 5. In order to contribute to the achievement of the objectives referredto in this Article, the Council:- acting in accordance with the procedure referred to in Article 189band after consulting the Committee of the Regions, shall adoptincentive measures, excluding any harmonization of the laws andregulations of the Member States. The Council shall act unanimouslythroughout the procedures referred to in Article 189b;- acting unanimously on a proposal from the Commission, shall adoptrecommendations. "38) Titles IV, V, VI and VII shall be replaced by the following:"TITLE XPublic HealthARTICLE 1291. The Community shall contribute towards ensuring a high level ofhuman health protection by encouraging co-operation between theMember States and, if necessary, lending support to their action. Community action shall be directed towards the prevention ofdiseases, in particular the major health scourges, including drugdependence, by promoting research into their causes and theirtransmission, as well as health information and education. Health protection requirements shall form a constituent part of theCommunity's other policies. 2. Member States shall, in liaison with the Commission, co-ordinateamong themselves their policies and programmes in the areasreferred to in paragraph 1. The Commission may, in close contact withthe Member States, take any useful initiative to promote such co-ordination. 3. The Community and the Member States shall foster co-operationwith third countries and the competent international organizations inthe sphere of public health. 4. In order to contribute to the achievement of the objectives referredto in this Article, the Council:- acting in accordance with the procedure referred to in Article 189b, after consulting the Economic and Social Committee and theCommittee of the Regions, shall adopt incentive measures, excludingany harmonization of the laws and regulations of the Member States;- acting by a qualified majority on a proposal from the Commission, shall adopt recommendations. TITLE XIConsumer protectionARTICLE 129a1. The Community shall contribute to the attainment of a high level ofconsumer protection through:(a) measures adopted pursuant to Article 100a in the context of thecompletion of the internal market;(b) specific action which supports and supplements the policy pursuedby the Member States to protect the health, safety and economicinterests of consumers and to provide adequate information toconsumers. 2. The Council, acting in accordance with the procedure referred to inArticle 189b and after consulting the Economic and Social Committee, shall adopt the specific action referred to in paragraph 1(b). 3. Action adopted pursuant to paragraph 2 shall not prevent anyMember State from maintaining or introducing more stringentprotective measures. Such measures must be compatible with thisTreaty. The Commission shall be notified of them. TITLE XIITrans-European networksARTICLE 129b1. To help achieve the objectives referred to in Articles 7a and 130aand to enable citizens of the Union, economic operators and regionaland local communities to derive the full benefit from the setting up ofan area without internal frontiers, the Community shall contribute tothe establishment and development of trans-European networks in theareas of transport, telecommunications and energy infrastructures. 2. Within the framework of a system of open and competitive markets, action by the Community shall aim at promoting the interconnectionand inter-operability of national networks as well as access to suchnetworks. It shall take account in particular of the need to link island, landlocked and peripheral regions with the central regions of theCommunity. ARTICLE 129c1. In order to achieve the objectives referred to in Article 129b, theCommunity:- shall establish a series of guidelines covering the objectives, priorities and broad lines of measures envisaged in the sphere oftrans-European networks; these guidelines shall identify projects ofcommon interest;- shall implement any measures that may prove necessary to ensurethe inter-operability of the networks, in particular in the field oftechnical standardization;- may support the financial efforts made by the Member States forprojects of common interest financed by Member States, which areidentified in the framework of the guidelines referred to in the firstindent, particularly through feasibility studies, loan guarantees orinterest rate subsidies; the Community may also contribute, throughthe Cohesion Fund to be set up no later than 31 December 1993pursuant to Article 130d, to the financing of specific projects inMember States in the area of transport infrastructure. The Community's activities shall take into account the potentialeconomic viability of the projects. 2. Member States shall, in liaison with the Commission, co-ordinateamong themselves the policies pursued at national level which mayhave a significant impact on the achievement of the objectivesreferred to in Article 129b. The Commission may, in close co-operationwith the Member States, take any useful initiative to promote such co-ordination. 3. The Community may decide to co-operate with third countries topromote projects of mutual interest and to ensure the inter-operabilityof networks. ARTICLE 129dThe guidelines referred to in Article 129c(1) shall be adopted by theCouncil, acting in accordance with the procedure referred to in Article189b and after consulting the Economic and Social Committee and theCommittee of the Regions. Guidelines and projects of common interest which relate to theterritory of a Member State shall require the approval of the MemberState concerned. The Council, acting in accordance with the procedure referred to inArticle 189c and after consulting the Economic and Social Committeeand the Committee of the Regions, shall adopt the other measuresprovided for in Article 129c(1). TITLE XIIIIndustryARTICLE 1301. The Community and the Member States shall ensure that theconditions necessary for the competitiveness of the Community'sindustry exist. For that purpose, in accordance with a system of open and competitivemarkets, their action shall be aimed at:- speeding up the adjustment of industry to structural changes;- encouraging an environment favourable to initiative and to thedevelopment of undertakings throughout the Community, particularlysmall and medium-sized undertakings;- encouraging an environment favourable to co-operation betweenundertakings;- fostering better exploitation of the industrial potential of policies ofinnovation, research and technological development. 2. The Member States shall consult each other in liaison with theCommission and, where necessary, shall co-ordinate their action. TheCommission may undertake any useful initiative to promote such co-ordination. 3. The Community shall contribute to the achievement of theobjectives set out in paragraph 1 through the policies and activities itpursues under other provisions of this Treaty. The Council, actingunanimously on a proposal from the Commission, after consulting theEuropean Parliament and the Economic and Social Committee, maydecide on specific measures in support of action taken in the MemberStates to achieve the objectives set out in paragraph 1. This Title shall not provide a basis for the introduction by theCommunity of any measure which could lead to a distortion ofcompetition. TITLE XIVEconomic and social cohesionARTICLE 130aIn order to promote its overall harmonious development, theCommunity shall develop and pursue its actions in leading to thestrengthening of its economic and social cohesion. In particular, the Community shall aim at reducing the disparitiesbetween the levels of development of the various regions and thebackwardness of the least-favoured regions, including rural areas. ARTICLE 130bMember States shall conduct their economic policies and shall co-ordinate them is such a way as, in addition, to attain the objectives setout in Article 130a. The formulation and implementation of theCommunity's policies and actions and the implementation of theinternal market shall take into account the objectives set out in Article130a and shall contribute to their achievement. The Community shallalso support the achievement of these objectives by the action it takesthrough the Structural Funds (European Agricultural Guidance andGuarantee Fund, Guidance Section; European Social Fund; EuropeanRegional Development Fund), the European Investment Bank andother existing financial instruments. The Commission shall submit a report to the European Parliament, theCouncil, the Economic and Social Committee and the Committee of theRegions every three years on the progress made towards achievingeconomic and social cohesion and on the manner in which the variousmeans provided for in this Article have contributed to it. This reportshall, if necessary, be accompanied by appropriate proposals. If specific actions prove necessary outside the Funds and withoutprejudice to the measures decided upon within the framework of theother Community policies, such actions may be adopted by theCouncil acting unanimously on a proposal from the Commission andafter consulting the European Parliament, the Economic and SocialCommittee and the Committee of the Regions. ARTICLE 130cThe European Regional Development Fund is intended to help redressthe main regional imbalances in the Community through participationin the development and structural adjustments of regions whosedevelopment is lagging behind and in the conversion of decliningindustrial regions. ARTICLE 130dWithout prejudice to Article 130e, the Council, acting unanimously on aproposal from the Commission and after obtaining the assent of theEuropean Parliament and consulting the Economic and SocialCommittee and the Committee of the Regions, shall define the tasks, priority objectives and the organization of the Structural Funds, whichmay involve grouping the Funds. The Council, acting by the sameprocedure, shall also define the general rules applicable to them andthe provisions necessary to ensure their effectiveness and the co-ordination of the Funds with one another and with the other existingfinancial instruments. The Council, acting in accordance with the same procedure, shallbefore 31 December 1993 set up a Cohesion Fund to provide afinancial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure. ARTICLE 130eImplementing decisions relating to the European RegionalDevelopment Fund shall be taken by the Council, acting in accordancewith the procedure referred to in Article 189c and after consulting theEconomic and Social Committee and the Committee of the Regions. With regard to the European Agricultural Guidance and GuaranteeFund - Guidance Section, and the European Social Fund, articles 43and 125 respectively shall continue to apply. TITLE XVResearch and technological developmentARTICLE 130f1. The Community shall have the objective of strengthening thescientific and technological bases of Community industry andencouraging it to become more competitive at international level, whilepromoting all the research activities deemed necessary by virtue ofother Chapters of this Treaty. 2. For this purpose the Community shall, throughout the Community, encourage undertakings, including small and medium-sizedundertakings, research centres and universities in their research andtechnological development activities of high quality; it shall supporttheir efforts to co-operate with one another, aiming, notably, atenabling undertakings to exploit the internal market potential to thefull, in particular through the opening up of national public contracts, the definition of common standards and the removal of legal and fiscalobstacles to that co-operation. 3. All community activities under this Treaty in the area of researchand technological development, including demonstration projects, shall be decided on and implemented in accordance with theprovisions of this Title. ARTICLE 130gIn pursuing these objectives, the Community shall carry out thefollowing activities, complementing the objectives complementing theactivities carried out in the Member States:(a) implementation of research, technological development anddemonstration programmes, by promoting co-operation with andbetween undertakings, research centres and universities;(b) promotion of co-operation in the field of Community research, technological development and demonstration with third countries andinternational organizations;(c) dissemination and optimization of the results of activities inCommunity research, technological development and demonstration;(d) stimulation of the training and mobility of researchers in theCommunity. ARTICLE 130h1. The Community and the Member States shall co-ordinate theirresearch and technological development activities so as to ensurethat national policies and Community policy are mutually consistent. 2. In close co-operation with the Member States, the Commission maytake any useful initiative to promote the co-ordination referred to inparagraph 1. ARTICLE 130i1. A multiannual framework programme, setting out all activities of theCommunity, shall be adopted by the Council, acting in accordance withthe procedure referred to in Article 189b after consulting the Economicand Social Committee. The Council shall act unanimously throughoutthe procedures referred to in Article 189b. The framework programme shall:- establish the scientific and technological objectives to be achievedby the activities provided for in Article 130g and fix the relevantpriorities;- indicate the broad lines of such activities;- fix the maximum overall amount and the detailed rules forCommunity financial participation in the framework programme and therespective shares in each of the activities provided for. 2. The framework programme shall be adapted or supplemented as thesituation changes. 3. The framework programme shall be implemented through specificprogrammes developed within each activity. Each specific programmeshall define the detailed rules for implementing it, fix its duration andprovide for the means deemed necessary. The sum of the amountsdeemed necessary, fixed in the specific programmes, may not exceedthe overall maximum amount fixed for the framework programme andeach activity. 4. The Council, acting by a qualified majority on a proposal from theCommission and after consulting the European Parliament and theEconomic and Social Committee, shall adopt the specific programmes. ARTICLE 130jFor the implementation of the multiannual framework programme theCouncil shall:- determine the rules for the participation of undertakings, researchcentres and universities;- lay down the rules governing the dissemination of research results. ARTICLE 130kIn implementing the multiannual framework programmes, supplementary programmes may be decided on involving theparticipation of certain Member States only, which shall finance themsubject to possible Community participation. The Council shall adopt the rules applicable to supplementaryprogrammes, particularly as regards the dissemination of knowledgeand access by other Member States. ARTICLE 130lIn implementing the multiannual framework programme the Communitymay make provision, in agreement with the Member States concerned, for participation in research and development programmes undertakenby several Member States, including participation in the structurescreated for the execution of those programmes. ARTICLE 130mIn implementing the multiannual framework programme the Communitymay make provision for co-operation in Community research, technological development and demonstration with third countries orinternational organizations. The detailed arrangements for such co-operation may be the subject ofagreements between the Community and the third parties concerned, which shall be negotiated and concluded in accordance with Article228. ARTICLE 130nThe Community may set up joint undertakings or any other structurenecessary for the efficient execution of Community research, technological development and demonstration programmes. ARTICLE 130oThe Council, acting unanimously on a proposal from the Commissionand after consulting the European Parliament and the Economic andSocial Committee, shall adopt the provisions referred to in Article130n. The Council, acting in accordance with the procedure referred to inArticle 189c and after consulting the Economic and Social Committee, shall adopt the provisions referred to in Articles 130j to l. Adoption ofthe supplementary programmes shall require the agreement of theMember States concerned. ARTICLE 130pAt the beginning of each year the Commission shall send a report tothe European Parliament and the Council. The report shall includeinformation on research and technological development activities andthe dissemination of results during the previous year, and the workprogramme for the current year. TITLE XVIEnvironmentARTICLE 130r1. Community policy on the environment shall contribute to pursuit ofthe following objectives:- preserving, protecting and improving the quality of the environment;- protecting human health;- prudent and rational utilization of natural resources;- promoting measures at international level to deal with regional orworldwide environmental problems. 2. Community policy on the environment shall aim at a high level ofprotection taking into account the diversity of situations in the variousregions of the Community. It shall be based on the precautionaryprinciple and on the principles that preventative action should betaken, that environmental damage should as a priority be rectified atsource and that the polluter should pay. Environmental protectionrequirements must be integrated into the definition andimplementation of other Community policies. In this context, harmonization measures answering theserequirements shall include, where appropriate, a safeguard clauseallowing Member States to take provisional measures, for non-economic environmental reasons, subject to a Community inspectionprocedure. 3. In preparing its policy on the environment, the Community shall takeaccount of:- available scientific and technical data;- environmental conditions in the various regions of the Community;- the potential benefits and costs of action or lack of action;- the economic and social development of the Community as a wholeand the balanced development of its regions. 4. Within their respective spheres of competence, the Community andthe Member States shall co-operate with third countries and with thecompetent international organizations. The arrangements forCommunity co-operation may be the subject of agreements betweenthe Community and the third parties concerned, which shall benegotiated and concluded in accordance with Article 228. The previous subparagraph shall be without prejudice to MemberStates' competence to negotiate in international bodies and toconclude international agreements. ARTICLE 130s1. The Council, acting in accordance with the procedure referred to inArticle 189c and after consulting the Economic and Social Committee, shall decide what action is to be taken by the Community in order toachieve the objective referred to in Article 130r. 2. By way of derogation from the decision-making procedure providedfor in paragraph 1 and without prejudice to Article 100a, the Council, acting unanimously on a proposal from the Commission and afterconsulting the European Parliament and the Economic and SocialCommittee, shall adopt:- provisions primarily of a fiscal nature;- measures concerning town and country planning, land use with theexception of waste management and measures of a general nature, and management of water resources;- measures significantly affecting a Member State's choice betweendifferent energy sources and the general structure of its energysupply. The Council may, under the conditions laid down in the precedingsubparagraph, define those matters referred to in this paragraph onwhich decisions are to be taken by a qualified majority. 3. In other areas, general action programmes setting out priorityobjectives to be attained shall be adopted by the Council, acting inaccordance with the procedure referred to in Article 189b and afterconsulting the Economic and Social Committee. The Council, acting under the terms of paragraph 1 or paragraph 2according to the case, shall adopt the measures necessary for theimplementation of these programmes. 4. Without prejudice to certain measures of a Community nature, theMember States shall finance and implement the environment policy. 5. Without prejudice to the principle that the polluter should pay, if ameasure based on the provisions of paragraph 1 involves costsdeemed disproportionate for the public authorities of a Member State, the Council shall, in the act adopting that measure, lay downappropriate provisions in the form of:- temporary derogations and/or- financial support from the Cohesion Fund to be set up no later than31 December 1993 pursuant to Article 130d. ARTICLE 130tThe protective measures adopted pursuant to Article 130s shall notprevent any Member State from maintaining or introducing morestringent protective measures. Such measures must be compatiblewith this Treaty. They shall be notified to the Commission. TITLE XVIIDevelopment co-operationARTICLE 130u1. Community policy in the sphere of development co-operation, whichshall be complementary to the policies pursued by the Member States, shall foster:- the sustainable economic and social development of the developingcountries, and more particularly the most disadvantaged among them;- the smooth and gradual integration of the developing countries intothe world economy;- the campaign against poverty in the developing countries. 2. Community policy in this area shall contribute to the generalobjective of developing and consolidating democracy and the rule oflaw, and to that of respecting human rights and fundamental freedoms. 3. The Community and the Member State shall comply with thecommitments and take account of the objectives they have approvedin the context of the United Nations and other competent internationalorganizations. ARTICLE 130vThe Community shall take account of the objectives referred to inArticle 130u in the policies that it implements which are likely to affectdeveloping countries. ARTICLE 130w1. . Without prejudice to the other provisions in this Treaty the Council, acting in accordance with the procedure referred to in Article 189c, shall adopt the measures necessary to further the objectives referredto in Article 130u. Such measures may take the form of multiannualprogrammes. 2. The European Investment Bank shall contribute, under the termslaid down in its Statute, to the implementation of the measuresreferred to in paragraph 1. 3. The provisions of this Article shall not affect co-operation with theAfrican, Caribbean and Pacific countries in the framework of the ACP-EEC Convention. ARTICLE 130x1. The Community and the Member States shall co-ordinate theirpolicies on development co-operation and shall consult each other ontheir aid programmes, including in international organizations andduring international conferences. They may undertake joint action. Member States shall contribute if necessary to the implementation ofCommunity aid programmes. 2. The Commission may take any useful initiative to promote the co-ordination referred to in paragraph 1. ARTICLE 130yWithin their respective spheres of competence, the Community andthe Member States shall co-operate with third countries and with thecompetent international organizations. The arrangements forCommunity co-operation may be the subject of arrangements betweenthe Community and the third parties concerned, which shall benegotiated and concluded in accordance with Article 228. The previous paragraph shall be without prejudice to Members States'competence to negotiate in international bodies and to concludeinternational agreements. "E. In Part Five "Institutions of the Community"39) Article 137 shall be replaced by the following:"ARTICLE 137The European Parliament, which shall consist of representatives of thepeoples of the States brought together in the Community, shallexercise the powers conferred upon it by this Treaty. "40) Paragraph 3 of Article 138 shall be replaced by the following:"3. The European Parliament shall draw up proposals for elections bydirect universal suffrage in accordance in accordance with a uniformprocedure in all Member States. The Council shall, acting unanimously after obtaining the assent of theEuropean Parliament, which shall act by a majority of its componentmembers, lay down the appropriate provision, which it shallrecommend to Member States for adoption in accordance with theirrespective constitutional requirements. "41) The following Article shall be inserted:"ARTICLE 138aPolitical parties at European level are important as a factor forintegration within the Union. They contribute to forming a Europeanawareness and to expressing the political will of the citizens of theUnion. ARTICLE 138bIn so far as provided in this Treaty, the European Parliament shallparticipate in the process leading up to the adoption of Communityacts by exercising its powers under the procedures laid down inArticles 189b and 189c and by giving its assent or delivering advisoryopinions. The European Parliament may, acting by a majority of its members, request the Commission to submit any appropriate proposal onmatters on which it considers that a Community act is required for thepurpose of implementing this Treaty. ARTICLE 138cIn the course of its duties, the European Parliament may, at therequest of a quarter of its members, set up a temporary Committee ofInquiry to investigate, without prejudice to the powers conferred bythis Treaty on other institutions or bodies, alleged contraventions ormaladministration in the implementation of Community law, exceptwhere the alleged facts are being examined before a court and whilethe case is still subject to legal proceedings. The temporary Committee of Inquiry shall cease to exist on thesubmission of its report. The detailed provisions governing the exercise of the right of inquiryshall be determined by common accord of the European Parliament, the Council and the Commission. ARTICLE 138dAny citizen of the Union, and any natural or legal person residing orhaving his registered office in a Member State, shall have the right toaddress, individually or in association with other citizens or persons, a petition to the European Parliament on a matter which comes withinthe Community's fields of activity and which affects him, her or itdirectly. ARTICLE 138e1. The European Parliament shall appoint an Ombudsman empoweredto receive complaints from any citizen of the Union or any natural orlegal person residing or having its registered office in a Member Stateconcerning instances of maladministration in the activities of theCommunity institutions or bodies, with the exception of the Court ofJustice and the Court of First Instance acting in their judicial role. In accordance with his duties, the Ombudsman shall conduct inquiriesfor which he finds grounds, either on his own initiative or on the basisof complaints submitted to him direct or through a member of theEuropean Parliament, except where the alleged facts are or have beenthe subject of legal proceedings. Where the Ombudsman establishesan instance of maladministration, he shall refer the matter to theinstitution concerned, which shall have a period of three months inwhich to inform him of its views. The Ombudsman shall then forward areport to the European Parliament and the institution concerned. Theperson lodging the complaint shall be informed of the outcome of suchinquiries. The Ombudsman shall submit an annual report to the EuropeanParliament on the outcome of his inquiries. 2. The Ombudsman shall be appointed after each election of theEuropean Parliament for the duration of its term of office. TheOmbudsman shall be eligible for reappointment. The Ombudsman may be dismissed by the Court of Justice at therequest at the request of the European Parliament if he no longerfulfils the conditions required for the performance of this duties or if heis guilty of serious misconduct. 3. The Ombudsman shall be completely independent in theperformance of his duties. In the performance of those duties he shallseek nor take instructions from any body. The Ombudsman may not, during his term of office, engage in any other occupation, whethergainful or not. 4. The European Parliament shall, after seeking an opinion from theCommission and with the approval of the Council acting by a qualifiedmajority, lay down the regulations and general conditions governingthe Ombudsman's duties. "42) The second subparagraph of Article 144 shall be supplemented bythe following sentence:"In this case, the term of office of the members of the Commissionappointed to replace them shall expire on the date which the term ofoffice of the members of the Commission obliged to resign as a bodywould have expired. "43) The following Article shall be inserted:"ARTICLE 146The Council shall consist of a representative of each Member State atministerial level, authorized to commit the government of that MemberState. The office of President shall be held in turn by each Member State inthe Council for a term of six months, in the following order of MemberStates:- for a first cycle of six years: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Portugal, United Kingdom;- for the following cycle of six years: Denmark, Belgium, Greece, Germany, France, Spain, Italy, Ireland, Netherlands, Luxembourg, United Kingdom, Portugal. 44) The following Article shall be inserted:"ARTICLE 147The Council shall meet when convened by its President on hisinitiative or at the request of one of its members or of theCommission. "45) Article 149 shall be repealed. 46) The following Article shall be inserted:"ARTICLE 1511. A committee consisting of the Permanent Representatives of theMember States shall be responsible for preparing the work of theCouncil and for carrying out the tasks assigned to it by the Council. 2. The Council shall be assisted by a General Secretariat, under thedirection of a Secretary-General. The Secretary-General shall beappointed by the Council acting unanimously. The Council shall decide on the organization of the GeneralSecretariat. 3. The Council shall adopt its rules of procedure. "47) The following Article shall be inserted:"ARTICLE 154The Council shall, acting by a qualified majority, determine thesalaries, allowances and pensions of the President and members ofthe Commission, and of the president, Judges, Advocates-General andRegistrar of the Court of Justice. It shall also, again by a qualifiedmajority, determine any payment to be made instead of remuneration. "48) The following Articles shall be inserted:"ARTICLE 156The Commission shall publish annually, not later than one monthbefore the opening of the session of the European Parliament, ageneral report on the activities of the Community. ARTICLE 1571. The Commission shall consist of seventeen members, who shall bechosen on the grounds of their general competence and whoseindependence is beyond doubt. The number of members of the Commission may be altered by theCouncil, acting unanimously. Only nationals of Member States may be members of the Commission. The Commission must include at least one national of each of theMember States, but may not include more than two members havingthe nationality of the same State. 2. The members of the Commission shall, in the general interest of theCommunity, be completely independent in the performance of theirduties. In the performance of these duties, they shall neither seek nor takeinstructions from any government or from any other body. They shallrefrain from any action incompatible with their duties. Each MemberState undertakes to respect this principle and not to seek to influencethe members of the Commission in the performance of their tasks. The members of the Commission may not, during their term of office, engage in any other occupation, whether gainful or not. When enteringupon their duties they shall give a solemn undertaking that, bothduring and after their term of office, they will respect the obligationsarising therefrom and in particular their duty to behave with integrityand discretion as regards the acceptance, after they have ceased tohold office, of certain appointments or benefits. In the events of anybreach of these obligations, the Court of Justice may, on applicationby the Council or the Commission, rule that the member concerned be, according to the circumstances, either compulsorily retired inaccordance with Article 160 or deprived of his rights to a pension orbenefits in its stead. ARTICLE 1581. The members of the Commission shall be appointed, in accordancewith the procedure referred to in paragraph 2, for a period of fiveyears, subject, if need be, to Article 144. Their term of office shall be renewable. 2. The governments of the Member States shall nominate by commonaccord, after consulting the European Parliament, the person theyintend to appoint as President of the Commission. The governments of the Member States shall, in consultation with thenominee for President, nominate the other persons whom they intendto appoint as members of the Commission. The President and the other members of the Commission thusnominated shall be subject as a body to a vote of approval by theEuropean Parliament. After approval by the European parliament, thePresident and the other members of the Commission shall beappointed by common accord of the governments of the MemberStates. 3. Paragraphs 1 and 2 shall be applied for the first time to thePresident and the other members of the Commission whose term ofoffice begins on 7 January 1995. The president and the other members of the Commission whose termof office begins on 7 January 1993 shall be appointed by commonaccord of the governments of the Member States. Their term of officeshall expire on 6 January 1995. ARTICLE 159Apart from normal replacement, or death, the duties of a member of theCommission shall end when he resigns or is compulsorily retired. The vacancy thus caused shall be filled for the remainder of themember's term of office by a new member appointed by commonaccord of the governments of the Member States. The Council may, acting unanimously, decide that such a vacancy need not be filled. In the event of resignation, compulsory retirement or death, thePresident shall be replaced for the remainder of his term of office. Theprocedure laid down in Article 158(2) shall be applicable for thereplacement of the President. Save in the case of compulsory retirement under Article 160, membersof the Commission shall remain in office until they have beenreplaced. ARTICLE 160If any member of the Commission no longer fulfills the conditionsrequired for the performance of his duties or if he has been guilty ofserious misconduct, the Court of Justice may, on application by theCouncil or the Commission, compulsorily retire him. ARTICLE 161The Commission may appoint a Vice-President or two Vice-Presidentsfrom among its members. ARTICLE 1621. The Council and the Commission shall consult each other and shallsettle by common accord their methods of co-operation. 2. The Commission shall adopt its rules of procedure so as to ensurethat both it and its departments operate in accordance with theprovisions of this Treaty. It shall ensure that these rules arepublished. ARTICLE 163The Commission shall act by a majority of the number of membersprovided for in Article 157. A meeting of the Commission shall be valid only if the number ofmembers laid down in its rules of procedure is present. "49) Article 165 shall be replaced by the following:"ARTICLE 165The Court of Justice shall consist of thirteen judges. The Court of Justice shall sit in plenary session. It may, however, formchambers each consisting of three of five judges, either to undertakecertain preparatory inquiries or to adjudicate on particular categoriesof cases in accordance with rules laid down for these purposes. The Court of Justice shall sit in plenary session when a Member Stateor a Community institution that is a party to the proceedings sorequests. Should the Court of Justice so request, the Council may, actingunanimously, increase the number of judges and make necessaryadjustments to the second and third paragraphs of this Article and tothe second of Article 167. "50) Article 168a shall be replaced by the following:"ARTICLE 168a1. The Court of First Instance shall be attached to the Court of Justicewith jurisdiction to hear and determine at first instance, subject to aright of appeal to the Court of Justice on points of law only and inaccordance with the conditions laid down by Statute, certain classes ofaction or proceeding defined in accordance with the conditions laiddown in paragraph 2. The Court of First Instance shall not becompetent to hear and determine questions referred for a preliminaryruling under Article 177. 2. At the request of the Court of Justice and after consulting theEuropean Parliament and the Commission, the Council, actingunanimously, shall determine the classes of action or proceedingreferred to in paragraph 1 and the composition of the Court of FirstInstance and shall adopt the necessary adjustments and additionalprovisions to the Statute of the the Court of Justice. Unless the Councildecides otherwise, the provisions of this Treaty relating to the Court ofJustice, in particular the provisions of the Protocol on the Statute of theCourt of Justice, shall apply to the Court of First Instance. 3. The members of the Court of First Instance shall be chosen frompersons whose independence is beyond doubt and who possess theability required for appointment to judicial office; they shall beappointed by common accord of the governments of the MemberStates for a term of six years. The membership shall be partiallyrenewed every three years. Retiring members shall be eligible for re-appointment. 4. The Court of First Instance shall establish its rules of procedure inagreement with the Court of Justice. Those rules shall require theunanimous approval of the Council. "51) Article 171 shall be replaced by the following:"ARTICLE 1711. If the Court of Justice finds that a Member State has failed to fulfil anobligation under this Treaty, the State shall be required to take thenecessary measures to comply with the judgment of the Court ofJustice. 2. If the Commission considers that the Member State concerned hasnot taken such measures it shall, after giving that State the opportunityto submit its observations, issue a reasoned opinion specifying thepoints on which the Member State concerned has not complied withthe judgment of the Court of Justice. If the Member State concerned fails to take the necessary measures tocomply with the Court's judgment within the time-limit laid down by theCommission, the latter may bring the case before the Court of Justice. In so doing it shall specify the amount of lump sum or penaltypayment to be paid by the Member State concerned which it considersappropriate in the circumstances. If the Court of Justice finds that the Member State concerned has notcomplied with its judgment it may impose a lump sum or penaltypayment on it. This procedure shall be without prejudice to Article 170. "52) Article 172 shall be replaced by the following:"ARTICLE 172Regulations adopted jointly by the European Parliament and theCouncil, and by the Council, pursuant to the provisions of this Treaty, may give the Court of Justice unlimited jurisdiction with regard to thepenalties provided for in such regulations. "53) Article 173 shall be replaced by the following:"ARTICLE 173The Court of Justice shall review the legality of acts adopted jointly bythe European Parliament and the Council, of acts of the Council, of theCommission and of the ECB, other than recommendations andopinions, and of acts of the European Parliament intended to producelegal effects vis-a-vis third parties. It shall for this purpose have jurisdiction in actions brought by aMember State, the Council or the Commission on grounds of lack ofcompetence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to itsapplication, or misuse of powers. The Court shall have jurisdiction under the same conditions, in actionsbrought by the European Parliament and by the ECB for the purpose ofprotecting their prerogatives. Any natural or legal person may, under the same conditions, instituteproceedings against a decision addressed to that person or against adecision which, although in the form of a regulation or a decisionaddressed to another person, is of direct and individual concern to theformer. The proceedings provided for in this Article shall be instituted withintwo months of the publication of the measure, or of its notification tothe plaintiff, or, in the absence thereof, of the day on which it came tothe knowledge of the latter, as the case may be. "54) Article 175 shall be replaced by the following:"ARTICLE 175Should the European Parliament, the Council or the Commission, ininfringement of this Treaty, fail to act, The Member States and theother institutions of the Community may bring an action before theCourt of Justice to have the infringement established. The action shall be admissible only if the institution concerned hasfirst been called upon to act. If, within two months of being so calledupon, the institution concerned has not defined its position, the actionmay be brought within a further period of two months. Any natural or legal person may, under the conditions laid down in thepreceding paragraphs, complain to the Court of Justice that aninstitution of the Community has failed to address to that person anyact other than a recommendation or an opinion. The Court of Justice shall have jurisdiction, under the sameconditions, in actions or proceedings brought by the ECB in the areasfalling within the latter's field of competence and in actions orproceedings brought against the latter. "55) Article 176 shall be replaced by the following:"ARTICLE 176The institution or institutions whose act has been declared void orwhose failure to act has been declared contrary to this Treaty shall berequired to take the necessary measures to comply with the judgmentof the Court of Justice. This obligation shall not affect any obligation which may result fromthe application of the second paragraph of Article 215. This Article shall also apply to the ECB. "56) Article 177 shall be replaced by the following:"ARTICLE 177The Court of Justice shall have jurisdiction to give preliminary rulingsconcerning:(a) the interpretation of the Treaty;(b) the validity and interpretation of acts of the institutions of theCommunity and of the ECB;(c) the interpretation of the statutes of bodies established by an act ofthe Council, where those statutes so provide. Where such a question is raised before any court or tribunal of aMember State, that Court of tribunal may, if it considers that a decisionon the question is necessary to enable it to give judgment, request theCourt of Justice to give a ruling thereon. Where any such question is raised in a case pending before a court ortribunal of a Member State against whose decisions there is nojudicial remedy under national law, the court or tribunal shall bring thematter before the Court of Justice. "57) Article 180 shall be replaced by the following:"ARTICLE 180The Court of Justice shall, within the limits hereinafter laid down, havejurisdiction in disputes concerning:(a) the fulfillment by Member States of obligations under the Statute ofthe European Investment Bank. In this connection, the Board ofDirectors of the Bank shall enjoy the powers conferred upon theCommission by Article 169;(b) measures adopted by the Board of Governors of the EuropeanInvestment Bank. In this connection, any Member State, theCommission of the Board of Directors of the Bank may instituteproceedings under the conditions laid down in Article 173;(c) measures adopted by the Board of Directors of the EuropeanInvestment Bank. Proceedings against such measures may beinstituted only by Member States or by the Commission, under theconditions laid down in Article 173, and solely on the grounds of non-compliance with the procedure provided for in Article 21(2), (5), (6) and(7) of the Statute of the Bank;(d) the fulfillment by the national central banks of obligations underthis Treaty and the Statute of the ESCB. In this connection the powersof the Council of the ECB in respect of national central banks shall bethe same as those conferred upon the commission in respect ofMember States by Article 169. If the Court of Justice finds that anational central bank has failed to fulfill an obligation under thisTreaty, that bank shall be required to take the necessary measures tocomply with the judgment of the Court of Justice. "58) Article 184 shall be replaced by the following:"ARTICLE 184Notwithstanding the expiry of the period laid down in the fifthparagraph of Article 173, any party may, in proceedings in which aregulation adopted jointly by the European Parliament and the Council, or a regulation of the Council, of the Commission, or of the ECB is atissue, plead the grounds specified in the second paragraph of Article173 in order to invoke before the Court of Justice the inapplicability ofthat regulation. "59) The following section shall be inserted:"SECTION 5THE COURT OF AUDITORSARTICLE 188aThe Court of Auditors shall carry out the audit. ARTICLE 188b1. The Court of Auditors shall consist of twelve members. 2. The members of the Court of Auditors shall be chosen from amongpersons who belong or have belonged in their respective countries toexternal audit bodies or who are especially qualified for this office. Their independence must be beyond doubt. 3. The members of the Court of Auditors shall be appointed for a termof six years by the Council, acting unanimously after consulting theEuropean Parliament. However, when the first appointments are made, four members of theCourt of Auditors, chosen by lot, shall be appointed for a term of officeof four years only. The members of the Court of Auditors shall be eligible forreappointment. They shall elect the President of the Court of Auditors from among theirnumber for a term of three years. The President may be re-elected. 4. The members of the Court of Auditors shall, in the general interest ofthe Community, be completely independent in the performance of theirduties. In the performance of these duties, they shall neither seek nor takeinstructions from any government or from any other body. They shallrefrain from any action incompatible with their duties. 5. The members of the Court of Auditors may not, during their term ofoffice, engage in any other occupation, whether gainful or not. Whenentering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect theobligations arising therefrom and in particular their duty to behavewith integrity and discretion as regards the acceptance, after theyhave ceased to hold office, of certain appointments or benefits. 6. Apart from normal replacement, or death, the duties of a member ofthe Court of Auditors shall end when he resigns, or is compulsorilyretired by a ruling of the Court of Justice pursuant to paragraph 7. The vacancy thus caused shall be filled for the remainder of themember's term of office. Save in the case of compulsory retirement, members of the Court ofAuditors shall remain in office until they have been replaced. 7. A member of the Court of Auditors may be deprived of his office or ofhis right to a pension or other benefits in its stead only if the Court ofJustice, at the request of the Court of Auditors, finds that he no longerfulfills the requisite conditions or meets the obligations arising fromhis office. 8. The Council, acting by a qualified majority, shall determine theconditions of employment of the President and the members of theCourt of Auditors and in particular their salaries, allowances andpensions. It shall also, by the same majority, determine any paymentto be made instead of remuneration. 9. The provisions of the Protocol on the Privileges and Immunities ofthe European Communities applicable to the Judges of the Court ofJustice shall also apply to the members of the Court of Auditors. ARTICLE 188c1. The Court of Auditors shall examine the accounts of all revenue andexpenditure of the Community. It shall also examine the accounts ofall revenue and expenditure of all bodies set up by the Community inso far as the relevant constituent instrument does not preclude suchexamination. The Court of Auditors shall provide the European Parliament and theCouncil with a statement of assurance as to the reliability of theaccounts and the legality and regularity of the underlying transactions. 2. The Court of Auditors shall examine whether all revenue has beenreceived and all expenditure incurred in a lawful and regular mannerand whether the financial arrangement has been sound. The audit of revenue shall be carried out on the basis both of theamounts established as due and the amounts actually paid to theCommunity. The audit of expenditure shall be carried out on the basis both ofcommitments undertaken and payments made. These audits may be carried out before the closure of accounts for thefinancial year in question. 3. The audit shall be based on records and, if necessary, performedon the spot in other institutions of the Community and in the MemberStates. In the Member States the audit shall be carried out in liaisonwith the national audit bodies or, if these do not have the necessarypowers, with the competent national departments. These bodies ordepartments shall inform the Court of Auditors whether they intend totake part in the audit. The other institutions of the Community and the national audit bodiesor, if these do not have the necessary powers, the competent nationaldepartments, shall forward to the Court of Auditors, at its request, anydocument or information necessary to carry out its task. 4. The Court of Auditors shall draw up an annual report after the closeof each financial year. It shall be forwarded to the other institutions ofthe Community and shall be published, together with the replies ofthese institutions to the observations of the Court of Auditors, in theOfficial Journal of the European Communities. The Court of Auditors may also, at any time, submit observations, particularly in the form of special reports, on specific questions anddeliver opinions at the request of one of the other institutions of theCommunity. It shall adopt its annual reports, special reports or opinions by amajority of its members. It shall assist the European Parliament and the Council in exercisingtheir powers of control over the implementation of the budget. "60) Article 189 shall be replace by the following:"ARTICLE 189In order to carry out their task and in accordance with the provisions ofthe Treaty, the European Parliament acting jointly with the Council, theCouncil and the Commission shall make regulations and issuedirectives, take decision, make recommendations or deliver opinions. A regulation shall have general application. It shall be binding in itsentirety and directly applicable in all Member States. A directive shall be binding, as to the result to be achieved, upon eachMember State to which it is addressed, but shall leave to the nationalauthorities the choice of form and methods. A decision shall be binding in its entirety upon those to whom it isaddressed. Recommendations and opinions shall have no binding force. "61) The following Articles shall be inserted:"ARTICLE 189a1. Where, in pursuance of the Treaty, the Council acts on a proposalfrom the Commission, unanimity shall be required for an actconstituting an amendment to that proposal, subject to Article 189b(4)and (5). 2. As long as the Council has not acted, the Commission may alter itsproposal at any time during the procedures leading to the adoption ofa Community act. ARTICLE 189b1. Where reference is made in the Treaty to this Article for the adoptionof an act, the following procedures shall apply. 2. The Commission shall submit a proposal to the EuropeanParliament and the Council. The Council, acting by a qualified majority after obtaining the opinionof the European Parliament, shall adopt a common position. Thecommon position shall be communicated to the European Parliament. The Council shall inform the European Parliament fully of the reasonswhich led it to adopt its common position. The Commission shallinform the European Parliament fully of its position. If, within three months of such communication, the EuropeanParliament:(a) approves the common position, the Council shall definitively adoptthe act in question in accordance with that common position;(b) has not taken a decision, the Council shall adopt the act in questionin accordance with its common position;(c) indicates, by an absolute majority of its component members, thatit intends to reject the common position, it shall immediately informthe Council. The Council may convene a meeting of the ConciliationCommittee referred to in paragraph 4 to explain further its position. The European parliament shall thereafter either confirm, by anabsolute majority of its component members, its rejection of thecommon position, in which event the proposed act shall be deemednot to have been adopted, or propose amendments in accordance withsubparagraph (d) of this paragraph;(d) proposes amendments to the common position by an absolutemajority of its component members, the amended text shall beforwarded to the Council and to the Commission which shall deliver anopinion on those amendments. 3. If, within three months of the matter being referred to it, the Councilaction by a qualified majority, approves all the amendments of theEuropean parliament, it shall amend its common position accordinglyand adopt the act in question; however, the Council shall actunanimously on the amendments on which the Commission hasdelivered a negative opinion. If the Council does not approve the act inquestion, the President of the Council, in agreement with the Presidentof the European Parliament, shall forthwith convene a meeting of theConciliation Committee. 4. The Conciliation Committee, which shall be composed of themembers of the Council or their representatives and an equal numberof representative of the European Parliament, shall have the task ofreaching agreement on a joint text, by a qualified majority of themembers of the Council or their representatives and by a majority ofthe representatives of the European Parliament. The Commissionshall take part in the Conciliation Committee's proceedings and shalltake all the necessary initiatives with a view to reconciling thepositions of the European Parliament and the Council. 5. If within six weeks of its being convened, the ConciliationCommittee approves a joint text, the European Parliament, acting byan absolute majority of the votes cast, and the Council, acting by aqualified majority, shall have a period of six weeks from that approvalin which to adopt the act in question in accordance with the joint text. Ifone of the two institutions fails to approve the proposed act, it shall bedeemed not to have been adopted. 6. Where the Conciliation Committee does not approve a joint text, theproposed act shall be deemed not to have been adopted unless theCouncil, acting by a qualified majority within six weeks of expiry of theperiod granted to the Conciliation Committee, confirms the commonposition to which it agreed before the conciliation procedure wasinitiated, possibly with the amendments proposed by the EuropeanParliament. In this case, the act in question shall be finally adoptedunless the European parliament, within six weeks of the date ofconfirmation by the Council, rejects the text by an absolute majority ofits component members, in which case the proposed act shall bedeemed not to have been adopted. 7. The periods of three months and six weeks referred to in this Articlemay be extended by a maximum of one month and two weeksrespectively by common accord of the European Parliament and theCouncil. The period of three months referred to in paragraph 2 shall beautomatically extended by two months where paragraph 2(c) applies. 8. The scope of the procedure under this Article may be widened, inaccordance with the procedure provided for in Article N(2) of the Treatyon European Union, on the basis of a report to be submitted to theCouncil by the Commission by 1996 at the latest. ARTICLE 189cWhere reference is made in this Treaty to this Article for the adoptionof an act, the following procedure shall apply:(a) The Council, acting by a qualified majority on a proposal from theCommission and after obtaining the opinion of the EuropeanParliament, shall adopt a common position. (b) The Council's common position shall be communicated to theEuropean Parliament. The Council and the Commission shall informthe European Parliament fully of the reasons which led the Council toadopt its common position and also of the Commission's position. If, within three months of such communication, the EuropeanParliament approves this common position or has not taken a decisionwithin that period, the Council shall definitively adopt the act inquestion in accordance with the common position. (c) The European Parliament may, within the period of three monthsreferred to in point (b), by an absolute majority of its componentmembers, propose amendments to the Council's common position. The European Parliament may also, by the same majority, reject theCouncil's common position. The result of the proceedings shall betransmitted to the Council and the Commission. If the European Parliament has rejected the Council's commonposition, unanimity shall be required for the Council to act on a secondreading. (d) The Commission shall, within a period of one month, re-examinethe proposal on the basis of which the Council adopted its commonposition, by taking into account the amendments proposed by theEuropean Parliament. The Commission shall forward to the Council, at the same time as itsre-examined proposal, the amendments of the European Parliamentwhich it has not accepted, and shall express its opinion on them. TheCouncil may adopt these amendments unanimously. (e) The Council, acting by a qualified majority, shall adopt the proposalas re-examined by the Commission. Unanimity shall be required for the Council to amend the proposal asre-examined by the Commission. (f) In the cases referred to in points (c), (d) and (e), the Council shall berequired to act within a period of three months. If no decision is takenwithin this period, the commission proposal shall be deemed not tohave been adopted. (g) The periods referred to in points (b) and (f) may be extended by amaximum of one month by common accord between the Council andthe European Parliament. "62) Article 190 shall be replaced by the following:"ARTICLE 190Regulations, directives and decisions adopted jointly by the EuropeanParliament and the Council, and such acts adopted by the Council orthe Commission, shall state the reasons on which they are based andshall refer to any proposals or opinions which were required to beobtained pursuant to this Treaty. "63) Article 191 shall be replaced by the following:"ARTICLE 1911. Regulations, directives and decisions adopted in accordance withthe procedures referred to in Article 189b shall be signed by thePresident of the European Parliament and by the President of theCouncil and published in the Official Journal of the Community. Theyshall enter into force on the date specified in them or, in the absencethereof, on the twentieth day following that of their publication. 2. Regulations of the Council and of the Commission, as well asdirectives of those institutions which are address to all MemberStates, shall be published in the Official Journal of the Community. They shall enter into force on the date specified in them or, in theabsence thereof, on the twentieth day following that of theirpublication. 3. Other directives, and decisions, shall be notified to those whomthey are address and shall take effect upon such notification. "64) Article 194 shall be replaced by the following:"ARTICLE 194The number of members of the Economic and Social Committee shallbe as follows:Belgium 12Denmark 9Germany 24Greece 12Spain 21France 24Ireland 9Italy 24Luxembourg 6Netherlands 12Portugal 12United Kingdom 24The members of the Committee shall be appointed by the Council, acting unanimously, for four years. Their appointments shall berenewable. The members of the Committee may not be bound by any mandatoryinstructions. They shall be completely independent in the performanceof their duties, in the general interest of the Community. The Council, acting by a qualified majority, shall determine theallowances of members of the Committee. "65) Article 196 shall be replaced by the following:"ARTICLE 196The Committee shall elect its chairman and officers from among itsmembers for a term of two years. It shall adopt its rules of procedure. The Committee shall be convened by its chairman at the request of theCouncil or of the Commission. It may also meet on its own initiative. "66) Article 198 shall be replaced by the following:"ARTICLE 198The Committee must be consulted by the Council of the Commissionwhere this Treaty so provides. The Committee may be consulted bythese institutions in all cases in which they consider it appropriate. Itmay issue an opinion on its own initiative in cases in which itconsiders such action appropriate. The Council or the Commission shall, if it considers it necessary, setthe Committee, for the submission of its opinion, a time limit whichmay not be less than one month from the date on which the chairmanreceives notification to this effect. Upon expiry of the time limit, theabsence of an opinion shall not prevent further action. The opinion of the Committee and that of the specialized section, together with a record of the proceedings, shall be forwarded to theCouncil and to the Commission. 67) The following Chapter shall be inserted: "CHAPTER 4THE COMMITTEE OF THE REGIONSARTICLE 198aA Committee consisting of representatives of regional and localbodies, hereinafter referred to as "the Committee of the Regions", ishereby established with advisory status. The number of members of the Committee of the Regions shall be asfollows:Belgium 12Denmark 9Germany 24Greece 12Spain 21France 24Ireland 9Italy 24Luxembourg 6Netherlands 12Portugal 12United Kingdom 24The members of the Committee and an equal number of alternatemembers shall be appointed for four years by the Council actingunanimously on proposals from the respective Member States. Theirterm of office shall be renewable. The members of the Committee may not be bound by any mandatoryinstructions. They shall be completely independent in the performanceof their duties, in the general interest of the Community. ARTICLE 198bThe Committee of the Regions shall elect its chairman and officersfrom among its members for a term of two years. It shall adopt its rules of procedure and shall submit them for approvalto the Council, acting unanimously. The Committee shall be convened by its chairman at the request of theCouncil or of the Commission. It may also meet on its own initiative. ARTICLE 198cThe Committee of the Regions shall be consulted by the Council or bythe Commission where this Treaty so provides and in all other casesin which one of these two institutions considers it appropriate. The Council of the Commission shall, if it considers it necessary, setthe Committee, for the submission of its opinion, a time-limit whichmay not be less than one month from the date on which the chairmanreceives notification to this effect. Upon expiry of the time-limit theabsence of an opinion shall not prevent further action. Where the Economic and Social Committee is consulted pursuant toArticle 198, the Committee of the Regions shall be informed by theCouncil of the Commission of the request for an opinion. Where itconsiders that specific regional interests are involved, the Committeeof the Regions may issue an opinion on the matter. It may issue an opinion on its own initiative in cases in which itconsiders such action appropriate. The opinion of the Committee, together with a record of theproceedings, shall be forwarded to the Council and to theCommission. "68) The following chapter shall be inserted: "CHAPTER 5EUROPEAN INVESTMENT BANKARTICLE 198dThe European Investment Bank shall have legal personality. The members of the European Investment Bank shall be the MemberStates. The Statute of the European Investment Bank is laid down in aProtocol annexed to this Treaty. ARTICLE 198eThe task of the European Investment Bank shall be to contribute, byhaving recourse to the capital market and utilizing its own resources, to the balanced and steady development of the common market in theinterest of the Community. For this purpose the Bank shall, operatingon a non-profit-making basis, grant loans and give guarantees whichfacilitate the financing of the following projects in all sectors of theeconomy:(a) projects for developing less-developed regions;(b) projects for modernizing or converting undertakings or fordeveloping fresh activities called for by the progressive establishmentof the common market, where these projects are of such a size ornature that they cannot be entirely financed by the various meansavailable in the individual Member States;(c) projects of common interest to several Member States which are ofsuch a size or nature that they cannot be entirely financed by thevarious means available in the individual Member States. In carrying out its task, the Bank shall facilitate the financing ofinvestment programmes in conjunction with assistance from thestructural Funds and other Community Financial instruments. "69) Article 199 shall be replaced by the following:"ARTICLE 199All items of revenue and expenditure of the Community, includingthose relating to the European Social Fund, shall be included inestimates to be drawn up for each financial year and shall be shown inthe budget. Administrative expenditure occasioned for the institutions by theprovisions of the Treaty on European Union relating to commonforeign and security policy and to co-operation in the fields of justiceand home affairs shall be charged to the budget. The operationalexpenditure occasioned by the implementation of the said provisionsmay, under the conditions referred to therein, be charged to thebudget. The revenue and expenditure shown in the budget shall be inbalance. "70) Article 200 shall be repealed. 71) Article 201 shall be replaced by the following:"ARTICLE 201Without prejudice to other revenue, the budget shall be financedwholly from own resources. The Council, acting unanimously on a proposal from the Commissionand after consulting the European Parliament, shall lay downprovisions relating to the system of own resources of the Community, which it shall recommend to the Member States for adoption inaccordance with their respective constitutional requirements. "72) The following Article shall be inserted:"ARTICLE 201aWith a view to maintaining budgetary discipline, the Commission shallnot make any proposal for a Community act, or alter its proposals, oradopt any implementing measure which is likely to have appreciableimplications for the budget without providing the assurance that theproposal or that measure is capable of being financed within the limitof the Community's own resources arising under provisions laid downby the Council pursuant to Article 201. "73) Article 205 shall be replaced by the following;"ARTICLE 205The Commission shall implement the budget, in accordance with theprovisions of the regulations made pursuant to Article 209, on its ownresponsibility and within the limits of the appropriations, havingregard tot he principles of sound financial management. The regulations shall lay down detailed rules for each institutionconcerning its part in effecting its own expenditure. Within the budget, the Commission may, subject to the limits andconditions laid down in the regulations made pursuant to Article 209, transfer appropriations from one chapter to another or from onesubdivision to another. "74) Article 206 shall be replaced by the following:"ARTICLE 2061. The European Parliament, acting on a recommendation from theCouncil which shall act by qualified majority, shall give a discharge tothe Commission in respect of the implementation of the budget. To thisend, the Council and the European Parliament in turn shall examinethe accounts and the financial statement referred to in Article 205a, theannual report by the Court of Auditors together with the replies of theinstitutions under audit to the observations of the Court of Auditors andany relevant special reports by the Court of Auditors. 2 Before giving a discharge to the Commission, or for any otherpurpose in connection with the exercise of its power over theimplementation of the budget, the European Parliament may ask tohear the Commission give evidence with regard to the execution ofexpenditure or the operation of financial control systems. TheCommissions shall submit any necessary information to the EuropeanParliament at the latter's request. 3. The Commission shall take all appropriate steps to act on theobservations in the decisions giving discharge and on otherobservations by the European Parliament relating to the execution ofexpenditure, as well as on comments accompanying therecommendations on discharge adopted by the Council. At the request of the European Parliament or the Council, theCommission shall report on the measures taken in the light of theseobservations and comments and in particular on the instructions givento the departments which are responsible for the implementation of thebudget. These reports shall also be forwarded to the Court ofAuditors. "75) Articles 206a and 206b shall be repealed. 76) Article 209 shall be replaced by the following:"ARTICLE 209The Council, acting unanimously on a proposal from the Commissionand after consulting the European Parliament and obtaining theopinion of the Court of Auditors, shall:(a) make Financial Regulations specifying in particular the procedureto be adopted for establishing and implementing the budget and forpresenting and auditing accounts;(b) determine the methods and procedure whereby the budget revenueprovided under the arrangements relating to the Community's ownresources shall be made available to the Commission, and determinethe measures to be applied, if need be, to meet cash requirements;(c) lay down rules concerning the responsibility of financial controllers, authorizing officers and accounting officers, and concerningappropriate arrangements for inspection. "77) The following article shall be inserted:"ARTICLE 209aMember States shall take the same measures to counter fraudaffecting the financial interests of the Community as they take tocounter fraud affecting their own financial interests. Without prejudice to the other provisions of the Treaty, Member Statesshall co-ordinate their action aimed at protecting the financial interestsof the Community against fraud. To this end they shall organize, withthe help of the Commission, close and regular co-operation betweenthe competent departments of their administrations. "78) Article 215 shall be replaced by the following:"ARTICLE 215The contractual liability of the Community shall be governed by thelaw applicable to the contract in question. In the case of non-contractual liability, the Community shall, inaccordance with the general principles common to the law of theMember States, make good any damage caused by its institutions orby its servants in the performance of their duties. The preceding paragraph shall apply under the same conditions todamage caused by the ECB or by its servants in the performance oftheir duties. The personal liability of its servants towards the Community shall begoverned by the provisions laid down in their Staff Regulations or inthe Conditions of Employment applicable to them. "79) Article 227 shall be amended as follows:(a) paragraph 2 shall be replaced by the following:"2. With regard to the French overseas departments, the general andparticular provisions of this Treaty relating to:- the free movement of goods;- agriculture, save for Article 40 (4);- the liberalization of services- the rules on competition;- the protective measures provided for in Articles 109h, 109i and 226;- the institutions, shall apply as soon as this Treaty enters into force. The conditions under which the other provisions of this Treaty are toapply shall be determined, within two years of entry into force of thisTreaty, by decisions of the Council, acting unanimously on a proposalfrom the Commission. The institutions of the Community will, within the framework of theprocedures provided for in this Treaty, in particular Article 226, takecare that the economic and social developments of these areas ismade possible. "(b) in paragraph 5, subparagraph (a) shall be replaced by the following:"(a) this Treaty shall not apply to the Faroe Islands. "80) Article 228 shall be replaced by the following:"ARTICLE 2281. Where this Treaty provides for the conclusion of agreementsbetween the Community and one or more States or internationalorganizations, the Commission shall make recommendations to theCouncil, which shall authorize the Commission to open the necessarynegotiations. The Commission shall conduct these negotiations inconsultation with special committees appointed by the Council toassist it in this task and within the framework of such directives as theCouncil may issue to it. In exercising the powers conferred upon it by this paragraph, theCouncil shall act by a qualified majority, except in the cases providedfor in the second sentence of paragraph 2, for which it shall actunanimously. 2. Subject to the powers vested in the Commission in this field, theagreements shall be concluded by the Council, acting by a qualifiedmajority on a proposal from the Commission. The Council shall actunanimously when the agreement covers a field for which unanimity isrequired for the adoption of internal rules, and for the agreementsreferred to in Article 238. 3. The Council shall conclude agreements after consulting theEuropean Parliament, except for the agreements referred to in Article113(3), including cases where the agreement covers a field for whichthe procedure referred to in Article 189b or that referred to in Article189c is required for the adoption of internal rules. The EuropeanParliament shall deliver its opinion within a time limit which theCouncil may lay down according to the urgency of the matter. In theabsence of an opinion within that time limit, the Council may act. By way of derogation from the previous subparagraph, agreementsreferred to in Article 238, other agreements establishing a specificinstitutional framework by organizing co-operation procedures, agreements having important budgetary implications for theCommunity and agreements entailing amendment of an act adoptedunder the procedure referred to in Article 189b shall be concluded afterthe assent of the European Parliament has been obtained. The Council and the European Parliament may, in an urgent situation, agree upon a time limit for the assent. 4. When concluding an agreement, the Council may, by way ofderogation from paragraph 2, authorize the Commission to approvemodifications on behalf of the Community where the agreementprovides for them to be adopted by a simplified procedure or by abody set up by the agreement; it may attach specific conditions tosuch authorization. 5. When the Council envisages concluding an agreement which callsfor amendments to this Treaty, the amendments must first be adoptedin accordance with the procedure laid down in Article N of the Treaty onEuropean Union. 6. The Council, the Commission or a Member State may obtain theopinion of the Court of Justice as to whether an agreement envisagedis compatible with the provisions of this Treaty. Where the opinion ofthe Court of Justice is adverse, the agreement may enter into forceonly in accordance with Article N of the Treaty on European Union. 7. Agreements concluded under the conditions set out in this Articleshall be binding on the institutions of the Community and on MemberStates. "81) The following Article shall be inserted:"ARTICLE 228aWhere it is provided, in a common position or in a joint action adoptedaccording to the provisions of the Treaty on European Union relating tothe common foreign and security policy, for an action by theCommunity to interrupt or to reduce, in part or completely, economicrelations with one or more third countries, the Council shall take thenecessary urgent measures. The Council shall act by a qualifiedmajority on a proposal from the Commission. "82) Article 231 shall be replaced by the following:"ARTICLE 231The Community shall establish close co-operation with theOrganization for Economic Cooperation and Development, the detailsof which shall be determined by common accord. "83) Article 236 and 237 shall be repealed. 84) Article 328 shall be replaced by the following:"ARTICLE 238The Community may conclude with one or more states or internationalorganizations agreements establishing an association involvingreciprocal rights and obligations, common action and specialprocedures. "F. In Annex III:85) The title shall be replaced by the following:"List of invisible transactions referred to in Article 73h of this Treaty". G. In the Protocol on the Statue of the European Investment Bank:86) The reference to Articles 129 and 130 shall be replaced by areference to Articles 198b and 198e. TITLE3PROVISIONS AMENDING THE TREATY ESTABLISHING THEEUROPEAN COAL AND STEEL COMMUNITY ARTICLE HThe Treaty establishing the European Coal and Steel Community shallbe amended in accordance with the provisions of this Article. 1) Article 7 shall be replaced by the following:"ARTICLE 7The institutions of the Community shall be:- a HIGH AUTHORITY (hereinafter referred to as "the Commission");- a COMMON ASSEMBLY (hereinafter referred to as "the EuropeanParliament");- a SPECIAL COUNCIL OF MINISTERS (hereinafter referred to as "theCouncil");- a COURT OF JUSTICE;- a COURT OF AUDITORS. The Commission shall be assisted by a Consultative Committee. "2) The following Articles shall be inserted:"ARTICLE 91. The Commission shall consist of seventeen members, who shall bechosen on the grounds of their general competence and whoseindependence is beyond doubt. The number of members of the Commission may be altered by theCouncil, acting unanimously. Only nationals of the Member States may be members of theCommission. The commission must include at least one national of each of theMember States, but may not include more than two members havingthe nationality of the same State. 2. The members of the Commission shall, in the general interest of theCommunity, be completely independent in the performance of theirduties. In the performance of these duties, they shall neither seek nor takeinstructions from any government or from any other body. They shallrefrain from any action incompatible with their duties. Each MemberState undertakes to respect this principle and not to seek to influencethe members of the Commission in the performance of their tasks. The members of the Commission may not, during their term of office, engage in any other occupation whether gainful or not. When enteringupon their duties they shall give a solemn undertaking that, bothduring and after their term of office, they will respect the obligationsarising therefrom and in particular their duty to behave with integrityand discretion as regards the acceptance, after they have ceased tohold office, of certain appointments or benefits. In the event of anybreach of these obligations, the Court of Justice may, on applicationby the Council or the Commission, rule that the member concerned be, according to the circumstances, either compulsorily retired inaccordance with Article 12a or deprived of his right to a pension orother benefits in its stead. ARTICLE 101. The members of the Commission shall be appointed in accordancewith the procedure referred to in paragraph 2, for a period of fiveyears, subject, if need be, to Article 24. Their term of office shall be renewable. 2. The governments of the Member States shall nominate by commonaccord, after consulting the European Parliament, the person theyintend to appoint as President of the Commission. The governments of the Members States shall, in consultation with thenominee for the President, nominate the other persons whom theyintend to appoint as members of the Commission. The President and the other members of the Commission thusnominated shall be subject as a body to a vote of approval by theEuropean Parliament. After approval by the European Parliament, thePresident and the other members of the Commission shall beappointed by common accord of the Member States. 3. Paragraphs 1 and 2 shall be applied for the first time to thePresident and the other members of the Commission whose term ofoffice begins on 7 January 1995. The President and the other members of the Commission whose termof office beings on 7 January 1993 shall be appointed by commonaccord of the governments of the Member States. Their term of officeshall expire on 6 January 1995. ARTICLE 11The Commission may appoint a Vice-President or two Vice-Presidentsfrom among its members. ARTICLE 12Apart from normal replacement, or death, the duties of a member of theCommission shall end when he resigns or is compulsorily retired. The vacancy thus caused shall be filled for the remainder of themembers term of office by a new member appointed by commonaccord of the governments of the Member States. The Council may, acting unanimously, decide that such a vacancy need not be filled. In the event of resignation, compulsory retirement or death, thePresident shall be replaced for the remainder of his term of office. Theprocedure laid down in Article 10(2) shall be applicable for thereplacement of the President. Save in the case of compulsory retirement under Article 12a, membersof the Commission shall remain in office until they have beenreplaced. ARTICLE 12aIf any member of the Commission no longer fulfils the conditionsrequired for the performance of his duties or if he has been guilty ofserious misconduct, the Court of Justice may, on application by theCouncil or the Commission, compulsorily retire him. ARTICLE 13The Commission shall act by a majority of the number of membersprovided for in Article 9. A meeting of the Commission shall be valid only if the number ofmembers laid down in its rules of procedure is present. "3) Article 16 shall be replaced by the following:"ARTICLE 16The Commission shall make all appropriate administrativearrangements for the operation of its departments. It may set up study committees, including an economic studycommittee. The Council and the Commission shall consult each other and shallsettle by common accord their methods of co-operation. The Commission shall adopt its rules of procedure so as to ensurethat both it and its departments operate in accordance with theprovisions of this Treaty. It shall ensure that these rules arepublished. "4) The following article shall be inserted:"ARTICLE 17The commission shall publish annually, not later than one monthbefore the opening of the session of the European Parliament, ageneral report on the activities of the Community. "5) The following subparagraph shall be added to Article 18:"The Council shall, acting by a qualified majority, determine anypayment to be made instead of remuneration. "6) The following Articles shall be inserted:"ARTICLE 20aThe European Parliament may, acting by a majority of its members, request the Commission to submit any appropriate proposal onmatters which it considers that a Community act is required for thepurpose of implementing this Treaty. ARTICLE 20bIn the course of its duties, the European Parliament may, at therequest of a quarter of its members, set up a temporary Committee ofInquiry to investigate, without prejudice to the powers conferred bythis Treaty on other institutions or bodies, alleged contraventions ormaladministration in the implementation of Community law, exceptwhere the alleged facts are being examined before a Court and whilethe case is still subject to legal proceedings. The temporary Committee of Inquiry shall cease to exist on thesubmission of its report. The detailed provisions governing the exercise of the right of inquiryshall be determined by common accord of the European Parliament, the Council, and the Commission. ARTICLE 20cAny citizen of the Union, and any natural or legal person residing orhaving its registered office in a Member State, shall have the right toaddress, individually or in association with other citizens or persons, a petition to the European Parliament on a matter which comes withinthe Community's field's of activity and which affects him, her or itdirectly. ARTICLE 20d1. The European Parliament shall appoint an Ombudsman empoweredto receive complaints from any citizen of the Union or any natural orlegal person residing or having its registered office in a Member Stateconcerning instances of maladministration in the activities of theCommunity institutions or bodies, with the exception of the Court ofJustice and the Court of First Instance acting in their judicial role. In accordance with his duties, the Ombudsman shall conduct enquiriesfor which he finds grounds, either on his own initiative or on the basisof complaints submitted to him direct or through a member of theEuropean Parliament, except where the alleged facts are or have beenthe subject of legal proceedings. Where the Ombudsman establishesan instance of maladministration, he shall refer the matter to theinstitution concerned, which shall have a period of three months inwhich to inform him of its views. The Ombudsman shall then forward areport to the European Parliament, and the institution concerned. Theperson lodging the complaint shall be informed of the outcome of suchinquiries. The Ombudsman shall submit an annual report to the EuropeanParliament on the outcome of his inquiries. 2. The Ombudsman shall be appointed after each election of theEuropean parliament for the duration of its term of office. TheOmbudsman shall be eligible for reappointment. The Ombudsman may be dismissed by the Court of Justice at therequest of the European Parliament if he no longer fulfils theconditions required for the performance of his duties or if he is guiltyof serious misconduct. 3. The Ombudsman shall be completely independent in theperformance of his duties. In the performance of those duties he shallneither seek nor take instructions from any body. The Ombudsmanmay not, during his term of office, engage in any other occupation, whether gainful or not. 4. The European Parliament shall, after seeking an opinion from theCommission and with the approval of the Council acting by a qualifiedmajority, lay down the regulations and general conditions governingthe performance of the Ombudsman's duties. "7) Paragraph 3 of Article 21 shall be replaced by the following:"3. The European Parliament shall draw up proposals for elections bydirect universal suffrage in accordance with a uniform procedure in allMember States. The Council shall, acting unanimously after obtaining the assent of theEuropean Parliament, which shall act by a majority of its componentmembers, lay down the appropriate provisions, which it shallrecommend to Member States for adoption in accordance with theirrespective constitutional requirements. "8) Article 24 shall be replaced by the following:"ARTICLE 24The European Parliament shall discuss in open session the generalreport submitted to it by the Commission. If a motion of censure on the activities of the Commission is tabledbefore it, the European Parliament shall not vote thereon until at leastthree days after the motion has been tabled and only by open vote. If a motion of censure is carried by a two-thirds majority of the votescast, representing a majority of the members of the EuropeanParliament, the members of the Commission shall resign as a body. They shall continue to deal with current business until they arereplaced in accordance with Article 10. In this case, the term of officethe members of the Commission appointed to replace them shallexpire on the date on which the term of office of the members of theCommission obliged to resign as a body would have expired. "9) The following Articles shall be inserted:"ARTICLE 27The Council shall consist of a representative of each Member State ata ministerial level, authorized to commit the government of thatMember State. The office of President shall be held in turn by each Member State inthe Council for a term of six months, in the following order of MemberStates:- for a first cycle of six years: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Portugal, United Kingdom;- for the following cycle of six years: Denmark, Belgium, Greece, Germany, France, Spain, Italy, Ireland, Netherlands, Luxembourg, United Kingdom, Portugal. ARTICLE 27aThe Council shall meet when convened by its President on his owninitiative or at the request of one of its members or of theCommission. "10) The following Article shall be inserted:"ARTICLE 29The Council shall, acting by a qualified majority, determine thesalaries, allowances and pensions of the President and members ofthe Commission, and of the President, Judges, Advocates-General andRegistrar of the Court of Justice. It shall also, again by a qualifiedmajority, determine any payment to be made instead of remuneration, ARTICLE 301. A committee consisting of the Permanent Representatives of theMember States shall be responsible for preparing the work of theCouncil and for carrying out the tasks assigned to it by the Council. 2. The Council shall be assisted by a General Secretariat, under thedirection of a Secretary General. The Secretary-General shall beappointed by the Council acting unanimously. The Council shall decide on the organization of the GeneralSecretariat. 3. The Council shall adopt its rules of procedure. "11) Article 32 shall be replaced by the following;"ARTICLE 32The Court of Justice shall consist of thirteen Judges. The Court of Justice shall sit in plenary session. It may, however, formChambers, each consisting of three or five Judges, either to undertakecertain preparatory inquiries, or to adjudicate on particular categoriesof cases in accordance with the rules laid down for these purposes. The Court of Justice shall sit in plenary session when a Member Stateor a Community institution that is a party to the proceedings sorequests. Should the Court of Justice so request, the Council may, actingunanimously, increase the number of Judges and make the necessaryadjustments to the second and third paragraphs of this Article and tothe second paragraph of Article 32b. "12) Article 32d shall be replaced by the following:"ARTICLE 32d1. A Court of First Instance shall be attached to the Court of Justicewith jurisdiction to hear and determine at first instance, subject to aright of appeal to the Court of Justice on points of law only and inaccordance with the conditions laid down by the Statute, certainclasses of action or proceeding defined in accordance with theconditions laid down by the Statute, certain classes of action orproceeding defined in accordance with the conditions laid down inparagraph 2. The Court of First Instance shall not be competent to hearand determine questions referred for a preliminary ruling under Article41. 2. At the request of the Court of Justice and after consulting theEuropean Parliament and the Commission, the Council, actingunanimously, shall determine the classes of action or proceedingreferred to in paragraph 1, and the composition of the Court of Firstinstance and shall adopt the necessary adjustments and additionalprovisions to the Statute of the Court of Justice. Unless the Councildecides otherwise, the provisions of this Treaty relating to the Court ofJustice, in particular the provisions of the Protocol on the Statute of theCourt of Justice, shall apply to the Court of the First Instance. 3. The members of the Court of First instance shall be chosen frompersons whose independence is beyond doubt and who possess theability required for appointment to judicial office; they shall beappointed by common accord of the governments of the MemberStates for a term of six years. The membership shall be partiallyrenewed every three years. Retiring members shall be eligible for re-appointment. 4. The Court of First Instance shall establish its rules of procedure inagreement with the Court of Justice. Those rules shall require theunanimous approval of the Council. "13) Article 33 shall be replaced by the following:"ARTICLE 33The Court of Justice shall have jurisdiction in actions brought by aMember State or by the Council to have decisions orrecommendations of the Commission declared void on grounds of lackof competence, infringement of an essential procedural requirement, infringement of this Treaty or of any rule of law relating to itsapplication, or misuse of powers. The Court of Justice may not, however, examine the evaluation of the situation, resulting fromeconomic facts or circumstances, in the light of which the Commissiontook its decisions or made its recommendations, save where theCommission is alleged to have misused its powers or to havemanifestly failed to observe the provisions of the Treaty or any rule oflaw relating to its application. Undertakings or associations referred to in Article 48 may, under thesame conditions, institute proceedings against decisions orrecommendations concerning them which are individual in character oragainst general decisions or recommendations which they consider toinvolve a misuse of powers affecting them. The proceedings provided for in the first two paragraphs of this Articleshall be instituted within one month of the notification or publication, as the case may be, of the decision or recommendation. The Court of Justice shall have jurisdiction under the same conditionsin actions brought by the European Parliament for the purpose ofprotecting its prerogatives. "14) The following chapter shall be inserted:"CHAPTER VTHE COURT OF AUDITORSARTICLE 45aThe Court of Auditors shall carry out the audit. ARTICLE 45b1. The Court of Auditors shall consist of twelve members. 2. The members of the Court of Auditors shall be chosen from amongpersons who belong or have belonged in their respective countries toexternal audit bodies or who are especially qualified for this office. Their independence must be beyond doubt. 3. The members of the Court of Auditors shall be appointed for a termof six years by the Council, acting unanimously after consulting theEuropean Parliament. However, when the first appointments are made, four members of theCourt of Auditors, chosen by lot, shall be appointed for a term of officeof four years only. The members of the Court of Auditors shall be eligible forreappointment. They shall elect the President of the Court of Auditors from among theirnumber for a term of three years. The President may be re-elected. 4. The members of the Court of Auditors shall, in the general interest ofthe Community, be completely independent in the performance of theirduties. In the performance of these duties, they shall neither seek nor takeinstructions from any government or from any other body. They shallrefrain from any action incompatible with their duties. 5. The members of the Court of Auditors may not, during their term ofoffice, engage in any other occupation, whether gainful or not. Whenentering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect theobligations arising therefrom and in particular their duty to behavewith integrity and discretion as regards the acceptance, after theyhave ceased to hold office, of certain appointments or benefits. 6. Apart from normal replacement, or death, the duties of a member ofthe Court of Auditors shall end when he resigns, or is compulsorilyretired by a ruling of the Court of Justice pursuant to paragraph 7. The vacancy thus caused shall be filled for the remainder of themember's term of office. Save in the case of compulsory retirement, members of the Court ofAuditors shall remain in office until they have been replaced. 7. A member of the Court of Auditors may be deprived of his office or ofhis right to a pension or other benefits in its stead only if the Court ofJustice, at the request of the Court of Auditors, finds that he no longerfulfills the requisite conditions or meets the obligations arising fromhis office. 8. The Council, acting by a qualified majority, shall determine theconditions of employment of the President and the members of theCourt of Auditors and in particular their salaries, allowances andpensions. It shall also, by the same majority, determine any paymentto be made instead of remuneration. 9. The provisions of the Protocol on the Privileges and Immunities ofthe European Communities applicable to the Judges of the Court ofJustice shall also apply to the members of the Court of Auditors. ARTICLE 45c1. The Court of Auditors shall examine the accounts of all revenue andexpenditure of the Community. It shall also examine the accounts ofall revenue and expenditure of all bodies set up by the Community inso far as the relevant constituent instrument does not preclude suchexamination. The Court of Auditors shall provide the European Parliament and theCouncil with a statement of assurance as to the reliability of theaccounts and the legality and regularity of the underlying transactions. 2. The Court of Auditors shall examine whether all revenue referred toin paragraph 1 has been received and all expenditure referred to inthat paragraph has been incurred in a lawful and regular manner andwhether the financial management has been sound. The audit of revenue shall be carried out on the basis of the amountsestablished as due and the amounts actually paid to the community. The audit of expenditure shall be carried out on the basis both ofcommitments undertaken and payments made. These audits may be carried out before the closure of accounts for thefinancial year in question. 3. The audit shall be based on records and, if necessary, performedon the spot in the other institutions of the Community and in theMember States. In the Member States the audit shall be carried out inliaison with the national audit bodies or, if these do not have thenecessary powers, with the competent national departments. Thesesbodies or departments shall inform the Court of Auditors whether theyintend to take part in the audit. The other institutions of the Community and the national audit bodiesor, if these do not have the necessary powers, the competent nationaldepartments, shall forward to the Court of Auditors, at its request, anydocument or information necessary to carry out its task. 4. The Court of Auditors shall draw up an annual report after the closeof each financial year. It shall be forwarded to the other institutions ofthe Community and shall be published, together with the replies ofthese institutions to the observations of the Court of Auditors, in theOfficial Journal of the European Communities. The Court of Auditors may also, at any time, submit observations, particularly in the form of special reports, on specific questions anddeliver opinions at the request of one of the other institutions of theCommunity. It shall adopt its annual reports, special reports or opinions by amajority of its members. It shall assist the Europe and Parliament and the Council in exercisingtheir powers of control over the implementation of the budget. 5. The Court of Auditors shall also draw up a separate annual reportstating whether the accounting other than that for the expenditure andrevenue referred to in paragraph 1 and the financial management bythe Commission relating thereto have been effected in a regularmanner. It shall draw up this report within six months of the end of thefinancial year to which the accounts refer and shall submit it to theCommission and the Council. The Commission shall forward it to theEuropean Parliament. "15) Article 78c shall be replaced by the following:"ARTICLE 78cThe Commission shall implement the administrative budget, inaccordance with the provisions of the regulations made pursuant toArticle 78h, on its own responsibility and within the limits of theappropriations, having regard to the principles of sound financialmanagement. The regulations shall lay down detailed rules for each institutionconcerning its part in effecting its own expenditure. Within the administrative budget, the Commission may, subject to thelimits and conditions laid down in the regulations made pursuant toArticle 78h, transfer appropriations from one chapter to another or fromone subdivision to another. "16) Articles 78e and 78f shall be repealed. 17) Article 78g shall be replaced by the following:"ARTICLE 78g1. The European Parliament, acting on a recommendation from theCouncil, which shall act by a qualified majority, shall give a dischargeto the Commission in respect of the implementation of theadministrative budget. To this end, the Council and the EuropeanParliament in turn shall examine the account and the financialstatement referred to in Article 78d, the annual report by the Court ofAuditors together with the replies of the institutions under audit to theobservations of the Court of Auditors, and any relevant special reportsby the Court of Auditors. 2. Before giving a discharge to the Commission, or for any otherpurpose in connection with the exercise of its powers over theimplementation of the administrative budget, the European Parliamentmay ask to hear the Commission give evidence with regard to theexecution of expenditure or the operation of financial control systems. The Commission shall submit any necessary information to theEuropean Parliament at the latter's request. 3. The Commission shall take all appropriate steps to act on theobservations in the decisions giving discharge on other observationsby the European Parliament relating to the execution of expenditure, as well as on comments accompanying the recommendations ondischarge adopted by the Council. At the request of the European Parliament or Council, the Commissionshall report on the measures taken in the light of these observationsand comments and in particular on the instructions given to thedepartments which are responsible for the implementation of theadministrative budget. These reports shall also be forwarded to theCourt of Auditors. "18) Article 78h shall be replaced by the following:"ARTICLE 78hThe Council, acting unanimously on a proposal from the Commissionand after consulting the European Parliament and obtaining theopinion of the Court of Auditors, shall:a) make Financial Regulations specifying in particular the procedure tobe adopted for establishing the implementing the administrativebudget and for presenting and auditing accounts;b) determine the methods and procedure whereby the budget revenueprovided under the arrangements relating to the Communities' ownresources shall be made available to the Commission, and determinethe measures to be applied, if need be, to meet cash requirements;c) lay down rules concerning the responsibility of financial controllers, authorizing officers and accounting officers, and concerningappropriate arrangements for inspection. "19) The following Article shall be inserted:"ARTICLE 78iMember States shall take the same measures to counter fraudaffecting the financial interests of the Community as they take tocounter fraud affecting their own financial interests. Without prejudice to other provisions of this Treaty, Member Statesshall co-ordinate their action aimed at protecting the financial interestsof the Community against fraud. To this end they shall organize, withthe help of the Commission, close and regular co-operation betweenthe competent departments of their administrations. "20) Article 79(a) shall be replaced by the following:"(a) This Treaty shall not apply to the Faroe Islands. "21) Articles 96 and 98 shall be repealed. TITLE4PROVISIONS AMENDING THE TREATY ESTABLISHING THEEUROPEAN ATOMIC ENERGY COMMUNITY ARTICLE 1The Treaty establishing European Atomic Energy Community shall beamended in accordance with the provisions of this Article. 1) Article 3 shall be replaced by the following:"ARTICLE 31) The tasks entrusted to the Community shall be carried out by thefollowing institutions:- a EUROPEAN PARLIAMENT, - a COUNCIL, - a COMMISSION, - a COURT OF JUSTICE, - a COURT OF AUDITORS. Each institution shall act within the limits of the powers conferred uponit by this Treaty. 2. The Council and the Commission shall be assisted by an Economicand Social Committee acting in an advisory capacity. "2) The following Articles shall be inserted:"ARTICLE 107aThe European Parliament may, acting by a majority of its members, request the Commission to submit any appropriate proposal onmatters on which it considers that a Community act is required for thepurpose of implementing this Treaty. ARTICLE 107bIn the course of its duties, the European Parliament may, at therequest of a quarter of its members, set up a temporary Committee ofInquiry to investigate, without prejudice to the powers conferred bythis Treaty on other institutions or bodies, alleged contraventions ormaladministration in the implementation of Community law, exceptwhere the alleged facts are being examined before a court and whilethe case is still subject to legal proceedings. The temporary Committee of Inquiry shall cease to exist on thesubmission of its report. The detailed provisions governing the exercise of the right of inquiryshall be determined by common accord of the European Parliament, the Council and the Commission. ARTICLE 107cAny citizen of the Union, and any natural or legal person residing orhaving its registered office in a Member State, shall have the right toaddress, individually or in association with other citizens or persons, a petition to the European Parliament on a matter which comes withinthe Community's fields of activity and which affects him, her or itdirectly. ARTICLE 107d1. The European Parliament shall appoint an Ombudsman empoweredto receive complaints from any citizen of the Union or any natural orlegal person residing or having its registered office in a Member Stateconcerning instances of maladministration in the activities of theCommunity institutions or bodies, with the exception of the Court ofJustice and the Court of First Instance acting in their judicial role. In accordance with his duties, the Ombudsman shall conduct inquiriesfor which he finds grounds, either on his own initiative or on the basisof complaints submitted to him direct or through a member of theEuropean Parliament, except where the alleged facts are or have beenthe subject of legal proceedings. Where the Ombudsman establishesan instance of maladministration, he shall refer the matter to theinstitution concerned. The person lodging the complaint shall beinformed of the outcome of such inquiries. The Ombudsman shall submit an annual report to the EuropeanParliament on the outcome of his inquiries. 2. The Ombudsman shall be appointed after each election of theEuropean Parliament for the duration of its term of office. TheOmbudsman shall be eligible for reappointment. The Ombudsman may be dismissed by the Court of Justice at therequest of the European Parliament if he no longer fulfils theconditions required for the performance of his duties or if he is guiltyof serious misconduct. 3. The Ombudsman shall be completely independent in theperformance of his duties. In the performance of those duties he shallneither seek nor take instructions form any body. The Ombudsmanmay not, during his term of office, engage in any other occupation, whether gainful or not. 4. The European Parliament shall, after seeking an opinion from theCommission and with the approval of the Council acting by a qualifiedmajority, lay down the regulations and general conditions governingthe performance of the Ombudsman's duties. "3) Paragraph 3 of Article 108 shall be replaced by the following:"3. The European Parliament shall draw up proposals for elections bydirect universal suffrage in accordance with a uniform procedure in allMember States. The Council shall, acting unanimously after obtaining the assent of theEuropean Parliament, which shall act by a majority of its componentmembers, lay down the appropriate provisions, which it shallrecommend to Member States for adoption in accordance with theirrespective constitutional requirements. "4) The second subparagraph of Article 114 shall be supplemented bythe following sentence:"In this case, the term of office of the members of the Commissionappointed to replace them shall expire on the date on which the termof office of the members of the Commission obliged to resign as abody would have expired. "5) The following Articles shall be inserted:"ARTICLE 116The Council shall consist of a representative of each Member State atministerial level, authorized to commit the government of that MemberState. The office of President shall be held in turn by each Member State inthe Council for a term of six months, in the following order of MemberStates. - for a first cycle of six years: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Portugal, United Kingdom. - for the following cycle of six years: Denmark, Belgium, Greece, Germany, France, Spain, Italy, Ireland, Netherlands, Luxembourg, United Kingdom, Portugal. ARTICLE 117The Council shall meet when convened by its President on his owninitiative or at the request of one of its members or of theCommission. "6) The following Article shall be inserted:"ARTICLE 1211. A committee consisting of the Permanent Representatives of theMember States shall be responsible for preparing the work of theCouncil and for carrying out the tasks assigned to it by the Council. 2. The Council shall be assisted by a General Secretariat, under thedirection of a Secretary-General. The Secretary-General shall beappointed by the Council acting unanimously. The Council shall decide on the organization of the GeneralSecretariat. 3. The Council shall adopt its rules of procedure. "7) The following Article shall be inserted:"ARTICLE 123The Council shall, acting by a qualified majority, determine thesalaries, allowances and pensions of the President and members ofthe Commission, and of the President, Judges, Advocates-General andRegistrar of the Court of Justice. It shall also, again by a qualifiedmajority, determine any payment to be made instead of remuneration. "8) The following Articles shall be inserted;"ARTICLE 125The Commission shall publish annually, not later than one monthbefore the opening of the session of the European Parliament, ageneral report on the activities of the Community. ARTICLE 1261. The Commission shall consist of seventeen members, who shall bechosen on the grounds of their general competence and whoseindependence is beyond doubt. The number of members of the Commission may be altered by theCouncil, acting unanimously. Only nationals of the Member States may be members of theCommission. The Commission must include at least one national of each of theMember States, but may not include more than two members havingthe nationality of the same State. 2. The members of the Commission shall, in the general interest of theCommunity, be completely independent in the performance of theirduties. In the performance of these duties, they shall neither seek nor takeinstructions from any government or from any other body. They shallrefrain from any action incompatible with their duties. Each MemberState undertakes to respect this principle and not to seek to influencethe members of the Commission in the performance of their tasks. The members of the Commission may not, during their term of office, engage in any other occupation, whether gainful or not. When enteringupon their duties they shall give a solemn undertaking that, bothduring and after their term or office, they will respect the obligationsarising therefrom and in particular their duty to behave with integrityand discretion as regards the acceptance after they have ceased tohold office, of certain appointments or benefits. In the event of anybreach of these obligations arising therefrom and in particular theirduty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments orbenefits. In the event of any breach of these obligations, the Court ofJustice may, on application by the Council or the Commission, rulethat the member concerned be, according to the circumstances, eithercompulsorily retired in accordance with Article 129 or deprived of hisright to a pension or other benefits in its stead. ARTICLE 1271. The members of the Commission shall be appointed, in accordancewith the procedure referred to in paragraph 2, for a period of fiveyears, subject, if need be, to Article 114. Their term of office shall be renewable. 2. The governments of the Member States shall nominate by commonaccord, after consulting the European Parliament, the person theyintend to appoint as President of the Commission. The governments of the Member States shall, in consultation with thenominee for President, nominate the other persons whom they intendto appoint as members of the Commission. The President and other members of the Commission thus nominatedshall be subject as a body to a vote of approval by the EuropeanParliament. After approval by the European Parliament, the Presidentand the other members of the Commission shall be appointed bycommon accord of the governments of the Member States. 3. Paragraphs 1 and 2 shall be applied for the first time to thePresident and other members of the Commission whose term of officebegins on 7 January 1995. The President and the other members of the Commission whose termof office begins on 7 January 1993 shall be appointed by commonaccord of the governments of the Member States. Their term of officeshall expire on 6 January 1995. ARTICLE 128Apart from normal replacement, or death, the duties of a member of theCommission shall end when he resigns or is compulsorily retired. The vacancy thus caused shall be filled for the remainder of themember's term of office by a new member appointed by commonaccord of the governments of the Member States. The Council may, acting unanimously, decide that such a vacancy need not be filled. In the event of resignation, compulsory retirement or death, thePresident shall be replaced for the remainder of his term of office. Theprocedure laid down in Article 127(2) shall be applicable for thereplacement of the President. Save in the case of compulsory retirement under Article 129, membersof the Commission shall remain in office until they have beenreplaced. ARTICLE 129If any member of the Commission no longer fulfills the conditionsrequired for the performance of his duties or if he has been guilty ofserious misconduct, the Court of Justice may, on application by theCouncil or Commission, compulsorily retire him. ARTICLE 130The Commission may appoint a Vice-President or two Vice-Presidentsfrom among its members. ARTICLE 131The Council and the Commission shall consult each other and shallsettle by common accord their methods of co-operation. The Commission shall adopt its rules of procedure so as to ensurethat both it and its departments operate in accordance with theprovisions of the Treaty. It shall ensure that these rules are published. ARTICLE 132The Commission shall act by a majority of the number of membersprovided for in Article 126. A meeting of the Commission shall be valid only if the number ofmembers laid down in its rules of procedure is present. "9) Article 133 shall be repealed. 10) Article 137 shall be replaced by the following:"ARTICLE 137The Court of Justice shall consist of thirteen Judges. The Court of Justice shall sit in plenary session. It may, however, formChambers, each consisting of three or five Judges, either to undertakecertain preparatory inquiries or to adjudicate on particular categoriesof cases in accordance with the rules laid down for these purposes. The Court of Justice shall Sit in plenary session when a Member Stateor a Community institution that is a party to the proceedings sorequests. Should the Court of Justice so request, the Council may, actingunanimously, increase the number of Judges and make the necessaryadjustments to the second and third paragraphs of this Article 139. "11) Article 140a shall be replaced by the following:"ARTICLE 140a1. A Court of First Instance shall be attached to the Court of Justicewith jurisdiction to hear and determine at first instance, subject to aright of appeal to the Court of Justice on points of law only and inaccordance with the conditions laid down by the Statute, certainclasses of action or proceeding defined in accordance with theconditions laid down in paragraph 2. The Court of First Instance shallnot be competent to hear and determine questions referred for apreliminary ruling under Article 150. 2. At the request of the Court of Justice and after consulting theEuropean Parliament and the Commission, the Council, actingunanimously, shall determine the classes of action or proceedingreferred to in paragraph 1 and the composition of the Court of FirstInstance and shall adopt the necessary adjustments and additionalprovisions to the Statute of the Court of Justice. Unless the Councildecides otherwise, the provisions of this Treaty relating to the Court ofJustice, in particular the provisions of the Protocol on the Statute of theCourt of Justice, shall apply to the Court of the First Instance. 3. The members of the Court of First Instance shall be chosen frompersons whose independence is beyond doubt and who possess theability required for appointment to judicial office; they shall beappointed by common accord of the governments of the MemberStates for a term of six years. The membership shall be partiallyrenewed every three years. Retiring members shall be eligible for re-appointment. 4. The Court of First Instance shall establish its rules of procedure inagreement with the Court of Justice. Those rules shall require theunanimous approval of the Council. "12) Article 143 shall be replaced by the following:"ARTICLE 1431. If the Court of Justice finds that a Member State has failed to fulfil anobligation under this Treaty, the State shall be required to take thenecessary measures to comply with the judgment of the Court ofJustice. 2. If the Commission considers that the Member State concerned hasnot taken such measures it shall, after giving that State the opportunityto submit its observations, issue a reasoned opinion specifying thepoints which the Member State concerned has not complied with thejudgment of the Court of Justice. If the Member State concerned fails to take the necessary measures tocomply with the Court's judgment within the time-limit laid down by theCommission, the latter may bring the case before the Court of Justice. In so doing it shall specify the amount of the lump sum or penaltypayment to be paid by the Member State concerned which it considersappropriate in the circumstances. If the Court of Justice finds that the Member State concerned has notcomplied with its judgment it may impose a lump sum or penaltypayment on it. This procedure shall be without prejudice to Article 142. "13) Article 146 shall be replaced by the following:"ARTICLE 146The Court of Justice shall review the legality of acts of the Council andof the Commission, other than recommendations and opinions, and ofacts of the European Parliament intended to produce legal effects vis-a-vis third parties. It shall for this purpose have jurisdiction in actions brought by aMember State, the Council or the Commission on grounds of lack ofcompetence, infringement of this Treaty or of any rule of law relating toits application, or misuse of powers. The Court shall have jurisdiction under the same conditions in actionsbrought by the European Parliament for the purpose of protecting itsprerogatives. Any natural or legal person may, under the same conditions, instituteproceedings against a decision addressed to that person or against adecision which, although in the form of a regulation or a decisionaddressed to another person, is of direct and individual concern to theformer. The proceedings provided for in this Article shall be instituted withintwo months of the publication of the measure, or of its notification tothe plaintiff, or, in the absence thereof, of the day on which it came tothe knowledge of the latter, as the case may be. "14) The following Section shall be inserted;"SECTION VTHE COURT OF AUDITORSARTICLE 160aThe Audit shall be carried out by the Court of ~Auditors. ARTICLE 160b1. The Court of Auditors shall consist of twelve members. 2. The members of the Court of Auditors shall be chosen from amongpersons who belong or have belonged in their respective countries toexternal audit bodies or who are especially qualified for this office. Their independence must be beyond doubt. 3. The members of the Court of Auditors shall be appointed for a termof six years by the Council, acting unanimously after consulting theEuropean Parliament. However, when the first appointments are made, four members of theCourt of Auditors, chosen by lot, shall be appointed for a term of officeof four years only. The members of the Court of Auditors shall be eligible forreappointment. They shall elect the President of the Court of Auditors from among theirnumber for a term of three years. The President may be re-elected. 4. The members of the Court of Auditors shall, in the general interest ofthe Community, be completely independent in the performance of theirduties. In the performance of these duties, they shall neither seek nor takeinstructions from any government or from any other body. They shallrefrain from any action incompatible with their duties. 5. The members of the Court of Auditors may not, during their term ofoffice, engage in any other occupation, whether gainful or not. Whenentering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect theobligations arising therefrom and in particular their duty to behavewith integrity and discretion as regards the acceptance, after theyhave ceased to hold office, of certain appointments or benefits. 6. Apart from normal replacement, or death, the duties of a member ofthe Court of Auditors shall end when he resigns, or is compulsorilyretired by a ruling of the Court of Justice pursuant to paragraph 7. The vacancy thus caused shall be filled for the remainder of themember's term of office. Save in the case of compulsory retirement, members of the Court ofAuditors shall remain in office until they have been replaced. 7. A member of the Court of Auditors may be deprived of his office or ofhis right to a pension or other benefits in its stead only if the Court ofJustice, at the request of the Court of Auditors, finds that he no longerfulfills the requisite conditions or meets the obligations arising fromhis office. 8. The Council, acting by a qualified majority, shall determine theconditions of employment of the President and the members of theCourt of Auditors and in particular their salaries, allowances andpensions. It shall also, by the same majority, determine any paymentto be made instead of remuneration. 9. The provisions of the Protocol on the Privileges and Immunities ofthe European Communities applicable to the judges of the Court ofJustice shall also apply to the members of the Court of Auditors. ARTICLE 160c1. The Court of Auditors shall examine the accounts of all revenue andexpenditure of the Community. It shall also examine the accounts ofall revenue and expenditure of all bodies set up by the Communityinsofar as the relevant constituent instrument does not preclude suchexamination. The Court of Auditors shall provide the European Parliament and theCouncil with a statement of assurance as to the reliability of theaccounts and the legality and regularity of the underlying transactions. 2. The Court of Auditors shall examine whether all revenue has beenreceived and all expenditure incurred in a lawful and regular mannerand whether the financial management has been sound. The audit of revenue shall be carried out on the basis of the amountsestablished as due and the amounts actually paid to the Community. The audit of expenditure shall be carried out on the basis both ofcommitments undertaken and payments made. These audits may be carried out before the closure of accounts for thefinancial year in question. 3. The audit shall be based on records and, if necessary, performedon the spot in the other institutions of the Community and in theMember States. In the Member States the audit shall be carried out inliaison with the national audit bodies or, if these do not have thenecessary powers, with the competent national departments. Thesebodies or departments shall inform the Court of Auditors whether theyintend to take part in the audit. The other institutions of the Community and the national audit bodiesor, if these do not have the necessary powers, the competent nationaldepartment, shall forward to the Court of Auditors, at its request, anydocument or information necessary to carry on its task. 4. The Court of Auditors shall draw up an annual report after the closeof each financial year. It shall be forwarded to the other institutions ofthe Community and shall be published, together with the replies ofthese institutions to the observations of the Court of Auditors, in theOfficial Journal of the European Communities. The Court of Auditors may also, at any time, submit observations, particularly in the form of special reports, on specific questions anddeliver opinions at the request of one of the other institutions of theCommunity. It shall adopt its annual reports, special reports or opinions by amajority of its members. It shall assist the European Parliament and the Council in exercisingtheir powers of control over the implementation of the budget. "15) Article 166 shall be replaced by the following:"ARTICLE 166The number of members of the Economic and Social Committee shallbe as follows:Belgium 12Denmark 9Germany 24Greece 12Spain 21France 24Ireland 9Italy 24Luxembourg 6Netherlands 12Portugal 12United Kingdom 24The members of the Committee shall be appointed by the Council, acting unanimously, for four years. Their appointment shall berenewable. The members of the Committee may not be bound by any mandatoryinstructions. They shall be completely independent in the performanceof their duties, in the general interest of the Community. The Council, acting by qualified majority, shall determine theallowances of the members of the Committee. "168 shall be replaced by the following;"ARTICLE 168The Committee shall elect its chairman and officers from among itsmembers for a term of two years. It shall adopt its rules of procedure. The Committee shall be convened by its chairman at the request of theCouncil or of the Commission. It may also meet on its own initiative. "17) Article 170 shall be replaced by the following:"ARTICLE 170The Committee must be consulted by the Council or by theCommission where this Treaty so provides. The Committee may beconsulted by these institutions in all cases in which they consider itappropriate. It may issue an opinion on its own initiative in cases inwhich it considers such action appropriate. The Council or the Commission shall, if it considers it necessary, setthe Committee, for the submission of its opinion, a time limit whichmay not be less than one month from the date on which the chairmanreceives notification to this effect. Upon expiry of the time limit, theabsence of an opinion shall not prevent further action. The opinion of the Committee and that of the specialized section, together with a record of the proceedings, shall be forwarded to theCouncil and to the Commission. "18) Paragraphs 1 to 3 of Article 172 shall be repealed. 19) Article 173 shall be replaced by the following:"ARTICLE 173Without prejudice to other revenue, the budget shall be financedwholly from own resources. The Council, acting unanimously on a proposal from the Commissionand after consulting the European Parliament, shall lay downprovisions relating to the system of own resources of the Community, which it shall recommend to the Member States for adoption inaccordance with their respective constitutional requirements. "20) The following Article shall be inserted:"ARTICLE 173aWith a view to maintaining budgetary discipline, the Commission shallnot make any proposal for a Community act, or alter its proposals, oradopt any implementing measure which is likely to have appreciableimplications for the budget without providing the assurance that thatproposal or that measure is capable of being financed within the limitto the Community's own resources arising under provisions laid downby the Council pursuant to Article 173. "21) Article 179 shall be replaced by the following:"ARTICLE 179The Commission shall implement the budgets, in accordance with theprovisions of the regulations made pursuant to Article 183, on its ownresponsibility and within the limits of the appropriations, havingregard to the principles of sound financial management. The regulations shall lay down detailed rules for each institutionconcerning its part in effecting its own expenditure. Within the budgets, the Commission may, subject to the limits andconditions laid down in the regulations made pursuant to Article 183, transfer appropriations from one chapter to another or from onsubdivision to another. "22) Articles 180 and 180a shall be repealed. 23) Article 180b shall be replaced by the following:"ARTICLE 180b1. The European Parliament, acting on a recommendation from theCouncil which shall act by a qualified majority, shall give a dischargeto the Commission in respect of the implementation of the budget. Tothis end, the Council and the European Parliament in turn shallexamine the accounts and the financial statement referred to in Article179a, the annual report by the Court of Auditors together with thereplies of the institutions under audit to the observations of the Courtof Auditors, and any relevant special reports by the Court of Auditors. 2. Before giving a discharge to the Commission, or for any otherpurpose in connection with the exercise of its powers over theimplementation of the budget, the European Parliament may ask tohear the Commission give evidence with regard to the execution ofexpenditure or the operation of financial control systems. TheCommission shall submit any necessary information to the EuropeanParliament at the latter's request. 3. The Commission shall take all appropriate steps to act on theobservations in the decisions giving discharge and on the otherobservations by the European Parliament relating to the execution ofexpenditure, as well as on comments accompanying therecommendations on discharge adopted by the Council. At the request of the European Parliament or the Council, theCommission shall report on the measures taken in the light of theseobservations and comments and in particular of the instructions givento the departments which are responsible for the implementation of thebudgets. These reports shall also be forwarded to the Court ofAuditors. "24) Article 183 shall be replaced by the following:"ARTICLE 183The Council, acting unanimously on a proposal from the Commissionand after consulting the European Parliament and obtaining theopinion of the Court of Auditors, shall:(a) make Financial Regulations specifying in particular the procedureto be adopted for establishing and implementing the budget and forpresenting and auditing accounts;(b) determine the methods and procedure whereby the budget revenueprovided under the arrangements relating to the Community's ownresources shall be made available to the Commission, and determinethe measures to be applied, if need be, to meet cash requirements;(c) lay down rules concerning the responsibility of financial controllers, authorizing officers and accounting officers, and concerningappropriate arrangements for inspection. "25) The following Article shall be inserted:"ARTICLE 183aMember States shall take the same measures to counter fraudaffecting the financial interests of the Community as they take tocounter fraud affecting their own financial interests. Without prejudice to other provisions of this Treaty, Member Statesshall co-ordinate their actions aimed at protecting the financialinterests of the Community against fraud. To this end they shallorganize, with the help of the Commission, close and regular co-operation between the competent departments of theiradministrations. "26) Article 198)a) shall be replaced by the following:"(a) This Treaty shall not apply to the Faroe Islands. "27) Article 201 shall be replaced by the following:"ARTICLE 201The Community shall establish close co-operation with theOrganization for Economic Co-operation and Development, the detailsof which shall be determined by common accord. "28) Articles 204 and 205 shall be repealed. 29) Article 206 shall be replaced by the following:"ARTICLE 206The Community may conclude with one or more States or internationalorganizations agreements establishing an association involvingreciprocal rights and obligations, common action and specialprocedures. These agreements shall be concluded by the Council, actingunanimously after consulting the European Parliament. Where such agreements call for amendments to this Treaty, theseamendments shall first be adopted in accordance with the procedurelaid down in Article N of the Treaty on European Union. " TITLE5PROVISIONS ON A COMMON FOREIGN AND SECURITY POLICY ARTICLE JA common foreign and security policy is hereby established whichshall be governed by the following provisions. ARTICLE J. 11. The union and its Member States shall define and implement acommon foreign and security policy, governed by the provisions of theTitle and covering all areas of foreign and security policy. 2. The objectives of the common foreign and security policy shall be:- to safeguard the common values, fundamental interests andindependence of the Union;- to strengthen the security of the Union and its Member States in allways;- to preserve peace and strengthen international security, inaccordance with the principles of the United Nations Charter as well asthe principles of the Helsinki Final Act and the objectives of the ParisCharter;- to promote international co-operation;- to develop and consolidate democracy and the rule of law, andrespect for human rights and fundamental freedoms. 3. The Union shall pursue these objectives;- by establishing systematic co-operation between Member States inthe conduct of policy, in accordance with Article J. 2;- by gradually implementing, in accordance with Article J. 3, joint actionin the areas in which the Member States have important interests incommon. 4. The Member States shall support the Union's external and securitypolicy actively and unreservedly in a spirit of loyalty and mutualsolidarity. They shall refrain from any action which is contrary to theinterests of the Union or likely to impair its effectiveness as acohesive force in international relations. The Council shall ensure thatthese principles are complied with. ARTICLE J. 21. Member States shall inform and consult one another within theCouncil on any matter of foreign and security policy of general interestin order to ensure that their combined influence is exerted aseffectively as possible by means of concerted and convergent action. 2. Whenever it deems it necessary, the Council shall define a commonposition. Member States shall ensure that their national policies conform on thecommon positions. 3. Member States shall co-ordinate their action in internationalorganizations and at international conferences. They shall uphold thecommon positions in such fora. In international organizations and at international conferences wherenot all the Member States participate, those which do take part shalluphold the common positions. ARTICLE J. 3The procedure for adopting joint action in matters covered by foreignand security policy shall be the following:1. The Council shall decide, on the basis of general guidelines fromthe European Council, that a matter should be the subject of jointaction. Whenever the Council decides on the principle of joint action, it shalllay down the specific scope, the Union's general and specificobjectives in carrying out such action, if necessary its duration, andthe means, procedures and conditions for its implementation. 2. The Council shall, when adopting the joint action and at any stageduring its development, define those matters on which decisions areto be taken by a qualified majority. Where the Council is required to act by a qualified majority pursuant tothe preceding subparagraph, the votes of its members shall beweighted in accordance with Article 148(2) of the Treaty establishingthe European Community, and for their adoption, acts of the Councilshall require at least fifty-four votes in favour, cast by at least eightmembers. 3. If there is a change in circumstances having a substantial effect ona question subject to joint action, the Council shall review theprinciples and objectives of that action and take the necessarydecisions. As long as the Council has not acted, the joint action shallstand. 4. Joint actions shall commit the Member States in the positions theyadopt and in the conduct of their activity. 5. Whenever there is any plan to adopt a national position or takenational action pursuant to a joint action, information shall be providedin time to allow, if necessary, for prior consultations within the Council. The obligation to provide prior information shall not apply to measureswhich are merely a national transposition of Council decisions. 6. In cases of imperative need arising from changes in the situationand failing a Council decision, Member States may take the necessarymeasures as a matter of urgency having regard to the generalobjectives of the joint action. The Member State concerned shallinform the Council immediately of any such measures. 7. Should there be any major difficulties in implementing a joint action, a Member State shall refer them to the Council which shall discussthem and seek appropriate solutions. Such solutions shall not runcounter to the objectives of the joint action or impair its effectiveness. ARTICLE J. 41. The common foreign and security policy shall include all questionsrelated to the security of the Union, including the eventual framing of acommon defence policy, which might in time lead to a commondefence. 2. The union requests the Western European Union (WEU), which is anintegral part of the development of the Union, to elaborate andimplement decisions and actions of the Union which have defenceimplications. The Council shall, in agreement with the institutions ofthe WEU, adopt the necessary practical arrangements. 3. Issues having defence implications dealt with under this Articleshall not be subject to the procedures set out in Article J. 3. 4. The policy of the Union in accordance with this Article shall notprejudice the specific character of the security and defence policy ofcertain Member States and shall respect the obligations of certainMember States under the North Atlantic Treaty and be compatible withthe common security and defence policy established within thatframework. 5. The provisions of this Article shall not prevent the development ofcloser co-operation between two or more Member States on a bilaterallevel, in the framework of the WEU and the Atlantic Alliance, providedsuch co-operation does not run counter to or impede that provided forin this Title. 6. With a view to furthering the objective of this Treaty, and having inview the date of 1998 in the context of Article XII of the BrusselsTreaty, the provisions of this Article may be revised as provided for inArticle N(2) on the basis of a report to be presented in 1996 by theCouncil to the European Council, which shall include an evaluation ofthe progress made and the experience gained until then. ARTICLE J. 51. The Presidency shall represent the Union in matters coming withinthe common foreign and security policy. 2. The Presidency shall be responsible for the implementation ofcommon measures; in that capacity it shall in principle express theposition of the Union in international organizations and internationalconferences. 3. In the tasks referred to in paragraphs 1 and 2, the presidency shallbe assisted if needs be by the previous and next Member States tohold the Presidency. The Commission shall be fully associated inthese tasks. 4. Without prejudice to Article J. 2(3) and Article J. 3(4), Member Statesrepresented in international organizations or international conferenceswhere not all the Member States participate shall keep the latterinformed of any matter of common interest. Member States which are also members of the United Nations SecurityCouncil will concert and keep the other Member States fully informed. Member States which are permanent members of the Security Councilwill, in the execution of their functions, ensure the defence of thepositions and the interests of the union, without prejudice to theirresponsibilities under the provisions of the United Nations Charter. ARTICLE J. 6The diplomatic and consular missions of the Member States and theCommission Delegations in third countries and internationalconferences, and their representations to international organizations, shall co-operate in ensuring that the common positions and commonmeasures adopted by the Council are complied with and implemented. They shall step up co-operation by exchanging information, carryingout joint assessments and contributing to the implementation of theprovisions referred to in Article 8c of the Treaty establishing theEuropean Community. ARTICLE J. 7The Presidency shall consult the European Parliament on the mainaspects and the basic choices of the common foreign and securitypolicy and shall ensure that the views of the European Parliament areduly taken into consideration. The European Parliament shall be keptregularly informed by the Presidency and the Commission of thedevelopment of the Union's foreign and security policy. The European Parliament may ask questions of the Councils or makerecommendations to it. It shall hold an annual debate on progress inimplementing the common foreign and security policy. ARTICLE J. 81. The European Council shall define the principles of and generalguidelines for the common foreign and security policy. 2. The Council shall take the decisions necessary for defining andimplementing the common foreign and security policy on the basis ofthe general guidelines adopted by the European Council. It shallensure the unity, consistency and effectiveness of action by theUnion. The Council shall act unanimously, except for procedural questionsand in the case referred to in Article J. 3(2). 3. Any Member State or the Commission may refer to the Council anyquestion relating to the common foreign policy and may submitproposals to the Council. 4. In cases requiring a rapid decision, the Presidency, of its ownmotion, or at the request of the Commission or a Member State, shallconvene an extraordinary Council meeting within forty-eight hours or, in an emergency, within a shorter period. 5. Without prejudice to Article 151 of the Treaty establishing theEuropean Community, a Political Committee consisting of PoliticalDirectors shall monitor the international situation in the areas coveredby common foreign and security policy and contribute to the definitionof policies by delivering opinions to the Council at the request of theCouncil or on its own initiative. It shall also monitor theimplementation of agreed policies, without prejudice to theresponsibility of the Presidency and the Commission. ARTICLE J. 9The Commission shall be fully associated with the work carried out inthe common foreign and security policy field. ARTICLE J. 10On the occasion of any review of the security provisions under ArticleJ. 4, the Conference which is convened to that effect shall alsoexamine whether any other amendments need to be made toprovisions relating to the common foreign and security policy. ARTICLE J. 111. The provisions referred to in Articles 137, 138, 139 to 142, 146, 147, 150 to 153, 157 to 163 and 217 of the Treaty establishing theEuropean Community shall apply to the provisions relating to theareas referred to in this Title. 2. Administrative expenditure which the provisions relating to theareas referred to in this Title entail for the institutions shall be chargedto the budget of the European Communities. The Council may also:- either decide unanimously that operational expenditure to which theimplementation of those provisions gives rise is to be charged to thebudget of the European Communities; in that event, the budgetaryprocedure laid down in the Treaty establishing the EuropeanCommunity shall be applicable;- or determine that such expenditure shall be charged to the MemberStates, where appropriate in accordance with a scale to be decided. TITLE6PROVISIONS ON COOPERATION IN THE FIELDS OF JUSTICE ANDHOME AFFAIRS ARTICLE KCo-operation in the fields of justice and home affairs shall begoverned by the following provisions. ARTICLE K. 1For the purposes of achieving the objectives of the Union, in particularthe free movement of persons, and without prejudice to the powers ofthe European Community, Member States shall regard the followingareas as matters of common interest:1. Asylum policy;2. Rules governing the crossing by persons of the external borders ofthe Member States and the exercise of controls thereon;3. Immigration policy and policy regarding nationals of third countries;(a) conditions of entry and movement by nationals of third countrieson the territory of Member States;(b) conditions of residence by nationals of third countries on theterritory of Member States, including family reunion and access toemployment;(c) combatting unauthorized immigration, residence and work bynationals of third countries on the territory of Member States;4. Combating drug addiction in so far as this is not covered by 7 to 9;5. Combating fraud on an international scale in so far as this is notcovered by 7 to 9;6. Judicial co-operation in civil matters;7. Judicial co-operation in criminal matters;8. Customs co-operation;9. Police co-operation for the purposes of preventing and combatingterrorism, unlawful drug trafficking and other serious forms ofinternational crime, including if necessary certain aspects of customsco-operation, in connection with the organization of a Union-widesystem for exchanging information within a European Police Office(Europol). ARTICLE K. 21. The matters referred to in Article K. 1 shall be dealt with incompliance with the European Convention for the Protection of HumanRights and Fundamental Freedoms of 4 November 1950 and theConvention relating to the Status of Refugees of 28 July 1951 andhaving regard to the protection afforded by Member States to personspersecuted on political grounds. 2. This Title shall not affect the exercise of the responsibilitiesincumbent upon Member States with regard to the maintenance of lawand order and the safeguarding of internal security. ARTICLE K. 31. In the areas referred to in Article K. 1, Member States shall informand consult one another within the Council with a view to co-ordinatingtheir action. To that end, they shall establish collaboration between therelevant departments of their administrations. 2. The Council may:- on the initiative of any Member State or of the Commission, in theareas referred to in Article K. 1(1) to (6);- on the initiative of any Member State, in the areas referred to ArticleK1(7) to (9):(a) adopt joint positions and promote, using the appropriate form andprocedures, any co-operation contributing to the pursuit of theobjectives of the Union;(b) adopt joint action in so far as the objectives of the Union can beattained better by joint action than by the Member States actingindividually on account of the scale or effects of the action envisaged;it may decide that measures implementing joint action are to beadopted by a qualified majority;(c) without prejudice to Article 220 of the Treaty establishing theEuropean Community, draw up conventions which it shall recommendto the Member States for adoption in accordance with their respectiveconstitutional requirements. Unless otherwise provided by such conventions, measuresimplementing them shall be adopted within the Council by a majorityof two-thirds of the High Contracting Parties. Such conventions may stipulate that the Court of Justice shall havejurisdiction to interpret their provisions and to rule on any disputesregarding their application, in accordance with such arrangements asthey may lay down. ARTICLE K. 41. A Co-ordinating Committee shall be set up consisting of seniorofficials. In additions to its co-ordinating role, it shall be the task of theCommittee to;- give opinions for the attention of the Council, either at the Councilsrequest or on its own initiative;- contribute, without prejudice to Article 151 of the Treaty establishingthe European Community, to the preparation of the Council'sdiscussions in the areas referred to in Article K. 1 and, in accordancewith the conditions laid down in Article 100d of the Treaty establishingthe European Community, in the areas referred to in Article 100c of thatTreaty. 2. The Commission shall be fully associated with the work in the areasreferred to in this Title. 3. The Council shall act unanimously, except on matters of procedureand in cases where Article K. 3 expressly provides for other votingrules. Where the Council is required to act by a qualified majority, the votesof its members shall be weighted as laid down in Article 148(2) of theTreaty establishing the European Community, and for their adoption, acts of the Council shall require at least fifty-four votes in favour, castby at least eight members. ARTICLE K. 5Within international organizations and at international conferences inwhich they take part, Member States shall defend the commonpositions adopted under the provisions of this Title. ARTICLE K. 6The Presidency and the Commission shall regularly inform theEuropean Parliament of discussions in the areas covered by this Title. The Presidency shall consult the European Parliament on the principalaspects of activities in the areas referred to in this Title and shallensure that the views of the European Parliament are duly taken intoconsideration. The European Parliament may ask questions of the Council or makerecommendations to it. Each year, it shall hold a debate on theprogress made in implementation of the areas referred to in this Title. ARTICLE K. 7The provisions of this Title shall not prevent the establishment ordevelopment of closer co-operation between two or more MemberStates in so far as such co-operation does not conflict with, or impede, that provided for in this Title. ARTICLE K. 81. The provisions referred to in Article 137, 138, 139 top 142, 146, 147, 150 to 153, 157 to 163 and 217 of the Treaty establishing theEuropean Community shall apply to the provisions relating to theareas referred to in this Title. 2. Administrative expenditure which the provisions relating to theareas referred to in this Title entail for the institutions shall be chargedto the budget of European Communities. The Council may also:- either decide unanimously that operational expenditure to which theimplementation of those provisions gives rise is to be charged to thebudget of the European Communities; in that event, the budgetaryprocedure laid down in the treaty establishing the EuropeanCommunity shall be applicable;- or determine that such expenditure shall be charged to the MemberStates, where appropriate in accordance with a scale to be decided. ARTICLE K. 9The Council, acting unanimously on the initiative of the Commission ora Member State, may decide to apply Article 100c of the Treatyestablishing the European Community to action in areas referred to inArticle K. 1(1) to (6), and at the same time determine the relevant votingconditions relating to it. It shall recommend the Member States toadopt that decision in accordance with their respective constitutionalrequirements. TITLE7FINAL PROVISIONS ARTICLE LThe provisions of the Treaty establishing the European Community, the Treaty establishing the European Coal and Steel Community andthe Treaty establishing the European Atomic Energy Communityconcerning the powers of the Court of Justice of the EuropeanCommunities and the exercise of those powers shall apply only to thefollowing provisions of this Treaty:(a) provisions amending the Treaty establishing the EuropeanEconomic Community, the Treaty establishing the European Coal andSteel Community and the Treaty establishing the European AtomicEnergy Community;(b) the third subparagraph of Article K. 3(2)(c);(c) articles L to S. ARTICLE MSubject to the provisions amending the Treaty establishing theEuropean Economic Community with a view to establishing theEuropean Community, the Treaty establishing the European Coal andSteel Community and the Treaty establishing the European AtomicEnergy Community, and to these final provisions, nothing in thisTreaty shall effect the Treaties establishing the EuropeanCommunities or the subsequent Treaties and Acts modifying orsupplementing them. ARTICLE N1. The government of any Member State or the Commission maysubmit to the Council proposals for the amendment of the Treaties onwhich the Union is founded. If the Council, after consulting the European Parliament and, whereappropriate, the Commission, delivers an opinion in favour of calling aconference of representatives of the governments of the MemberStates, the conference shall be convened by the President of theCouncil for the purpose of determining by common accord theamendments to be made to those Treaties. The European Central Bankshall also be consulted in the case of institutional changes in themonetary area. The amendments shall enter into force after being ratified by all theMember States in accordance with their respective constitutionalrequirements. 2. A conference of representatives of the governments of the MemberStates shall be convened in 1996 to examine those provisions of thisTreaty for which revision is provided, in accordance with theobjectives set out in Articles A and B. ARTICLE OAny European State may apply to become a Member of the Union. Itshall address its application to the Council, which shall actunanimously after consulting the Commission and after receiving theassent of the European Parliament, which shall act by an absolutemajority of its component members. The conditions of admission and the adjustments to the Treaties onwhich the Union is founded which such admission entails shall be thesubject of an agreement between the Member States and the applicantState. This agreement shall be submitted for ratification by all thecontracting States in accordance with their respective constitutionalrequirements. ARTICLE P1. Articles 2 to 7 and 10 to 19 of the Treaty establishing a singleCouncil and a single Commission of the European Communities, signed in Brussels on 8 April 1965, are hereby repealed. 2. Article 2, Article 3(2) and Title III of the Single European Act signed inLuxembourg on 17 February 1986 and in the Hague on February 1986are hereby repealed. ARTICLE QThis Treaty is concluded for an unlimited period. ARTICLE R1. This Treaty shall be ratified by the High Contracting Parties inaccordance with their respective constitutional requirements. Theinstruments of ratification shall be deposited with the government ofthe Italian Republic. 2. This Treaty shall enter into force on 1 January 1993, provided thatall the instruments of ratification have been deposited, or, failing that, on the first day of the month following the deposit of the instrument ofratification by the last signatory State to take this step. ARTICLE SThis Treaty, drawn up in a single original in the Danish, Dutch, English, French, German, Greek, Irish, Italian, Portuguese and Spanishlanguages, the texts in each of these languages being equallyauthentic, shall be deposited in the archives of the government of theItalian Republic, which will transmit a certified copy to each of thegovernments of the other signatory States. IN WITNESS WHEREOF, the undersigned Plenipotentiaries havesigned this Treaty. Done at Maastricht on the seventh day of February one thousand ninehundred and ninety two[ here follow the signatures ] PROTOCOLON THE ACQUISITION OF PROPERTY IN DENMARKTHE HIGH CONTRACTING PARTIES, DESIRING to settle certain particular problems relating to Denmark, HAVING AGREED UPON the following provision, which shall beannexed to the Treaty establishing the European Community:Notwithstanding the provisions of this Treaty, Denmark may maintainthe existing legislation on the acquisition of second homes. PROTOCOLCONCERNING ARTICLE 119 OF THE TREATY ESTABLISHING THEEUROPEAN COMMUNITYTHE HIGH CONTRACTING PARTIES, HAVE AGREED UPON the following provision, which shall be annexedto the treaty establishing the European Community:For the purposes of Article 119 of this Treaty, benefits underoccupational social security schemes shall not be considered asremuneration if an in so far as they are attributable to periods ofemployment prior to 17 May 1990, except in the case of workers orthose claiming under them who have before that date initiated legalproceedings or introduced an equivalent claim under the applicablenational law. PROTOCOLON THE STATUTE OF THE EUROPEAN SYSTEM OF CENTRAL BANKSAND OF THE EUROPEAN CENTRAL BANKTHE HIGH CONTRACTING PARTIES, DESIRING to lay down the Statute of the European System of CentralBanks and of the European Central Bank provided for in Article 4a ofthe Treaty establishing the European Community. HAVE AGREED upon the following provisions, which shall be annexedto the treaty establishing the European Community: CHAPTER 1CONSTITUTION OF THE ESCBARTICLE 1The European System of Central Banks. 1. 1. The European System of Central Banks (ESCB) and the EuropeanCentral Bank (ECB) shall be established in accordance with Article 4aof this Treaty; they shall perform their tasks and carry on theiractivities in accordance with the provisions of this Treaty of thisStatute. 1. 2. In accordance with Article 106(1) on this Treaty, the ESCB shall becomposed of the ECB and of the central banks of the Member States("national central banks"). The Insitut monetaire luxembourgeois willbe the central bank of Luxembourg. CHAPTER IIOBJECTIVES AND TASKS OF ESCBARTICLE 2ObjectivesIn accordance with Article 105(1) of this Treaty, the primary objective ofthe ESCB shall be to maintain price stability. Without prejudice to theobjective of price stability, it shall support the general economicpolicies in the Community with a view to contributing to theachievement of the objectives of the Community as laid down in Article2 of this Treaty. The ESCB shall act in accordance with the principle ofan open market economy with free competition, favouring an efficientallocation of resources, and in compliance with the principles set outin Article 3a of this Treaty. ARTICLE 3Tasks3. 1. In accordance with Article 105(2) of this Treaty, the basic tasks tobe carried out through the ESCB shall be:- to define and implement the monetary policy of the Community;- to conduct foreign exchange operations consistent with theprovisions of Article 109 of this Treaty;- to hold and manage the official foreign reserves of the MemberStates;- to promote the smooth operation on payment systems. 3. 2. In accordance with Article 105(3) of this Treaty, the third indent ofArticle 3. 1 shall be without prejudice to the holding and managementby the governments of Member States of foreign exchange workingbalances. 3. 3. In accordance with Article 105(5) of this Treaty, the ESCB shallcontribute to the smooth conduct of policies pursued by the competentauthorities relating to the prudential supervision of credit institutionsand the stability of the financial system. ARTICLE 4Advisory functionsIn accordance with Article 105(4) of this Treaty:(a) the ECB shall be consulted:- on any proposed Community act in its fields of competence;- by national authorities regarding any draft legislative provision in itsfields of competence, but within the limits and under the conditions setout by the Council in accordance with the procedure laid down inArticle 42;(b) the ECB may submit opinions to the appropriate Communityinstitutions or bodies or to national authorities on matters in its fieldsof competence. ARTICLE 5Collection of statistical information5. 1. In order to undertake the tasks of the ESCB, the ECB, assisted bythe national central banks, shall collect the necessary statisticalinformation either from the competent national authorities or directlyfrom economic agents. For these purposes it shall co-operate with theCommunity institutions or bodies and with the competent authorities ofthe Member States or third countries and with internationalorganizations. 5. 2. The national central banks shall carry out, to the extent possible, the tasks described in Article 5. 1. 5. 3. The ECB shall contribute to the harmonization, where necessary, of the rules and practices governing the collection, compilation anddistribution of statistics in the areas within its fields of competence. 5. 4. The Council, in accordance with the procedure laid down in Article42, shall define the natural and legal persons subject to reportingrequirements, the confidentiality regime and the appropriateprovisions for enforcement. ARTICLE 6International co-operation6. 1. In the field of international co-operation involving the tasksentrusted to the ESCB, the ECB shall decide how the ESCB shall berepresented. 6. 2. The ECB and, subject to its approval, the national central banksmay participate in international monetary institutions. 6. 3. Articles 6. 1 and 6. 2 shall be without prejudice to Article 109(4) ofthis Treaty. CHAPTER IIIORGANIZATION OF THE ESCBARTICLE 7IndependenceIn accordance with Article 107 of this Treaty, when exercising thepowers and carrying out the tasks and duties conferred upon them bythis Treaty and this Statute, neither the ECB, nor a national centralbank, nor any member of their decision-making bodies shall seek ortake instructions from Community institutions or bodies, from anygovernment of a Member State or from any other body. TheCommunity institutions and bodies and the governments of theMember States undertake to respect this principle and not to seek toinfluence the members of the decision-making bodies of the ECB or ofthe national central banks in the performance of their tasks. ARTICLE 8General principleThe ESCB shall be governed by the decision-making bodies of theECB. ARTICLE 9The European Central Bank9. 1. The ECB which, in accordance with Article 106(2) of this Treaty, shall have legal personality, shall enjoy in each of the Member Statesthe most extensive legal capacity accorded to legal persons under itslaw; it may, in particular, acquire or dispose of movable andimmovable property and may be a party to legal proceedings. 9. 2. The ECB shall ensure that the tasks conferred upon the ESCBunder Article 105(2), (3) and (5) of this Treaty are implemented eitherby its own activities pursuant to this Statute or through the nationalcentral bank pursuant to Articles 12. 1 and 14. 9. 3 In accordance with Article 106(3) of this Treaty, the decision-making bodies of the ECB shall be the Governing Council and theExecutive Board. ARTICLE 10The Governing Council10. 1. In accordance with Article 109a(1) of this Treaty, the GoverningCouncil shall comprise the members of the Executive Board of theECB and the Governors of the national central banks. 10. 2. Subject to Article 10. 3, only members of the Governing Councilpresent in person shall have the right to vote. By way of derogationfrom this rule, the Rules of Procedure referred to in Article 12. 3 maylay down that members of the Governing Council may cast their voteby means of teleconferencing. These rules shall also provide that amember of the Governing Council who is prevented from voting for aprolonged period may appoint an alternate as a member of theGoverning Council. Subject to Articles 10. 3 and 11. 3, each member of the GoverningCouncil shall have one vote. Save as otherwise provided for in thisStatue, the Governing Council shall act by a simple majority. In theevent of a tie the President shall have the casting vote. In order for the Governing Council to vote, there shall be quorum oftwo-thirds of the members. If the quorum is not met, the President mayconvene and extraordinary meeting at which decisions may be takenwithout regard to the quorum. 10. 3. For any decisions to be taken under Articles 28, 29, 30, 32, 33and 51, the votes in the Governing Council shall be weightedaccording to the national central banks' shares in the subscribedcapital of the ECB. The weight of the votes of the members of theExecutive Board shall be zero. A decision requiring a qualifiedmajority shall be adopted if the votes cast in favour represent at leasttwo thirds of the subscribed capital of the ECB and represent at leasthalf of the shareholders. If a Governor in unable to be present, he maynominate an alternate to cast his weighted vote. 10. 4. The proceedings of the meetings shall be confidential. TheGoverning Council may decide to make the outcome of itsdeliberations public. 10. 5. The Governing Council shall meet at least ten times a year. ARTICLE 11The Executive Board11. 1. In accordance with Article 109a(2)(a) of this Treaty, the ExecutiveBoard shall comprise the President, the Vice-President and four othermembers. The members shall perform their duties on a full-time basis. Nomember shall engage in any occupation, whether gainful or not, unless exemption is exceptionally granted by the Governing Council. 11. 2. In accordance with Article 109a(2)(b) of this Treaty, the President, the Vice-President and the other Members of the Executive Board shallbe appointed from among persons of recognized standing andprofessional experience in monetary or banking matters by commonaccord of the governments of the Member States at the level of theHeads of State or of government, on a recommendation from theCouncil after it has consulted the European Parliament and theGoverning Council. Their term of office shall be 8 years and shall not be renewable. Only nationals of Member States may be members of the ExecutiveBoard. 11. 3. The terms and conditions of employment of the members of theExecutive Board, in particular their salaries, pensions and other socialsecurity benefits shall be the subject of contracts with the ECB andshall be fixed by the Governing Council on a proposal from aCommittee comprising three members appointed by the GoverningCouncil and three members appointed by the Council. The members ofthe Executive Board shall not have the right to vote on mattersreferred to in this paragraph. 11. 4. If a member of the Executive Board no longer fulfils theconditions required for the performance of his duties or if he has beenguilty of serious misconduct, the Court of Justice may, on applicationby the Governing Council or the Executive Board, compulsorily retirehim. 11. 5. Each member of the Executive Board present in person shallhave the right to vote and shall have, for that purpose, one vote. Saveas otherwise provided, the Executive Board shall act by a simplemajority of the votes cast. In the event of a tie, the President shallhave the casting vote. The voting arrangements shall be specified inthe Rules of Procedure referred to in Article 12. 3. 11. 6. The Executive Board shall be responsible for the currentbusiness of the ECB. 11. 7. Any vacancy on the Executive Board shall be filled by theappointment of a new member in accordance with Article 11. 2. ARTICLE 12Responsibilities of the decision-making bodies12. 1. The Governing Council shall adopt the guidelines and take thedecisions necessary to ensure the performance of the tasks entrustedto the ESCB under this Treaty and this Statute. The Governing Councilshall formulate the monetary policy of the Community including, asappropriate, decisions relating to intermediate monetary objectives, key interest rates and the supply of reserves in the ESCB and shallestablish the necessary guidelines for their implementation. The Executive Board shall implement monetary policy in accordancewith the guidelines and decisions laid down by the Governing Council. In doing so the Executive Board shall give the necessary instructionsto national central banks. In addition the Executive Board may havecertain powers delegated to it where the Governing Council sodecides. To the extent deemed possible and appropriate and without prejudiceto the provisions of this Article, the ECB shall have recourse to thenational central banks to carry out operations which form part of thetasks of the ESCB. 12. 2. The Executive Board shall have the responsibility for thepreparation of meetings of the Governing Council. 12. 3. The Governing Council shall adopt Rules of Procedure whichdetermine the internal organization of the ECB and its decision-makingbodies. 12. 4. The Governing Council shall exercise the advisory functionsreferred to Article 4. 12. 5. The Governing Council shall take the decisions referred to Article6. ARTICLE 13The President13. 1. The President or, in his absence, the Vice-President shall chairthe governing Council and the Executive Board of the ECB. 13. 2. Without prejudice to Article 39, the President or his nomineeshall represent the ECB externally. ARTICLE 14National Central Banks14. 1. In accordance with Article 108 of this Treaty, each Member Stateshall ensure, at the latest at the date of the establishment of the ESCB, that its national legislation, including the statues of its national centralbank, is compatible with this Treaty and this Statute. 14. 2. The statutes of the national central banks shall, in particular, provide that the term of office of a Governor of a national central bankshall be no less than 5 years. A Governor may be relieved from office only if he no longer fulfils theconditions required for the performance of his duties or if he has beenguilty of serious misconduct. A decision to this effect may be referredto the Court of Justice by the Governor concerned or the GoverningCouncil on grounds of infringement of this Treaty or of any rule of lawrelating to its application. Such proceedings shall be instituted withintwo months of the publication of the decision or of its notification to theplaintiff or, in the absence thereof, of the day on which it came toknowledge of the latter, as the case may be. 14. 3. The national central banks are an integral part of the ESCB andshall act in accordance with the guidelines and instructions of ECB. The Governing Council shall take the necessary steps to ensurecompliance with the guidelines and instructions of the ECB, and shallrequire that any necessary information be given to it. 14. 4 National central banks may perform functions other than thosespecified in this Statute unless the Governing Council finds, by amajority of two thirds of the votes cast, that these interfere with theobjectives and tasks of the ESCB. Such functions shall be performedon the responsibility and liability of national central banks and shallnot be regarded as being part of the functions of the ESCB. ARTICLE 15Reporting commitments. 15. 1. The ECB shall draw up and publish reports on the activities ofthe ESCB at least quarterly. 15. 2. A consolidated financial statement of the ESCB shall bepublished each week. 15. 3. In accordance with Article 109b(3) of this Treaty, the ECB shalladdress an annual report on the activities of the ESCB and on themonetary policy of both the previous and the current year to theEuropean Parliament, the Council and the Commission, and also theEuropean Council. 15. 4. The reports and statements referred to in this Article shall bemade available to interested parties free of charge. ARTICLE 16Bank notes. In accordance with Article 105a(1) of this Treaty, the Governing Councilshall have the exclusive right to authorize the issue of bank noteswithin the Community. The ECB and the national central banks mayissue such notes. The bank notes issued by the ECB and the nationalcentral banks shall be the only such notes to have the status of legaltender within the Community. The ECB shall respect as far as possible existing practices regardingthe issue and design of bank notes. CHAPTER IVMONETARY FUNCTIONS AND OPERATIONS OF THE ESCBARTICLE 17Accounts with the ECB and the national central banks. In order to conduct their operations, the ECB and the national centralbanks may open accounts for credit institutions, public entities andother market participants and accept assets, including book-entrysecurities, as collateral. ARTICLE 18Open market and credit operations. 18. 1. In order to achieve the objectives of the ESCB and to carry out itstasks, the ECB and the national central banks may:- operate in the financial markets by buying and selling outright (spotor forward) or under repurchase agreement and by lending orborrowing claims and marketable instruments, whether in Communityor in non-Community currencies, as well as precious metals;- conduct credit operations with credit institutions and other marketparticipants, with lending being based on adequate collateral. 18. 2. The ECB shall establish general principles for open market andcredit operations carried out by itself or the national central banks, including for the announcement of conditions under which they standready to enter into such transactions. ARTICLE 19Minimum reserves19. 1. Subject to Article 2, the ECB may require credit institutionsestablished in Member States to hold minimum reserves on accountswith the ECB and national central banks in pursuance of monetarypolicy objectives. Regulations concerning the calculation anddetermination of the required minimum reserves may be establishedby the Governing Council. In cases of non-compliance the ECB shallbe entitled to levy penalty interest and to impose other sanctions withcomparable effect. 19. 2. For the application of this Article, the Council shall, in accordancewith the procedure laid down in Article 42, define the basis forminimum reserves and the maximum reserves and the maximumpermissible ratios between those reserves and their basis, as well asthe appropriate sanctions in cases of non-compliance. ARTICLE 20Other instruments of monetary controlThe Governing Council may, by a majority of two thirds of the votescast, decide upon the use of such other operational methods ofmonetary control as it sees fit, respecting Article 2. The Council shall, in accordance with the procedure laid down inArticle 42, define the scope of such methods if they impose obligationson third parties. ARTICLE 21Operations with public entities. 21. 1. In accordance with Article 104 of the Treaty, overdrafts or anyother type of credit facility with the ECB or with the national centralbanks in favour of Community institutions or bodies, centralgovernments, regional, local or other public authorities, other bodiesgoverned by public law, or public undertakings of Member States shallbe prohibited, as shall the purchase directly from them by the ECB ornational central banks of debt instruments. 21. 2. The ECB and national central banks may act as fiscal agents forthe entities referred to in 21. 1. 21. 3. The provisions of this Article shall not apply to publicly-ownedcredit institutions which, in the context of the supply of reserves bycentral banks, shall be given the same treatment by national centralbanks and the ECB as private credit institutions. ARTICLE 22Clearing and payment systemsThe ECB and national central banks may provide facilities, and theECB may make regulations, to ensure efficient and sound clearing andpayment systems within the Community and with other countries. ARTICLE 23External operationsThe ECB and national central banks may:- establish relations with central banks and financial institutions inother countries and, where appropriate, with internationalorganizations;- acquire and sell spot and forward all types of foreign exchangeassets and precious metals; the term "foreign exchange asset" shallinclude securities and all other assets in the currency of any countryor units of account in whatever form held;- hold and manage the assets referred to in this Article;- conduct all types of banking transactions in relations with thirdcountries and international organizations, including borrowing andlending operations. ARTICLE 24Other operationsIn addition to operations arising from their tasks, the ECB and nationalcentral banks may enter into operations for their administrativepurposes or for their staff. CHAPTER VPRUDENTIAL SUPERVISIONARTICLE 25Prudential supervision25. 1. The ECB may offer advice to and be consulted by the Council, the Commission and the competent authorities of the Member Stateson the scope and implementation of Community legislation relating tothe prudential supervision of credit institutions and to the stability ofthe financial system. 25. 2. In accordance with any decision of the Council under Article105(6) of this Treaty, the ECB may perform specific tasks concerningpolicies relating to the prudential supervision of credit institutions andother financial institutions with the exception of insuranceundertakings. CHAPTER VIFINANCIAL PROVISIONS OF THE ESCBARTICLE 26Financial accounts26. 1. The financial year of the ECB and national central banks shallbegin on the first day of January and end on the last day of December. 26. 2. The annual accounts of the ECB shall be drawn up by theExecutive Board, in accordance with the principles established by theGoverning Council. The accounts shall be approved by the GoverningCouncil and shall thereafter be published. 26. 3. For analytical and operational purposes, the Executive Boardshall draw up a consolidated balance sheet of the ESCB, comprisingthose assets and liabilities of the national central banks that fall withinthe ESCB. 26. 4. For the application of this Article, the Governing Council shallestablish the necessary rules for standardizing the accounting andreporting of operations undertaken by the national central banks. ARTICLE 27Auditing27. 1. The account of the ECB and national central banks shall beaudited by independent external auditors recommended by theGoverning Council and approved by the Council. The auditors shallhave full power to examine all books and accounts of the ECB andnational central banks and obtain full information about theirtransactions. 27. 2. The provisions of Article 188c of this Treaty shall only apply toan examination of the operational efficiency of the management of theECB. ARTICLE 28Capital of the ECB28. 1. The capital of the ECB, which shall become operational upon itsestablishment, shall be ECU 5 000 million. The capital may beincreased by such amounts as may be decided by the GoverningCouncil acting by the qualified majority provided for in Article 10. 3, within the limits and under the conditions set by the Council under theprocedure laid down in Article 42. 28. 2. The national central banks shall be the sole subscribers to andholders of the capital of the ECB. The subscription of capital shall beaccording to the key established in accordance with Article 29. 28. 3. The Governing Council, acting by the qualified majority providedfor in Article 10. 3, shall determine the extent to which and the form inwhich the capital shall be paid up. 28. 4. Subject to Article 28. 5, the shares of the national central banks inthe subscribed capital of the ECB may not be transferred, pledged orattached. 28. 5. If the key referred to in Article 29 is adjusted, the national centralbanks shall transfer among themselves capital shares to the extentnecessary to ensure that the distribution of capital sharescorresponds to the adjusted key. The Governing Council shalldetermine the terms and conditions of such transfers. ARTICLE 29Key for capital subscription29. 1. When in accordance with the procedure referred to in Article109l(1) of this Treaty the ESCB and the ECB have been established, the key for subscription of the ECB's capital shall be established. Each national central bank shall be assigned a weighting in this keywhich shall be equal to the sum of:- 50% of the share of its respective Member State in the population ofthe Community in the penultimate year preceding the establishment ofthe ESCB;- 50% of the share of its respective Member State in the grossdomestic product at market prices of the Community as recorded in thelast five years preceding the penultimate year before theestablishment of the ESCB;The percentages shall be rounded up to the nearest multiple 0. 05percentage points. 29. 2 The statistical data to be used for the application of this Articleshall be provided by the Commission in accordance with the rulesadopted by the Council under the procedure provided for in Article 42. 29. 3. The weighting assigned to the national central banks shall beadjusted every five years after the establishment of the ESCB byanalogy with the provisions laid down in Article 29. 1. The adjusted keyshall apply with effect from the first day of the following year. 29. 4. The Governing Council shall take all other measures necessaryfor the application of this Article. ARTICLE 30Transfer of foreign reserve assets to the ECB30. 1. Without prejudice to Article 28, the ECB shall be provided by thenational central banks with foreign reserve assets, other than MemberStates' currencies, ECUs, IMF reserve positions and SDRs, up to anamount equivalent to ECU 50 000 million. The Governing Council shalldecide upon the proportion to be called up by the ECB following itsestablishment and the amounts called up at later dates. The ECB shallhave the full right to hold and manage the foreign reserves that aretransferred to it and to use them for the purposes set out in thisStatute. 30. 2. The contributions of each national central bank shall be fixed inproportion to its share in the subscribed capital of the ECB. 30. 3. Each national central bank shall be credited by the ECB with aclaim equivalent to its contribution. The Governing Council shalldetermine the denomination and remuneration of such claims. 30. 4. Further calls of foreign reserve assets beyond the limit set inArticle 30. 1. May be effected by the ECB, in accordance with Article30. 2, within the limits and under the conditions set by the Council inaccordance with the procedure laid down in Article 42. 30. 5. The ECB may hold and manage IMF reserve positions and SDRsand provide for the pooling of such assets. 30. 6. The Governing Council shall take all other measures necessaryfor the application of this Article. ARTICLE 31Foreign reserve assets held by national central banks31. 1. The national central banks shall be allowed to performtransactions in fulfilment of their obligations towards internationalorganizations in accordance with Article 23. 31. 2. All other operations in foreign reserve assets remaining with thenational central banks after the transfers referred to in Article 30, andMember States' transactions with their foreign exchange workingbalances shall, above a certain limit to be established within theframework of Article 31. 3, be subject to approval by the ECB in order toensure consistency with the exchange rate and monetary policies ofthe Community. 31. 3. The Governing Council shall issue guidelines with a view tofacilitating such operations. ARTICLE 32Allocation of monetary income of national central banks. 32. 1. The income accruing to the national central banks in theperformance of the ESCB's monetary policy function (hereinafterreferred to as "monetary income") shall be allocated at the end of eachfinancial year in accordance with the provisions of this Article. 32. 2. Subject to Article 32. 3, the amount of each national central bank'smonetary income shall be equal to its annual income derived from itsassets held against notes in circulation and deposit liabilities to creditinstitutions. These assets shall be earmarked by national centralbanks in accordance with guidelines to be established by theGoverning Council. 32. 3. If, after the start of the third stage, the balance sheet structuresof the national central banks do not, in the judgment of the GoverningCouncil, permit the application of Article 32. 2, the Governing Council, acting by a qualified majority, may decide that, by way of derogationform Article 32. 2, monetary income shall be measured according to analternative method for a period of not more than five years. 32. 4. The amount of each national central bank's monetary incomeshall be reduced by an amount equivalent to any interest paid by thatcentral bank on its deposit liabilities to credit institutions inaccordance with Article 19. The Governing Council may decide that national central banks shall beindemnified against costs incurred in connection with the issue ofbank notes or in exceptional circumstances for specific losses arisingfrom monetary policy operations undertaken for the ESCB. Indemnification shall be in a form deemed appropriate in the judgmentof the Governing Council; these amounts may be offset against thenational central banks' monetary income. 32. 5. The sum of the national central banks' monetary income shall beallocated to the national central banks in proportion to their paid-upshares in the capital of the ECB, subject to any decision taken by theGoverning Council pursuant to Article 33. 2. 32. 6. The clearing and settlement of the balances arising from theallocation of monetary income shall be carried out by the ECB inaccordance with guidelines established by the Governing Council. 32. 7. The Governing Council shall take all other measures necessaryfor the application of this Article. ARTICLE 33Allocation of net profits and losses of the ECB33. 1. The net profit of the ECB shall be transferred in the followingorder:(a) an amount to be determined by the Governing Council, which maynot exceed 20% of the net profit, shall be transferred to the generalreserve fund subject to a limit equal to a 100% of the capital;(b) the remaining net profit shall be distributed to the shareholders ofthe ECB in proportion to their paid-up shares. 33. 2. In the event of a loss incurred by the ECB, the shortfall may beoffset against the general reserve fund of the ECB and, if necessary, following a decision by the Governing Council, against the monetaryincome of the relevant financial year in proportion and up to theamounts allocated to the national central banks in accordance withArticle 32. 5. CHAPTER VIIGENERAL PROVISIONSARTICLE 34Legal acts34. 1. In accordance with Article 108a of this Treaty, the ECB shall:- make regulations to the extent necessary to implement the tasksdefined in Article 3. 1. , first indent, Articles 19. 1, 22 or 25. 2 and incases which shall be laid down in the acts of the Council referred to inArticle 42;- take decisions necessary for carrying out the tasks entrusted to theESCB under this Treaty and this Statute;- make recommendations and deliver opinions. 34. 2. A regulation shall have general application. It shall be binding inits entirety and directly applicable in all Member States. Recommendations and opinions shall have no binding force. A decision shall be binding in its entirety upon those to whom it isaddressed. Articles 190 to 192 of this Treaty shall apply to regulations anddecisions adopted by the ECB. The ECB may decide to publish its decisions, recommendations andopinions. 34. 3. Within the limits and under the conditions adopted by the Councilunder the procedure laid down in Article 42, the ECB shall be entitledto impose fines or periodic penalty payments on undertakings forfailure to comply with obligations under its regulations and decisions. ARTICLE 35Judicial control and related matters35. 1. The acts or omissions of the ECB shall be open to review orinterpretation by the Court of Justice in the cases and under theconditions laid down in this Treaty. The ECB may institute proceedingsin the cases and under the conditions laid down in this Treaty. 35. 2. Disputes between the ECB, on the one hand, and its creditors, debtors or any other person, on the other, shall be decided by thecompetent national courts, save where jurisdiction has been conferredupon the Court of Justice. 35. 3. The ECB shall be subject to the liability regime provided for inArticle 215 of this Treaty. The national central banks shall be liableaccording to their respective national laws. 35. 4. The Court of Justice shall have jurisdiction to give judgmentpursuant to any arbitration clause contained in a contract concluded byor on behalf of the ECB, whether that contract be governed by public orprivate law. 35. 5. A decision of the ECB to bring an action before the Court ofJustice shall be taken by the Governing Council. 35. 6. The Court of Justice shall have jurisdiction in disputesconcerning the fulfillment by a national central bank of obligationsunder this Statute. If the ECB considers that a national central bankhas failed to fulfill an obligation under this Statute, it shall deliver areasoned opinion on the matter after giving the national central bankconcerned the opportunity to submit its observations. If the nationalcentral bank concerned does not comply with the opinion within theperiod laid down by the ECB, the latter may bring the matter before theCourt of Justice. ARTICLE 36Staff36. 1. The Governing Council, on a proposal from the Executive Board, shall lay down the conditions of employment of the staff of the ECB. 36. 2. The Court of Justice shall have jurisdiction in any disputebetween the ECB and its servants within the limits and under theconditions laid down in the conditions of employment. ARTICLE 37SeatBefore the end of 1992, the decision as to where the seat of the ECBwill be established shall be taken by common accord of thegovernments of the Member States at the level of Heads of State or ofGovernment. ARTICLE 38Professional secrecy38. 1. Members of the governing bodies and the staff of the ECB andthe national central banks shall be required, even after their dutieshave ceased, not to disclose information of the kind covered by theobligation of professional secrecy. 38. 2. Persons having access to data covered by Communitylegislation imposing an obligation of secrecy shall be subject to suchlegislation. ARTICLE 39SignatoriesThe ECB shall be legally committed to third parties by the President orby two members of the Executive Board or by the signatures of twomembers of the staff of the ECB who have been duly authorized by thePresident to sign on behalf of the ECB. ARTICLE 40Privileges and immunities. The ECB shall enjoy in the territories of the Member States suchprivileges and immunities as are necessary for the performance of itstasks, under the conditions laid down in the Protocol on the Privilegesand Immunities of the European Communities annexed to the Treatyestablishing a Single Council and a Single Commission of theEuropean Communities. CHAPTER VIIIAMENDMENT OF THE STATUTE AND COMPLEMENTARY LEGISLATIONARTICLE 41Simplified amendment procedure41. 1. In accordance with Article 106(5) of this Treaty, Articles 5. 1, 5. 2, 5. 3, 17, 18, 19. 1, 22, 23, 24, 26, 32. 2, 32. 3, 32. 4, 32. 6, 33. 1(a) and 36of this Statute may be amended by the Council, acting either by aqualified majority on a recommendation from the ECB and afterconsulting the Commission, or unanimously on a proposal from theCommission and after consulting the ECB. In either case the assent ofthe European Parliament shall be required. 41. 2. A recommendation made by the ECB under this Article shallrequire a unanimous decision by the Governing Council. ARTICLE 42Complementary legislationIn accordance with Article 106(6) of this Treaty, immediately after thedecision on the date for the beginning of the third stage, the Council, acting by a qualified majority either on a proposal from theCommission and after consulting the European Parliament and theECB or on a recommendation from the ECB and after consulting theEuropean Parliament and the Commission, shall adopt the provisionsreferred to in Articles 4, 5. 4, 19. 2, 20, 28. 1, 29. 2, 30. 4, and 34. 3. Of thisStatute. CHAPTER IXTRANSITIONAL AND OTHER PROVISIONSFOR THE ESCBARTICLE 43General Provisions43. 1. A derogation as referred to in Article 109k(1) of this Treaty shallentail that the following Articles of this Statue shall not confer anyrights or impose any obligations on the Member State concerned: 3, 6, 9. 2, 12. 1, 14. 3, 16, 18, 19, 20, 22, 23, 26. 2, 27, 30, 31, 32, 33, 34, 50and 52. 43. 2. The central banks of Member States with derogation as specifiedin Article 109k(1) of this Treaty shall retain their powers in the field ofmonetary policy according to national law. 43. 3. In accordance with Article 109k(4) of this Treaty, "Member States"shall be read as "Member States without derogation" in the followingArticles of this Statute: 3, 11. 2, 19, 34. 2 and 50. 43. 4 "National central banks" shall be read as central banks ofMember States without a derogation" in the following Articles of thisStatute: 9. 2, 10. 1, 10. 3, 12. 1, 16, 17, 18, 22, 23, 27, 30, 31, 32, 33. 2and 52. 43. 5. "Shareholders" shall be read as "central banks of MemberStates without a derogation" in Articles 10. 3 and 33. 1. 43. 6. "Subscribed capital of the ECB" shall be read as "capital of theECB subscribed by the central banks of Member States without aderogation" in Articles 10. 3 and 30. 2. ARTICLE 44Transitional tasks of the ECBThe ECB shall take over those tasks of the EMI which, because of thederogations of one or more Member States, still have to be performedin the third stage. The ECB shall give advice in the preparations for the abrogation of thederogations specified in Article 109k of this Treaty. ARTICLE 45The General Council of the ECB45. 1. Without prejudice to Article 106(3) of this Treaty, the GeneralCouncil shall be constituted as a third decision-making body of theECB. 45. 2. The General Council shall compromise the President and Vice-President of the ECB and the Governors of the national central banks. The others members of the Executive Board may participate, withouthaving the right to vote, in meetings of the General Council. 45. 3. The responsibilities of the General Council are listed in full inArticle 47 of this Statute. ARTICLE 46Rules of procedure of the General Council46. 1. The President or, in his absence, the Vice-President of the ECBshall chair the General Council of the ECB. 46. 2. The President of the Council and a member of the Commissionmay participate, without having to right to vote, meetings of theGeneral Council. 46. 3. The President shall prepare the meetings of the General Council. 46. 4. By way of derogation from Article 12. 3, the General Council shalladopt its Rules of Procedure. 46. 5. The Secretariat of the General Council shall be provided by theECB. ARTICLE 47Responsibilities of the General Council47. 1. The General Council shall:- perform the tasks referred to in Article 44;- contribute to the advisory functions referred to in Articles 4 and 25. 1. 47. 2. The General Council shall contribute to:- the collection of statistical information as referred to in Article 5;- the reporting activities of the ECB as referred to in Article 15;- the establishment of the necessary rules for the application of Article26 as referred to in Article 26. 4;- the taking of all other measures necessary for the application ofArticle 29 as referred to Article 29. 4;- the laying down of the conditions of employment of the staff of theECB as referred to in Article 36. 47. 3. The General Council shall contribute to the necessarypreparations for irrevocably fixing the exchange rates of thecurrencies of Member States with a derogations against thecurrencies, or the single currency, of the Member States without aderogation, as referred to in Article 109(5) of this Treaty. 47. 4. The General Council shall be informed by the President of theECB of decisions of the Governing Council. ARTICLE 48Transitional provisions for the capital of the ECBIn accordance with Article 29. 1 each national central bank shall beassigned a weighting in the key for subscription of the ECB's capital. By way of derogation from Article 28. 3, central banks of MemberStates with a derogation shall not pay up their subscribed capitalunless the General Council, acting by as majority representing at leasttwo thirds of the subscribed capital of the ECB and at least half of theshareholders, decides that a minimal percentage has to be paid up asa contribution to the operational costs of the ECB. ARTICLE 49Deferred payment of capital, reserves and provisions of the ECB49. 1. The central bank of a Member State whose derogation has beenabrogated shall pay up its subscribed share of the capital of the ECBto the same extent as the central banks of other Member Stateswithout a derogation, and shall transfer to the ECB foreign reserveassets in accordance with Article 30. 1. The sum to be transferred shallbe determined by multiplying the ECU value at current exchange ratesof the foreign reserve assets which have already been transferred tothe ECB in accordance with Article 30. 1, by the ratio between thenumber of shares subscribed by the national central bank concernedand the number of shares already paid up by the other national centralbanks. 49. 2. In addition to the payment to be made in accordance with Article49. 1, the central bank concerned shall contribute to the reserves of theECB, to those provisions equivalent to reserves, and to the amountstill to be appropriated to the reserves and provisions correspondingto the balance of the profit and loss account as at 31 December of theyear prior to the abrogation of the derogation. The sum to becontributed shall be determined by multiplying the amount of thereserves, as defined above and as stated in the approved balancesheet of the ECB, by the ratio between the number of sharessubscribed by the central bank concerned and the number of sharesalready paid up the other central banks. ARTICLE 50Initial appointment of the members of the Executive Board. When the Executive Board of the ECB is being established, thePresident, the Vice-President and the other members of the ExecutiveBoard shall be appointed by common accord of the governments of theMember States at the level of Heads of State or of Government, on arecommendation from the Council and after consulting the EuropeanParliament and the Council of the EMI. The President of the ExecutiveBoard shall be appointed for 8 years. By way of derogation fromArticle 11. 2, the Vice-President shall be appointed for 4 years and theother members of the Executive Board for terms of office of between 5and 8 years. No term of office shall be renewable. The number ofmembers of the Executive Board may be smaller than provided for inArticle 11. 1, but in no circumstance shall it be less than four. ARTICLE 51Derogation from Article 3251. 1. If, after the start of the third stage, the Governing Council decidesthat the application of Article 32 results in significant changes innational central banks' relative income positions, the amount ofincome to allocated pursuant to Article 32 shall be reduced by auniform percentage which shall not exceed 60% in the first financialyear after the start of the third stage and which shall decrease by atleast 12 percentage points in each subsequent financial year. 51. 2. Article 51. 1. Shall be applicable for not more than five financialyears after the start of the third stage. ARTICLE 52Exchange of bank notes in Community currencies. Following the irrevocable fixing of exchange rates, the GoverningCouncil shall take the necessary measures to ensure that bank notesdenominated in currencies with irrevocably fixed exchange rates areexchanged by the national central banks at their respective parvalues. ARTICLE 53Applicability of the transitional provisionsIf and as long as there are Member States with a derogation Articles43 to 48 shall be applicable. PROTOCOLON THE STATUTE OF THE EUROPEAN MONETARY INSTITUTETHE HIGH CONTRACTING PARTIES, DESIRING to lay down the Statute of the European Monetary Institute, HAVE AGREED upon the following provisions, which shall be annexedto the Treaty establishing the European Community:ARTICLE 1Constitution and name1. 1. The European Monetary Institute (EMI) shall be established inaccordance with Article 109f of this Treaty; it shall perform its functionsand carry out its activities in accordance with the provisions of thisTreaty and of this Statute. 1. 2. The members of the EMI shall be the central banks of the MemberStates ("national central banks"). For the purposes of the Statute, theInstitut monetaire luxembourgeois shall be regarded as the centralbank of Luxembourg. 1. 3. Pursuant to Article 109f of this Treaty, both the Committee ofGovernors and the European Monetary Co-operation Fund (EMCF)shall be dissolved. All assets and liabilities of the EMCF shall passautomatically to the EMI. ARTICLE 2ObjectivesThe EMI shall contribute to the realization of the conditions necessaryfor the transition to the third stage of Economic and Monetary Union, inparticular by:- strengthening the co-ordination of monetary policies with a view toensuring price stability;- making the preparations required for the establishment of theEuropean System of Central Banks (ESCB), and for the conduct of asingle monetary policy and the creation of a single currency in thethird stage;- overseeing the development of the ECU. ARTICLE 3General principles3. 1. The EMI shall carry out the tasks and functions conferred upon itby this Treaty and this Statute without prejudice to the responsibility ofthe competent authorities for the conduct of the monetary policy withinthe respective Member States. 3. 2. The EMI shall act in accordance with the objectives and principlesstated in Article 2 of the Statute of the ESCB. ARTICLE 4Primary tasks4. 1. In accordance with Article 109f(2) of this Treaty, the EMI shall:- strengthen co-operation between the national central banks;- strengthen the co-ordination of the monetary policies of the MemberStates with the aim of ensuring price stability;- monitor the functioning of the European Monetary System (EMS);- hold consultations concerning issues falling within the competence ofthe national central banks and affecting the stability of financialinstitutions and markets;- take over the tasks of the EMCF; in particular it shall perform thefunctions referred to in Articles 6. 1, 6. 2 and 6. 3;- facilitate the use of the ECU and oversee its development, includingthe smooth functioning of the ECU clearing system. The EMI shall also:- hold regular consultations concerning the course of monetarypolicies and the use of monetary policy instruments;- normally be consulted by the national monetary authorities beforethey take decisions on the course of monetary policy in the context ofthe common framework for ex ante co-ordination. 4. 2. At the latest by 31 December 1996, the EMI shall specify theregulatory, organizational and logistical framework necessary for theESCB to perform its tasks in the third stage, in accordance with theprinciple of an open market economy with free competition. Thisframework shall be submitted by the Council of the EMI for decision tothe ECB at the date of its establishment. In accordance with Article 109f(3) of this Treaty, the EMI shall inparticular:- prepare the instruments and the procedures necessary for carryingout a single monetary policy in the third stage;- promote the harmonization, where necessary, of the rules andpractices governing the collection, compilation and distribution ofstatistics in the areas within its field of competence;- prepare the rules for operations to be undertaken by the nationalcentral banks in the framework of the ESCB;- promote the efficiency of cross-border payments;- supervise the technical preparation of ECU bank notes. ARTICLE 5Advisory functions. 5. 1. In accordance with Article 109f(4) of this Treaty, the Council of theEMI may formulate opinions or recommendations on the overallorientation of monetary policy and exchange rate policy as well as onrelated measures introduced in each Member State. The EMI maysubmit opinions or recommendations to governments and to theCouncil on policies which might affect the internal or externalmonetary situation in the Community and, in particular, the functioningof the EMS. 5. 2. The Council of the EMI may also make recommendations to themonetary authorities of the Member States concerning the conduct oftheir monetary policy. 5. 3. In accordance with Article 109f(6) of this Treaty, the EMI shall beconsulted by the Council regarding any proposed Community actwithin its field of competence. Within the limits and under the conditions set out by the Council actingby a qualified majority on a proposal from the Commission and afterconsulting the European Parliament and the EMI shall be consulted bythe authorities of the Member States on any draft legislative provisionwithin its field of competence, in particular with regard to Article 4. 2. 5. 4. In accordance with Article 109f(5) of this Treaty, the EMI maydecide to publish its opinions and its recommendations. ARTICLE 6Operational and technical functions6. 1. The EMI shall;- provide for the multilateralization of positions resulting frominterventions by the national central banks in Community currenciesand the multilateralization of intra-Community settlements;- administer the very short-term financing mechanism provided for bythe Agreement of 13 March 1979 between the central banks of theMember States of the European Economic Community laying down theoperating procedures for the European Monetary System (hereinafterreferred to as "EMS Agreement") and the short-term monetary supportmechanism provided for in the Agreement between the central banksof the Member States of the European Economic Community of 9February 1970, as amended;- perform the functions referred to in Article 11 of Council Regulation(EEC) No 1969/88 of 24 June 1988 establishing a single facilityproviding medium-term financial assistance for Member States'balances of payments. 6. 2. The EMI may receive monetary reserves from the national centralbanks and issue ECUs against such assets for the purpose ofimplementing the EMS Agreement. These ECUs may be used by theEMI and the national central banks as a means of settlement and fortransactions between them and the EMI. The EMI shall take thenecessary administrative measures for the implementation of thisparagraph. 6. 3. The EMI may grant to the monetary authorities of third countriesand to international monetary institutions the status of "Other Holders"of ECUs and fix the terms and conditions under which such ECUs maybe acquired, held or used by Other Holders. 6. 4. The EMI shall be entitled to hold and manage foreign exchangereserves as an agent for and at the request of national central banks. Profits and losses regarding these reserves shall be for the account ofthe national central bank depositing the reserves. The EMI shallperform this function on the basis of bilateral contracts in accordancewith rules laid down in a decision of the EMI. These rules shall ensurethat transactions with these reserves shall not interfere with themonetary policy and exchange rate policy of the competent monetaryauthority of any Member State and shall be consistent with theobjectives of the EMI and the proper functioning of the Exchange RateMechanism of the EMS. ARTICLE 7Other tasks7. 1. Once a year the EMI shall address a report to the Council on thestate of the preparations for the third stage. These reports shallinclude an assessment of the progress towards convergence in theCommunity, and cover in particular the adaptation of monetary policyinstruments and the preparation of the procedures necessary forcarrying out a single monetary policy in the third stage, as well as thestatutory requirements to be fulfilled for national central banks tobecome an integral part of the ESCB. 7. 2. In accordance with the Council decisions referred to in Article109f(7) of this Treaty, the EMI may perform other tasks for thepreparation of the third stage. ARTICLE 8IndependenceThe members of the Council of the EMI who are the representatives oftheir institutions shall, with respect to their activities, act according totheir own responsibilities. In exercising the powers and performing thetasks and duties conferred upon them by this Treaty and this Statute, the Council of the EMI may not seek or take any instructions fromCommunity institutions or bodies or governments of MemberStates. The Community institutions and bodies as well as thegovernments of the Member States undertake to respect this principleand not seek to influence the Council of the EMI in the performance ofits tasks. ARTICLE 9Administration9. 1. In accordance with Article 109f(1) of this Treaty, the EMI shall bedirected and managed by the Council of the EMI. 9. 2. The Council of the EMI shall consist of a President and theGovernors of the national central banks, on of whom shall be Vice-President. If a Governor is prevented from attending a meeting, hemay nominate another representative of his institution. 9. 3. The President shall be appointed by common accord of thegovernments of the Member States at the level of Heads of State or ofGovernment, on a recommendation from, as the case may be, theCommittee of Governors or the Council of the EMI, and after consultingthe European Parliament and the Council. The President shall beselected from among persons of recognized standing and professionalexperience in monetary or banking matters. Onlynationals of Member States may be President of the EMI. The Councilof the EMI shall appoint the Vice-President. The President and Vice-President shall be appointed for a period of three years. 9. 4. The President shall perform his duties on a full-time basis. Heshall not engage in any occupation, whether gainful or not, unlessexemption is exceptionally granted by the Council of the EMI. 9. 5. The President shall- prepare and chair meetings of the Council of the EMI;- without prejudice to Article 22, present the views of the EMIexternally;- be responsible for the day-to-day management of the EMI. In the absence of the President, his duties shall be performed by theVice-President. 9. 6. The terms and conditions of employment of the President, inparticular his salary, pension and other social security benefits, shallbe the subject of a contract with the EMI and shall be fixed by theCouncil of the EMI on a proposal from a Committee comprising threemembers appointed by the Committee of Governors or the Council ofthe EMI, as the case may be, and three members appointed by theCouncil. The President shall not have the right to vote on mattersreferred to in this paragraph. 9. 7. If the President no longer fulfils the conditions required for theperformance of his duties or if he has been guilty of seriousmisconduct, the Court of Justice may, on application by the Council ofthe EMI, compulsorily retire him. 9. 8. The Rules of Procedure of the EMI shall be adopted by the Councilof the EMI. ARTICLE 10Meetings of the Council of the EMI and voting procedures10. 1 The Council of the EMI shall meet at least ten times a year. Theproceedings of Council meetings shall be confidential. The Council ofthe EMI may, acting unanimously, decide to make the outcome of itsdeliberations public. 10. 2. Each member of the Council of the EMI or his nominee shallhave one vote. 10. 3. Save as otherwise provided for in this Statute, the Council of theEMI shall act by a simple majority of its members. 10. 4. Decisions to be taken in the context of Articles 4. 2, 5. 4, 6. 2, and6. 3 shall require unanimity of the members of the Council of the EMI. The adoption of opinions and recommendations under Articles 5. 1 and5. 2, the adoption of decisions under Articles 6. 4, 16 and 23. 6 and theadoption of guidelines under Article 15. 3 shall require a qualifiedmajority of two thirds of the members of the Council of the EMI. ARTICLE 11Interinstitutional co-operation and reporting requirements11. 1 The President of the Council and a member of the Commissionmay participate, without having the right to vote, in meetings of theCouncil of the EMI. 11. 2. The President of the EMI shall be invited to participate in Councilmeetings when the Council is discussing matters relating to theobjectives and tasks of the EMI. 11. 3. At a date to be established in the Rules of Procedure, the EMIshall prepare an annual report on its activities and on monetary andfinancial conditions in the Community. The annual report, together withthe annual accounts of the EMI, shall be addressed to the EuropeanParliament, the Council and the Commission and also to the EuropeanCouncil. The President of the EMI may, at the request of the EuropeanParliament or on his own initiative, be heard by the competentCommittees of the European Parliament. 11. 4. Reports published by the EMI shall be made available tointerested parties free of charge. ARTICLE 12Currency denominationThe operations of the EMI shall be expressed in ECUs. ARTICLE 13SeatBefore the end of 1992, the decision as to where the seat of the EMIwill be established shall be taken by common accord of thegovernments of the Member States at the level of Heads of State or ofGovernment. ARTICLE 14Legal capacityThe EMI, which in accordance with Article 109f(1) of this Treaty shallhave legal personality, shall enjoy in each of the Member States themost extensive legal capacity accorded to legal persons under theirlaw; it may, in particular, acquire or dispose of movable or immovableproperty and may be a party to legal proceedings. ARTICLE 15Legal acts. 15. 1. In the performance of its tasks, and under the conditions laiddown in this Statute, the EMI shall:- deliver opinions- make recommendations;- adopt guidelines, and take decisions, which shall be addressed tothe national central banks. 15. 2. Opinions and recommendations of the EMI shall have no bindingforce15. 3. The Council of the EMI may adopt guidelines laying down themethods for the implementation of the conditions necessary for theESCB to perform its functions in the third stage. EMI guidelines shallhave no binding force; they shall be submitted for decision to the ECB. 15. 4. Without prejudice to Article 3. 1, a decision of the EMI shall bebinding in its entirety upon those to whom it is addressed. Articles 190and 191 of this Treaty shall apply to these decisions. ARTICLE 16Financial resources. 16. 1. The EMI shall be endowed with its own resources. The size ofthe resources of the EMI shall be determined by the Council of the EMIwith a view to ensuring the income deemed necessary to cover theadministrative expenditure incurred in the performance of the tasksand functions of the EMI. 16. 2. The resources of the EMI determined in accordance with Article16. 1 shall be provided out of contributions by the national centralbanks in accordance with the key referred to in Article 29. 1 of theStatute of the ESCB and be paid up at the establishment of the EMI. For this purpose, the statistical data to be used for the determinationof the key shall be provided by the Commission, in accordance withthe rules adopted by the Council, acting by a qualified majority on aproposal from the Commission and after consulting the EuropeanParliament, the Committee of Governors and the Committee referred toin Article 109c of this Treaty. 16. 3. The Council of the EMI shall determine the form in whichcontributions shall be paid up. ARTICLE 17Annual accounts and auditing17. 1. The financial year of the EMI shall begin on the first day ofJanuary and end on the last day of December. 17. 2. The Council of the EMI shall adopt an annual budget before thebeginning of each financial year. 17. 3. The annual accounts shall be drawn up in accordance with theprinciples established by the Council of the EMI. The annual accountsshall be approved by the Council of the EMI and shall thereafter bepublished. 17. 4. The annual accounts shall be audited by independent externalauditors approved by the Council of the EMI. The auditors shall havefull power to examine all books and accounts of the EMI and to obtainfull information about its transactions. The provisions of Article 188c of this Treaty shall only apply to anexamination of the operational efficiency of the management of theEMI. 17. 5. Any surplus of the EMI shall be transferred in the following order(a) an amount to be determined by the Council of the EMI shall betransferred to the general reserve fund of the EMI. (b) any remaining surplus shall be distributed to the national centralbanks in accordance with the key referred to in Article 16. 2. 17. 6. In the event of a loss incurred by the EMI, the shortfall shall beoffset against the general reserve fund of the EMI. Any remainingshortfall shall be made good by contributions from the national centralbanks, in accordance with the key as referred to in Article 16. 2. ARTICLE 18Staff18. 1. The Council of the EMI shall lay down the conditions ofemployment of the staff of the EMI. 18. 2. The Court of Justice shall have jurisdiction in any disputebetween the EMI and its servants within the limits and under theconditions laid down in the conditions of employment. ARTICLE 19Judicial control and related matters. 19. 1. The acts or omissions of the EMI shall be open to review orinterpretation by the Court of Justice in the cases and under theconditions laid down in this Treaty. The EMI may institute proceedingsin the cases and under the conditions laid down in this Treaty. 19. 2. Disputes between the EMI, on the one hand, and its creditors, debtors or any other person, on the other, shall fall within thejurisdiction of the competent national courts, save where jurisdictionhas been conferred upon the Court of Justice. 19. 3. The EMI shall be subject to the liability regime provided for inArticle 215 of this Treaty. 19. 4. The Court of Justice shall have jurisdiction to give judgmentpursuant to any arbitration clause contained in a contract concluded byor on behalf of the EMI, whether that contract be governed by public orprivate law. 19. 5. A decision of the EMI to bring an action before the Court ofJustice shall be taken by the Council of the EMI. ARTICLE 20Professional Secrecy20. 1. Members of the Council of the EMI and the staff of the EMI shallbe required, even after their duties have ceased, not to discloseinformation of the kind covered by the obligation of professionalsecrecy. 20. 2. Persons having access to data covered by Communitylegislation imposing and obligation of secrecy shall be subject to suchlegislation. ARTICLE 21Privileges and immunitiesThe EMI shall enjoy in the territories of the Member States suchprivileges and immunities as are necessary for the performance of itstasks, under the conditions laid down in the Protocol on the Privilegesand Immunities of the European Communities annexed to the Treatyestablishing a Single Council and a Single Commission of theEuropean Communities. ARTICLE 22SignatoriesThe EMI shall be legally committed to third parties by the President orthe Vice-President or by the signatures of two members of the staff ofthe EMI who have been duly authorized by the President to sign onbehalf of the EMI. ARTICLE 23Liquidation of the EMI23. 1. In accordance with Article 109l of this Treaty, the EMI shall gointo liquidation on the establishment of the ECB. All assets andliabilities of the EMI shall then pass automatically to the ECB. Thelatter shall liquidate the EMI according to the provisions of this Article. The liquidation shall be completed by the beginning of the third stage. 23. 2. The mechanism for the creation of ECUs against gold and USdollars as provided for by Article 17 of the EMS agreement shall beunwound by the first day of the third stage in accordance with Article20 of the said Agreement. 23. 3. All claims and liabilities arising from the very short-termfinancing mechanism and the short-term monetary supportmechanism, under the Agreements referred to in Article 6. 1, shall besettled by the first day of the third stage. 23. 4. All remaining assets of the EMI shall be disposed of and allremaining liabilities of the EMI shall be settled. 23. 5. The proceeds of the liquidation described in Article 23. 4. Shall bedistributed to the national central banks in accordance with the keyreferred to in Article 16. 223. 6. The Council of the EMI may take the measures necessary for theapplication of Articles 23. 4. And 23. 5. 23. 7. Upon the establishment of the ECB, the President of the EMIshall relinquish his office. PROTOCOLON THE EXCESSIVE DEFICIT PROCEDURETHE HIGH CONTRACTING PARTIESDESIRING to lay down the details of the excessive deficit procedurereferred to in Article 104c of the treaty establishing the EuropeanCommunity, HAVE AGREED upon the following provisions, which shall be annexedto the Treaty establishing the European Community:ARTICLE 1The reference values referred to in Article 104c(2) of this Treaty are:- 3% for the ratio of the planned or actual government deficit to grossdomestic product at market prices;- 60% for the ratio of government debt to gross domestic product atmarket prices. ARTICLE 2In Article 104c of this Treaty and in this Protocol:- government means general government, that is central government, regional or local government and social security funds, to theexclusion of commercial operations, as defined in the EuropeanSystem of Integrated Economic Accounts;- deficit means net borrowing as defined in the European System ofIntegrated Economic Accounts;- investment means gross fixed capital formation as defined in theEuropean System of Integrated Economic Accounts;- debt means total gross debt at nominal value outstanding at the endof the year and consolidated between and within the sectors of generalgovernment as defined in the first indent. ARTICLE 3In order to ensure the effectiveness of the excessive deficit procedure, the governments of the Member States shall be responsible under thisprocedure for the deficits of general government as defined in the firstindent of Article 2. The Member States shall ensure that nationalprocedures in the Budgetary area enable them to meet theirobligations in this area deriving from this Treaty. The Member Statesshall report their planned and actual deficits and the levels of theirdebt promptly and regularly to the Commission. ARTICLE 4. The statistical data to be used for the application of this Protocol shallbe provided by the Commission. PROTOCOLON THE CONVERGENCE CRITERIA REFERRED TO IN ARTICLE 109j OFTHE TREATY ESTABLISHING THE EUROPEAN COMMUNITYTHE HIGH CONTRACTING PARTIES, DESIRING to lay down the details of the convergence criteria whichshall guide the Community in taking decisions on the passage to thethird stage of economic and monetary union, referred to in Article109j(1) of this Treaty, HAVE AGREED upon the following provisions, which shall be annexedto the Treaty establishing the European Community:ARTICLE 1The criterion on price stability referred to in the first indent of Article109j(1) of this Treaty shall mean that a Member State has a priceperformance that is sustainable and an average rate of inflation, observed over a period of one year before the examination, that doesnot exceed by more than 1 1/2 percentage points that of, at most, thethree best performing Member States in terms of price stability. Inflation shall be measured by means of the consumer price index ona comparable basis, taking into account differences in nationaldefinitions. ARTICLE 2The criterion on the government budgetary position referred to in thesecond indent of Article 109j(1) of this treaty shall mean that at thetime of the examination the Member State is not the subject of aCouncil decision under Article 104c(6) of this Treaty that an excessivedeficit exists. ARTICLE 3The criterion on participation in the Exchange Rate mechanism of theEuropean Monetary System referred to in the third indent of Article109j(1) of this Treaty shall mean that a Member State has respectedthe normal fluctuation margins provided for by the Exchange RateMechanism of the European Monetary System without severe tensionsfor at least the last two years before the examination. In particular, theMember State shall not have devalued its currency's bilateral centralrate against any other Member State's currency on its own initiativefor the same period. ARTICLE 4The criterion on the convergence of interest rates referred to in thefourth indent of Article 109j(1) of this Treaty shall mean that, observedover a period of one year before the examination, a Member State hashad an average nominal long-term interest rate that does not exceedby more than 2 percentage points that of, at most, the three bestperforming Member States in terms of price stability. Interest ratesshall be measured on the basis of long term government bonds orcomparable securities, taking into account differences in nationaldefinitions. ARTICLE 5The statistical data to be used for the application of this protocol shallbe provided by the Commission. ARTICLE 6The Council shall, acting unanimously on a proposal from theCommission and after consulting the European Parliament, the EMI orthe ECB as the case may be, and the Committee referred to in Article109c, adopt appropriate provisions to lay down the details of theconvergence criteria referred to Article 109j of this Treaty, which shallthen replace this Protocol. PROTOCOLAMENDING THE PROTOCOL ON THE PRIVILEGES AND IMMUNITIESOF THE EUROPEAN COMMUNITIESTHE HIGH CONTRACTING PARTIES, CONSIDERING that, in accordance with Article 40 of the Statute of theEuropean Central Bank and Article 21 of the Statute of the EuropeanMonetary Institute, the European Central Bank and the EuropeanMonetary Institute shall enjoy in the territories of the Member Statessuch privileges and immunities as are necessary for the performanceof their tasks, HAVE AGREED upon the following provisions, which shall be annexedto the Treaty establishing the European Community:SOLE ARTICLEThe Protocol on the Privileges and Immunities of the EuropeanCommunities, annexed to the Treaty establishing a Single Council anda Single Commission of the European Communities, shall besupplemented by the following provisions:"Article 23This Protocol shall also apply to the European Central Bank, to themembers of its organs and to its staff, without prejudice to theprovisions of the Protocol on the Statute of the European System ofCentral Banks and the European Central Bank. The European Central Bank shall, in addition, be exempt from anyform of taxation or imposition of a like nature on the occasion of anyincrease in its capital and from the various formalities which may beconnected therewith in the State where the bank has its seat. Theactivities of the Bank and of its organs carried on in accordance withthe Statute of the European System of Central Banks and of theEuropean Central Bank shall not be subject to any turnover tax. The above provisions shall also apply to the European MonetaryInstitute. Its dissolution or liquidation shall not give rise to anyimposition. " PROTOCOLON DENMARKTHE HIGH CONTRACTING PARTIES, DESIRING to settle certain particular problems relating to Denmark, HAVE AGREED UPON the following provisions, which shall be annexedto the Treaty establishing the European Community:The provisions of Article 14 of the Protocol on the Statute of theEuropean System of Central Banks and of the European System ofCentral Banks and of the European Central Bank shall not affect theright of the National Bank of Denmark to carry out its existing tasksconcerning those parts of the Kingdom of Denmark which are not partof the Community. PROTOCOLON PORTUGALTHE HIGH CONTRACTING PARTIES, DESIRING to settle certain particular problems relating to Portugal, HAVE AGREED upon the following provisions, which shall be annexedto the Treaty establishing the European Community:1. Portugal is hereby authorized to maintain the facility afforded to theAutonomous Regions of Azores and Madeira to benefit from aninterest-free credit facility with the Banco de Portugal under the termsestablished by existing Portuguese law. 2. Portugal commits itself to pursue its best endeavors in order to putan end to the above mentioned facility as soon as possible. PROTOCOLON THE TRANSITION TO THE THIRD STAGE OF ECONOMIC ANDMONETARY UNIONTHE HIGH CONTRACTING PARTIES, Declare the irreversible character of the Community's movement to thethird stage of Economic and Monetary Union by signing the new Treatyprovisions on Economic and Monetary Union. Therefore all Member States shall, whether they fulfil the necessaryconditions for the adoption of a single currency or not, respect the willfor the Community to enter swiftly into the third stage, and therefore noMember State shall prevent the entering into the third stage. If by the end of 1997 the date of the beginning of the third stage hasnot been set, the Member States concerned, the Communityinstitutions and other bodies involved shall expedite all preparatorywork during 1998, in order to enable the Community to enter the thirdstage irrevocably on 1 January 1999 and to enable the ECB and ESCBto start their full functioning from this date. This Protocol shall be annexed to the Treaty establishing theEuropean Community. PROTOCOLON CERTAIN PROVISIONS RELATING TO THE UNITED KINGDOM OFGREAT BRITAIN AND NORTHERN IRELANDTHE HIGH CONTRACTING PARTIES, RECOGNIZING that the United Kingdom shall not be obliged orcommitted to move to the third stage of economic and monetary unionwithout a separate decision to do so by its government andParliament, NOTING the practice of the government of the United Kingdom to fundits borrowing requirement by the sale of debt to the private sector. HAVE AGREED the following provisions, which shall be annexed to theTreaty establishing the European Community:1. The United Kingdom shall notify the Council whether it intends tomove to the third stage before the Council makes its assessmentunder Article 109j(2) of this Treaty;Unless the United Kingdom notifies the Council that it intends to moveto the third stage, it shall be under no obligation to do so. If no date is set for the beginning of the third stage under Article109j(3) of this Treaty, the United Kingdom may notify its intention tomove to the third stage before 1 January 1998. 2. Paragraphs 3 to 9 shall have effect if the United Kingdom notifiesthe Council that it does not intend to move to the third stage. 3. The United Kingdom shall not be included among the majority ofMember States which fulfil the necessary conditions referred to in thesecond indent of Article 109j(2) and the first indent of Article 109j(3) ofthis Treaty. 4. The United Kingdom shall retain its powers in the field of monetarypolicy according to national law. 5. Articles 3a(2), 104c(1), (9) and (11), 105(1) to (5), 105a, 107, 108, 108a, 109, 109a(1) and (2)(b) and 109l(4) and (5) of this Treaty shall notapply to the United Kingdom. In these provisions references to theCommunity or the Member States shall not include the United Kingdomand references to national central banks shall not include the Bank ofEngland. 6. Articles 109e(4) and 109h and i of this Treaty shall continue to applyto the United Kingdom. Articles 109c(4) and 109m shall apply to theunited Kingdom as if it had a derogation. 7. The voting rights of the United Kingdom shall be suspended inrespect of acts of the Council referred to in Articles listed in paragraph5. For this purpose the weighted votes of the United Kingdom shall beexcluded form any calculation of a qualified majority under Article109k(5) of this Treaty. The United Kingdom shall also have no right to participate in theappointment of the President, the Vice-President and the othermembers of the Executive Board of the ECB under Articles 109a(2)(b)and 109l(1) of this Treaty. 8. Articles 3, 4, 6, 7, 9. 2, 10. 1, 10. 3, 11. 2, 12. 1, 14, 16, 18 to 20, 22, 23, 26, 27, 30 to 34, 50 and 52 of the Protocol on the Statute of theEuropean System of Central Banks and of the European Central Bank("the Statute") shall not apply to the United Kingdom. In those Articles, references to the Community or the Member Statesshall not include the United Kingdom and references to nationalcentral banks or shareholders shall not include the Bank of England. References in Articles 10. 3 and 30. 2. Of the Statute to "subscribedcapital of the ECB" shall not include capital subscribed by the Bank ofEngland. 9. Article 109(3) of this Treaty and Articles 44 to 48 of the Statute shallhave effect, whether or not there is any Member State with aderogation, subject to the following amendments:(a) References in Article 44 ot the tasks of the ECB and the EMI shallinclude those tasks that still need to be performed in the third stageowing to any decision of the United kingdom not to move to that Stage. (b) In addition to the tasks referred to in Article 47 the ECB shall alsogive advice in relation to and contribute to the preparation of anydecision of the Council with regard to the United Kingdom taken inaccordance with paragraphs 10(a) and 10(c). (c) The Bank of England shall pay up its subscription to the capital ofthe ECB as a contribution of its operational costs on the same basisas national central banks of Member States with a derogation. 10. If the United Kingdom does not move to the third stage, it maychange its notification at any time after the beginning of that stage. Inthat event:(a) The United Kingdom shall have the right to move to the third stageprovided only that it satisfies the necessary conditions. The Council, acting at the request of the United Kingdom and under the conditionsand in accordance with the procedure laid down in Article 109k(2) ofthis Treaty, shall decide whether it fulfills the necessary conditions. (b) The Bank of England shall pay up its subscribed capital, transfer tothe ECB foreign reserve assets and contribute to its reserves on thesame basis as the national central bank of a Member State whosederogation has been abrogated. (c) The Council, acting under the conditions and in accordance with theprocedure laid down in Article 109(5) of this Treaty, shall take all othernecessary decisions to enable the United Kingdom to move to thethird stage. If the United Kingdom moves to the third stage pursuant to theprovisions of this protocol, paragraphs 3 to 9 shall cease to haveeffect. 11. Notwithstanding Articles 104 and 109e(3) of this Treaty and Article21. 1. Of the Statute, the government of the United Kingdom maymaintain its ways and means facility with the Bank of England if andso long as the United Kingdom does not move to the third stage. PROTOCOLON CERTAIN PROVISIONS RELATING TO DENMARKTHE HIGH CONTRACTING PARTIES, DESIRING to settle, in accordance with the general objectives of theTreaty establishing the European Community, certain particularproblems existing at the present time, TAKING INTO ACCOUNT that the Danish Constitution containsprovisions which may imply a referendum in Denmark prior to Danishparticipation in the third stage of Economic and Monetary Union, HAVE AGREED on the following provisions, which shall be annexed tothe Treaty establishing the European Community:1. The Danish Government shall notify the Council of its positionconcerning participation in the third stage before the Council makes itsassessment under Article 109j(2) of this Treaty. 2. In the event of a notification that Denmark will not participate in thethird stage, Denmark shall have an exemption. The effect of theexemption shall be that all Articles and provisions of this Treaty andthe Statute of the ESCB referring to a derogation shall be applicable toDenmark. 3. In such case, Denmark shall not be included among the majority ofMember States which fulfil the necessary conditions referred to in thesecond indent of Article 109j(2) and the first indent of Article 109j(3) ofthis Treaty. 4. As for the abrogation of the exemption, the procedure referred to inArticle 109k(2) shall only be initiated at the request of Denmark. 5. In the event of abrogation of the exemption status, the provisions ofthis Protocol shall cease to apply. PROTOCOLON FRANCETHE HIGH CONTRACTING PARTIES, DESIRING to take into account a particular point relating to France, HAVE AGREED upon the following provisions, which shall be annexedto the Treaty establishing the European Community. France will keep the privilege of monetary emission in its overseasterritories under the terms established by its national laws, and will besolely entitled to determine the parity of the CFP franc. PROTOCOLON SOCIAL POLICYTHE HIGH CONTRACTING PARTIES, NOTING that eleven Member States, that is to say the Kingdom ofBelgium, the Kingdom of Denmark and Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, Ireland, the Italian Republic, the Grand Duchy of Luxembourg, theKingdom of the Netherlands and the Portuguese Republic, wish tocontinue along the path laid down in the 1989 Social Charter; that theyhave adopted among themselves an Agreement to this end; that thisAgreement is annexed to this Protocol; that this Protocol and the saidAgreement are without prejudice to the provisions of this Treaty, particularly those relating to social policy which constitute an integralpart of the "acquis communautaire":1. Agree to authorize those eleven Member States to have recourse tothe institutions, procedures and mechanisms of the Treaty for thepurposes of taking among themselves and applying as far as they areconcerned the acts and decisions required for giving effect to theabovementioned Agreement. 2. The United Kingdom of Great Britain and Northern Ireland shall nottake part in the deliberations and the adoption by the Council ofCommission proposals made on the basis of the Protocol and theabove mentioned Agreement. By way of derogation from Article 148(2) of the Treaty, acts of theCouncil which are made pursuant to this Protocol and which must beadopted by a qualified majority shall be deemed to be so adopted ifthey have received at least forty-four votes in favour. The unanimity ofthe members of the Council, with the exception of the United Kingdomof Great Britain and Northern Ireland, shall be necessary for acts ofthe Council which must be adopted unanimously and for thoseamending the Commission proposal. Acts adopted by the Council and any financial consequences otherthan administrative costs entailed for the institutions shall not beapplicable to the United Kingdom of Great Britain and Northern Ireland. 3. This Protocol shall be annexed to the Treaty establishing theEuropean Community. AGREEMENTON SOCIAL POLICY CONCLUDED BETWEEN THE MEMBER STATESOF THE EUROPEAN COMMUNITY WITH THE EXCEPTION OF THEUNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND. The undersigned eleven HIGH CONTRACTING PARTIES, that is to say, the Kingdom of Belgium, the Kingdom of Denmark, the FederalRepublic of Germany, the Hellenic Republic, the Grand Duchy ofLuxembourg, the Kingdom of the Netherlands and the PortugueseRepublic (hereinafter referred to the "the Member States"), WISHING TO implement to the 1989 Social Charter on the basis of the"acquis communautaire", CONSIDERING the Protocol on social policy, HAVE AGREED as follows:ARTICLE 1The Community and the Member States shall have as their objectivesthe promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting highemployment and the combating of exclusion. To this end theCommunity and Member States shall implement measures which takeaccount of the diverse forms of national practices, in particular in thefield of contractual relations, and the need to maintain thecompetitiveness of the Community economy. ARTICLE 21. With a view to achieving the objectives of Article 1, the Communityshall support and complement the activities of the Member States inthe following fields:- improvement in particular of the working environment to protectworkers' health and safety;- working conditions;- the information and consultation of workers;- equality between men and women with regard to labour marketopportunities and treatment at work;- the integration of persons excluded from the labour market, withoutprejudice to Article 127 of the Treaty establishing the EuropeanCommunity (hereinafter referred to as "the Treaty"). 2. To this end, the Council may adopt, by means of directives, minimum requirements for gradual implementation, having regard tothe conditions and technical rules obtaining in each of the MemberStates. Such directives shall avoid imposing administrative, financialand legal constraints in a way which would hold back the creation anddevelopment of small and medium-sized undertakings. The Council shall act in accordance with the procedure referred to inArticle 189c of the Treaty after consulting the Economic and SocialCommittee. 3. However, the Council shall act unanimously on a proposal from theCommission, after consulting the European Parliament and theEconomic and Social Committee, in following areas:- social security and social protection of workers;- protection of workers where their employment contract is terminated;- representation and collective defence of the interests of worker andemployers, including co-determination, subject to paragraph 6;- conditions of employment for third-country nationals legally residingin Community territory;- financial contributions for promotion of employment and job-creation, without prejudice to the provisions relating to the Social Fund. 4. A Member State may entrust management and labour, at their jointrequest, with the implementation of directives adopted pursuant toparagraphs 2 and 3. In this case, it shall ensure that, no later than the date on which adirective must be transposed in accordance with Article 189, management and labour have introduced the necessary measures byagreement, the Member State concerned being required to take anynecessary measure enabling it at any time to be in a position toguarantee the results imposed by that directive. 5. The provisions adopted pursuant to this Article shall not preventany Member State from maintaining or introducing more stringentprotective measures compatible with the Treaty. 6. The provisions of this Article shall not apply to pay, the right ofassociation, the right to strike or the right to impose lock-outs. ARTICLE 31. The Commission shall have the task of promoting the consultationof management and labour at Community level and shall take anyrelevant measure to facilitate their dialogue by ensuring balancedsupport for the parties. 2. To this end, before submitting proposals in the social policy field, the Commission shall consult management and labour on the possibledirection of Community action. 3. If, after such consultation, the Commission considers Communityaction advisable, it shall consult management and labour on thecontent of the envisaged proposal. Management and labour shallforward to the Commission an opinion or, where appropriate, arecommendation. 4. On the occasion of such consultation, management and labour mayinform the Commission of their wish to initiate the process providedfor in Article 4. The duration of the procedure shall not exceed ninemonths, unless the management and labour concerned and theCommission decide jointly to extend it. ARTICLE 41. Should management and labour so desire, the dialogue betweenthem at Community level may lead to contractual relations, includingagreements. 2. Agreements concluded at Community level shall be implementedeither in accordance with the procedures and practices specific tomanagement and labour and the Member States or, in matters coveredby Article 2, at the joint request of the signatory parties, by a Councildecision on a proposal from the Commission. The Council shall act by qualified majority, except where theagreement in question contains one or more provisions relating to oneof the areas referred to in Article 2(3), in which case it shall actunanimously. ARTICLE 5With a view to achieving the objectives of Article 1 and withoutprejudice to the other provisions of the Treaty, the Commission shallencourage co-operation between the Member States and facilitate theco-ordination of their action in all social policy fields under thisAgreement. ARTICLE 61. Each Member State shall ensure that the principle of equal pay formale and female workers for equal work is applied. 2. For the purpose of this Article, "pay" means the ordinary basic orminimum wage or salary and any other consideration, whether in cashor in kind, which the worker receives directly or indirectly, in respect ofhis employment, from his employer. Equal pay without discrimination based on sex means:(a) that pay for the same work at piece rates shall be calculated on thebasis of the same unit of measurement. (b) that pay for work at time rates shall be the same for the same job. 3. This Article shall not prevent any Member State from maintaining oradopting measures providing for specific advantages in order to makeit easier for women to pursue a vocational activity or to prevent orcompensate for disadvantages in their professional careers. ARTICLE 7The Commission shall draw up a report each year on progress inachieving the objective of Article 1, including the demographicsituation in the Community. It shall forward the report to the EuropeanParliament, the Council and the Economic and Social Committee. The European Parliament may invite the Commission to draw upreports on particular problems concerning the social situation. DECLARATIONS1. Declaration on Article 2(2)The eleven High Contracting Parties note that in the discussions onArticle 2(2) of the Agreement it was agreed that the Community doesnot intend, in laying down minimum requirements for the protection ofthe safety and health of employees, to discriminate in a mannerunjustified by the circumstances against employees in small andmedium-sized undertakings. 2. Declaration on Article 4(2)The eleven High Contracting Parties declare that the first of thearrangements for application of the agreements between managementand labour at Community level - referred to in Article 4(2) - will consistin developing, by collective bargaining according to the rules of eachMember State, the content of the agreements, and that consequentlythis arrangement implies no obligation on the Member States to applythe agreements directly or to work out rules for their transposition, orany obligation to amend national legislation in force to facilitate theirimplementation. PROTOCOLON ECONOMIC AND SOCIAL COHESION THE HIGH CONTRACTINGPARTIES, RECALLING that the Union has set itself the objective of promotingeconomic and social progress, inter alia, through the strengthening ofeconomic and social cohesion;RECALLING that Article 2 of the Treaty establishing the EuropeanCommunity includes the task of promoting economic and socialcohesion and solidarity between Member States and that thestrengthening of economic and social cohesion figures among theactivities of the Community listed in Article 3;RECALLING that the provisions of Part Three, Title XIV, on economicand social cohesion as a whole provide the legal basis forconsolidating and further developing the Community's action in thefield of economic and social cohesion, including the creation of a newfund;RECALLING that the provisions of Part Three, Title XII on trans-European networks and Title XVI on environment envisage a CohesionFund to be set up before 31 December 1993;STATING their belief that progress towards Economic and MonetaryUnion will contribute to the economic growth of all Member States;NOTING that the Community's Structural Funds are being doubled inreal terms between 1987 and 1993, implying large transfers, especially as a proportion of GDP of the less prosperous MemberStates;NOTING that the European Investment Bank is lending large andincreasing amounts for the benefit of the poorer regions;NOTING the desire for greater flexibility in the arrangements forallocation from the Structural Funds;NOTING the desire for modulation of the levels of Communityparticipation in programmes and projects in certain countries;NOTING the proposal to take greater account of the relative prosperityof Member States in the system of own resources, REAFFIRM that the promotion of economic and social cohesion is vitalto the full development and enduring success of the Community, andunderline the importance of the inclusion of economic and socialcohesion in Articles 2 and 3 of this Treaty;REAFFIRM their conviction that the Structural Funds should continue toplay a considerable part in the achievement of Community objectivesin the field of cohesion;REAFFIRM their conviction that the European Investment Bank shouldcontinue to devote the majority of its resources to the promotion ofeconomic and social cohesion, and declare their willingness to reviewthe capital needs of the European Investment Bank as soon as this isnecessary for that purpose;REAFFIRM the need for a thorough evaluation of the operation andeffectiveness of the Structural Funds in 1992, and the need to review, on that occasion, the appropriate size of these Funds in the light of thetasks of the Community in the area of economic and social cohesion;AGREE that the Cohesion Fund to be set up before 31 December 1993will provide Community financial contributions to projects in the fieldsof environment and trans-European networks in Member States with aper capita GNP of less than 90% of the Community average whichhave a programme leading to the fulfilment of the conditions ofeconomic convergence as set out in Article 104c;DECLARE their intention of allowing a greater margin of flexibility inallocating financing from the Structural Funds to specific needs notcovered under the present Structural Funds regulations;DECLARE their willingness to modulate the levels of Communityparticipation in the context of programmes and projects of theStructural Funds, with a view to avoiding excessive increases inbudgetary expenditure in the less prosperous Member States;RECOGNIZE the need to monitor regularly the progress made towardsachieving economic and social cohesion and state their willingness tostudy all necessary measures in this respect;DECLARE their intention of taking greater account of the contributivecapacity of individual Member States in the system of own resources, and of examining means of correcting, for the less prosperousMember States, regressive elements existing in the present ownresources system;AGREE to annex this Protocol to the Treaty establishing the EuropeanCommunity. PROTOCOLON THE ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEEOF THE REGIONSTHE HIGH CONTRACTING PARTIESHAVE AGREED upon the following provision, which shall be annexedto this Treaty establishing the European Community:The Economic and Social Committee and the Committee of theRegions shall have a common organizational structure. PROTOCOLANNEXED TO THE TREATY ON EUROPEAN UNION AND TO THETREATIES ESTABLISHING THE EUROPEAN COMMUNITIESTHE HIGH CONTRACTING PARTIES, HAVE AGREED upon the following provision, which shall be annexedto the Treaty on European Union and to the Treaties establishing theEuropean Communities:Nothing in the Treaty on European Union, or in the Treatiesestablishing the European Communities, or in the Treaties or Actsmodifying or supplementing those Treaties, shall affect the applicationin Ireland of Article 40. 3. 3 of the Constitution of Ireland. FINAL ACT1. The Conferences of the Representatives of the Governments of theMember States convened in Rome on 15 December 1990 to adopt bycommon accord the amendments to be made to the Treatyestablishing the European Economic Community with a view to theachievement of political union and with a view to the final stages ofeconomic and monetary union, and those convened in Brussels on 3February 1992 with a view to amending the Treaties establishingrespectively the European Coal and Steel Community and theEuropean Atomic Energy Community as a result of the amendmentsenvisaged for the Treaty establishing the European EconomicCommunity have adopted the following texts:Ithe Treaty on European UnionIIProtocols1. Protocol on the acquisition of property in Denmark2. Protocol concerning Article 119 of the Treaty establishing theEuropean Community3. Protocol on the Statute of the European System of central banks andof the European Central Bank4. Protocol on the Statute of the European Monetary Institute5. Protocol on the excessive deficit procedure6. Protocol on the convergence criteria referred to in Article 109j of theTreaty establishing the European Community7. Protocol amending the Protocol on the privileges and immunities ofthe European Communities8. Protocol on Denmark9. Protocol on Portugal10. Protocol on the transition to the third stage of economic andmonetary union11. Protocol on certain provisions relating to the United Kingdom ofGreat Britain and Northern Ireland12. Protocol on certain provisions relating to Denmark. 13. Protocol on France14. Protocol on social policy, to which is annexed an agreementconcluded between the Member States of the European Communitywith the exception of the United Kingdom of Great Britain and NorthernIreland, to which two declarations are attached15. Protocol on economic and social cohesion16. Protocol on the Economic and Social Committee and the Committeeof the Regions17. Protocol annexed to the Treaty on European Union and to theTreaties establishing the European CommunitiesThe Conferences agreed that the Protocols referred to in 1 to 16 abovewill be annexed to the Treaty establishing the European Communityand that the Protocol referred to in 17 above will be annexed to theTreaty of European Union and to the Treaties establishing theEuropean Communities. 2. At the time of signature of these texts, the Conferences adopted thedeclarations listed below and annexed to this Final Act:IIIDeclarations1. Declaration on civil protection, energy and tourism2. Declaration on nationality of a Member State3. Declaration on Part Three, Titles III and VI, of the Treaty establishingthe European Community4. Declaration on Part Three, Title VI, of the Treaty establishing theEuropean Community5. Declaration on monetary co-operation with non-Community countries6. Declaration on monetary relations with the Republic of San Marino, the Vatican City and the Principality of Monaco7. Declaration on Article 73d of the Treaty establishing the EuropeanCommunity8. Declaration on Article 109 of the Treaty establishing the EuropeanEconomic Community9. Declaration on Part Three, Title XVI, of the Treaty establishing theEuropean Community10. Declaration on Articles 109, 130r and 130y of the Treatyestablishing the European Community11. Declaration on the Directive of 24 November 1988 (Emissions)12. Declaration of the European Development Fund13. Declaration on the role of national Parliaments in the EuropeanUnion14. Declaration on the Conference of the Parliaments15. Declaration on the number of members of the Commission and ofthe European Parliament16. Declaration on the hierarchy of Community Acts17. Declaration on the right of access to information18. Declaration on estimated costs under Commission proposals19. Declaration on the implementation of Community law20. Declaration on assessment of the environmental impact ofCommunity measures21. Declaration on the Court Auditors22. Declaration of the Economic and Social Committee23. Declaration on co-operation with charitable associations24. Declaration on the protection of animals25. Declaration on the representation of the interests of the overseascountries and territories referred to in Article 227(3) and (5)(a) and (b) ofthe Treaty establishing the European Community26. Declaration on the outermost regions of the Community27. Declaration on voting in the field of the common foreign andsecurity policy28 Declaration on practical arrangements in the field of the commonforeign and security policy. 29. Declaration on the use of languages in the field of the commonforeign and security policy30. Declaration on Western European Union31. Declaration on asylum32. Declaration on police co-operation33. Declaration on disputes between the ECB and the EMI and theirservantsDone at Maastricht this seventh day of February in the year onthousand nine hundred and ninety-twoDECLARATIONON CIVIL PROTECTION, ENERGY AND TOURISMThe Conference declares that the question of introducing into theTreaty establishing the European Community Titles relating to thespheres referred to in Article 3(t) of that Treaty will be examined, inaccordance with the procedure laid down in Article N(2) of the Treaty onEuropean Union, on the basis of a report which the Commission willsubmit to the Council by 1996 at the latest. The Commission declares that Community action in those spheres willbe pursued on the basis of the present provisions of the Treatiesestablishing the European Communities. DECLARATIONON NATIONALITY OF A MEMBER STATEThe Conference declares that, wherever in the Treaty establishing theEuropean Community reference is made to nationals of the MemberStates, the question whether an individual possesses the nationalityof a Member State shall be settled solely by reference to the nationallaw of the Member State concerned. Member States may declare, forinformation, who are to be considered their nationals for Communitypurposes by way of declaration lodged with the Presidency and mayamend any such declarations when necessary. DECLARATIONON PART THREE, TITLES III AND VI, OF THE TREATY ESTABLISHINGTHE EUROPEAN COMMUNITYThe Conference affirms that, for the purposes of applying theprovisions set out in Part Three, Title III, Chapter 4 on capital andpayments, and Title VI on economic and monetary policy, of thisTreaty, the usual practice, according to which the Council meets in thecomposition of Economic and Finance Ministers, shall be continued, without prejudice to Article 109j(2) to (4) and Article 109k(2). DECLARATIONON PART THREE, TITLE VI, OF THE TREATY ESTABLISHING THEEUROPEAN COMMUNITYThe Conference affirms that the President of the European Councilshall invite the Economic and Finance Ministers to participate inEuropean Council meetings when the European Council is discussingmatters relating to Economic and Monetary Union. DECLARATIONON MONETARY COOPERATION WITH NON-COMMUNITY COUNTRIESThe Conference affirms that the Community shall aim to contribute tostable international monetary relations. To this end the Communityshall be prepared to co-operate with other European countries and withthose non-European countries with which the Community has closeeconomic ties. DECLARATIONON MONETARY RELATIONS WITH THE REPUBLIC OF SAN MARINO, THE VATICAN CITY AND THE PRINCIPALITY OF MONACOThe Conference agrees that the existing monetary relations betweenItaly and San Marino and the Vatican City and between France andMonaco remain unaffected by the Treaty establishing the EuropeanCommunity until the introduction of the ECU as the single currency ofthe Community. The Community undertakes to facilitate such renegotiations of existingarrangements as might become necessary as a result of theintroduction of the ECU as a single currency. DECLARATIONON ARTICLE 73d OF THE TREATY ESTABLISHING THE EUROPEANCOMMUNITYThe Conference affirms that the right of Member States to apply therelevant provisions of their tax law as referred to in Article 73d(1)(a) ofthis Treaty will apply only with respect to the relevant provisionswhich exist at the end of 1993. However, this Declaration shall applyonly to capital movements between Member States and to paymentseffected between Member States. DECLARATIONON ARTICLE 109 OF THE TREATY ESTABLISHING THE EUROPEANCOMMUNITYThe Conference emphasizes that use of the term "formal agreements"in Article 109(1) is not intended to create a new category ofinternational agreement within the meaning of Community law. DECLARATIONON PART THREE, TITLE XVI, OF THE TREATY ESTABLISHING THEEUROPEAN COMMUNITYThe Conference considers that, in view of the increasing importance ofnature conservation at national, Community and international level, the Community should, in exercising its powers under the provisionsof Part Three, Title XVI, take account of the specific requirements ofthis area. DECLARATIONON ARTICLES 109, 130r AND 130y of THE TREATY ESTABLISHINGTHE EUROPEAN COMMUNITYThe Conference considers that the provisions of Article 109(5), Article130r(4), second subparagraph, and Article 130y do not affect theprinciples resulting from the judgment handed down by the Court ofJustice in the AETR case. DECLARATIONON THE DIRECTIVE OF 24 NOVEMBER 1988 (Emissions)The Conference declares that changes in Community legislationcannot undermine the derogations granted to Spain and Portugal until31 December 1999 under the Council Directive of 24 November 1988on the limitation of emissions of certain pollutants into the air fromlarge combustion plants. DECLARATIONON THE EUROPEAN DEVELOPMENT FUNDThe Conference agrees that the European Development Fund willcontinue to be financed by national contributions in accordance withthe current provisions. DECLARATIONON THE ROLE OF NATIONAL PARLIAMENTS IN THE EUROPEANUNIONThe Conference considers that it is important to encourage greaterinvolvement of national Parliaments in the activities of the EuropeanUnion. To this end, the exchange of information between the nationalParliaments and the European Parliament should be stepped up. Inthis context, the governments of the Member States will ensure, interalia, that national Parliaments receive Commission proposals forlegislation in good time for information or possible examination. Similarly, the Conference considers that it is important for contactsbetween the national Parliaments and the European Parliament to bestepped up, in particular through the granting of appropriate reciprocalfacilities and regular meetings between members of Parliamentinterested in the same issues. DECLARATIONON THE CONFERENCE OF THE PARLIAMENTSThe Conference invites the European Parliament and the nationalParliaments to meet as necessary as a Conference of the Parliaments(or "Assises")The Conference of the Parliaments will be consulted on the mainfeatures of the European Union, without prejudice to the powers of theEuropean Parliament and the rights of the national Parliaments. ThePresident of the European Council and the President of theCommission will report to each session of the Conference of theParliaments on the state of the Union. DECLARATIONON THE NUMBER OF MEMBERS OF THE COMMISSION AND OF THEEUROPEAN PARLIAMENTThe Conference agrees that the Member States will examine thequestions relating to the number of members of the Commission andthe number of members of the European Parliament no later than atthe end of 1992, with a view to reaching an agreement which willpermit the establishment of the necessary legal basis for fixing thenumber of members of the European Parliament in good time for the1994 elections. The decisions will be taken in the light, inter alia, ofthe need to establish the overall size of the European Parliament in anenlarged Community. DECLARATIONON THE HIERARCHY OF COMMUNITY ACTSThe Conference agrees that the Intergovernmental Conference to beconvened in 1996 will examine to what extent it might be possible toreview the classification of Community acts with a view to establishingan appropriate hierarchy between the different categories of act. DECLARATIONON THE RIGHT OF ACCESS TO INFORMATIONThe Conference considers that transparency of the decision-makingprocess strengthens the democratic nature of the institutions and thepublic's confidence in the administration. The Conference accordinglyrecommends that the Commission submit to the Council no later than1993 a report on measures designed to improve public access to theinformation available to the institutions. DECLARATIONON ESTIMATED COSTS UNDER COMMISSION PROPOSALSThe Conference notes that the Commission undertakes, by basingitself where appropriate on any consultations it considers necessaryand by strengthening its system for evaluating Community legislation, to take account in its legislative proposals of costs and benefits to theMember States' public authorities and all the parties concerned. DECLARATIONON THE IMPLEMENTATION OF COMMUNITY LAW1. The Conference stresses that it is central to the coherence and unityof the process of European construction that each Member Stateshould fully and accurately transpose into national law the CommunityDirectives addressed to it within the deadlines laid down therein. Moreover, the Conference, while recognizing that it must be for eachMember State to determine how the provisions of Community law canbest be enforced in the light of its own particular institutions, legalsystem and other circumstances, but in any event in compliance withArticle 189 of the Treaty establishing the European Community, considers it essential for the proper functioning of the Community thatthe measures taken by the different Member States should result inCommunity law being applied with the same effectiveness and rigouras in the application of their national law. 2. The Conference calls on the Commission to ensure, in exercising itspowers under Article 155 of this Treaty, that Member States fulfill theirobligations. It asks the Commission to publish periodically a full reportfor the Member States and the European Parliament. DECLARATIONON ASSESSMENT OF THE ENVIRONMENTAL IMPACT OF COMMUNITYMEASURESThe Conference notes that the Commission undertakes in itsproposals, and that the Member States undertake in implementingthose proposals, to take full account of their environmental impact andof the principle of sustainable growth. DECLARATIONON THE COURT OF AUDITORSThe Conference emphasizes the special importance it attaches to thetask assigned to the Court of Auditors by Articles 188a, 188b, 188c and206 of the Treaty establishing the European Community. It requests the other Community institutions to consider, together withthe Court of Auditors, all appropriate ways of enhancing theeffectiveness of its work. DECLARATION ON THE ECONOMIC AND SOCIAL COMMITTEEThe Conference agrees that the Economic and Social Committee willenjoy the same independence with regard to its budget and staffmanagement as the Court Auditors has enjoyed hitherto. DECLARATIONON COOPERATION WITH CHARITABLE ASSOCIATIONSThe Conference stresses the importance, in pursuing the objectives ofArticle 117 on the Treaty establishing the European Community, of co-operation between the latter and charitable associations andfoundations as institutions responsible for social welfareestablishments and services. DECLARATIONON THE PROTECTION OF ANIMALSThe Conference calls upon the European Parliament, the Council andthe Commission, as well as the Member States, when drafting andimplementing Community legislation on the common agriculturalpolicy, transport, the internal market and research, to pay full regard tothe welfare requirements of animals. DECLARATIONON THE REPRESENTATION OF THE INTERESTS OF THE OVERSEASCOUNTRIES AND TERRITORIES REFERRED TO IN ARTICLE 227(3)AND (5)(a) AND (b) OF THE TREATY ESTABLISHING THE EUROPEANCOMMUNITYThe Conference, noting that in exceptional circumstances divergencesmay arise between the interests of the Union and those of theoverseas countries and territories referred to in Article 227(3) and(5)(a) and (b), agrees that the Council will seek to reach a solutionwhich accords with the position of the Union. However, in the eventthat this proves impossible, the Conference agrees that the MemberState concerned may act separately in the interests of the saidoverseas countries and territories, without this affecting theCommunity's interests. The Member State concerned will give noticeto the Council and the Commission where such a divergence ofinterests is likely to occur and, when separate action provesunavoidable, make it clear that it is acting in the interests of overseasterritory mentioned above. This declaration also applies to Macao and East Timor. DECLARATIONON THE OUTERMOST REGIONS OF THE COMMUNITYThe Conference acknowledges that the outermost regions of theCommunity (the French overseas departments, Azores and Madeiraand Canary Islands) suffer from major structural backwardnesscompounded by several phenomena (remoteness, island status, smallsize, difficult topography and climate, economic dependence on a fewproducts), the permanence and combination of which severely restraintheir economic and social development. It considers that, while the provisions of the Treaty establishing theEuropean Community and secondary legislation apply automatically tooutermost regions, it is nonetheless possible to adopt specificmeasures to assist them inasmuch and as long as there is anobjective need to take such measures with a view to the economic andsocial development of those regions. Such measures should havetheir aim both the completion of the internal market and a recognitionof the regional reality to enable the outermost regions to achieve theaverage economic and social level of the Community. DECLARATIONON VOTING IN THE FIELD OF THE COMMON FOREIGN AND SECURITYPOLICYThe Conference agrees that, with regard to Council decisions requiringunanimity, Member States will, to the extent possible, avoidpreventing a unanimous decision where a qualified majority exists infavour of that decision. DECLARATIONON PRACTICAL ARRANGEMENTS IN THE FIELD OF THE COMMONFOREIGN AND SECURITY POLICYThe Conference agrees that the division of work between the PoliticalCommittee and the Committee of Permanent Representatives will beexamined at a later stage, as will the practical arrangements formerging the Political Co-operation Secretariat with the GeneralSecretariat of the Council and for co-operation between the latter andthe Commission. DECLARATION ON THE USE OF LANGUAGES IN THE FIELD OF THECOMMON FOREIGN AND SECURITY POLICYThe Conference agrees that the use of languages shall be inaccordance with the rules of the European Communities. For COREU communications, the current practice of European politicalco-operation will serve as a guide for the time being. All common foreign and security policy texts which are submitted to oradopted at meeting of the European Council and of the Council as wellas all texts which are to be published are immediately andsimultaneously translated into all the official Community languages. DECLARATIONON WESTERN EUROPEAN UNIONThe Conference notes the following declarations:I. DECLARATIONby Belgium, Germany, Spain, France, Italy, Luxembourg, theNetherlands, Portugal and the United Kingdom of Great Britain andNorthern Ireland, which are members of the Western European Unionand also members of the European Union onTHE ROLE OF THE WESTERN EUROPEAN UNION AND ITS RELATIONSWITH THE EUROPEAN UNION AND WITH THE ATLANTIC ALLIANCEIntroduction1. WEU Member States agree on the need to develop a genuineEuropean security and defence identity and a greater Europeanresponsibility on defence matters. This identity will be pursuedthrough a gradual process involving successive phases. WEU willform an integral part of the process of the development of theEuropean Union and will enhance its contribution to solidarity withinthe Atlantic Alliance. WEU Member States agree to strengthen the roleof WEU, in the longer term perspective of a common defence, compatible with that of the Atlantic Alliance. 2. WEU will be developed as the defence component of the EuropeanUnion and as a means to strengthen the European pillar of the AtlanticAlliance. To this end, it will formulate common European defencepolicy and carry forward its concrete implementation through thefurther development of its own operational role. WEU Member States take note of Article J. 4 relating to the commonforeign and security policy of the Treaty on European Union whichreads as follows:"1. The common foreign and security policy shall include all questionsrelated to the security of the Union, including the eventual framing of acommon defence policy, which might in time lead to a commondefence. 2. The union requests the Western Union (WEU), which is an integralpart of the development of the Union, to elaborate and implementdecisions and actions of the Union which have defence implications. The Council shall, in agreement with the institutions of the WEU, adoptthe necessary practical arrangements. 3. Issues having defence implications dealt with under this Articleshall not be subject to the procedures set out in Article J. 3. 4. The policy of the Union in accordance with this Article shall notprejudice the specific character of the security and defence policy ofcertain Member States and shall respect the obligations of certainMember States under the North Atlantic Treaty and be compatible withthe common security and defence policy established within thatframework. 5. The provisions of this Article shall not prevent the development ofcloser co-operation between two or more Member States on a bilaterallevel, in the framework of the WEU and the Atlantic Alliance, providedsuch co-operation does not run counter to or impede that provided forin this Title. 6. With a view to furthering the objective of this Treaty, and having inview the date of 1998 in the context of Article XII of the BrusselsTreaty, the provisions of this Article may be revised as provided for inArticle N(2) on the basis of a report to be presented in 1996 by theCouncil to the European Council, which shall include an evaluation ofthe progress made and the experience gained until then. "A. WEU's relations with European Union3. The objective is to build up WEU in stages as the defencecomponent of the European Union. To this end, WEU is prepared, atthe request of the European Union, to elaborate and implementdecisions and actions of the Union which have defence implications. To this end, WEU will take the following measures to develop a closeworking relationship with the Union:- as appropriate, synchronization of the dates and venues of meetingsand harmonization of working methods;- establishment of close co-operation between the Council andSecretariat-General of WEU on the one hand, and the Council of theUnion and General Secretariat of the Council on the other;- consideration of the harmonization of the sequence and duration ofthe respective Presidencies;- arranging for appropriate modalities so as to ensure that theCommission of the European Communities is regularly informed and, as appropriate, consulted on WEU activities in accordance with therole of the Commission in the common foreign and security policy asdefined in the Treaty on European Union;- encouragement of closer co-operation between the ParliamentaryAssembly of WEU and the European Parliament. The WEU Council shall, in agreement with the competent bodies of theEuropean Union, adopt the necessary practical arrangements. B. WEU's relations with the Atlantic Alliance4. The objective is to develop WEU as a means to strengthen theEuropean pillar of the Atlantic Alliance. Accordingly WEU is preparedto develop further the close working links between WEU and theAlliance and to strengthen the role, responsibilities and contributionsof WEU Member States in the Alliance. This will be undertaken on thebasis of the necessary transparency and complementarity betweenthe emerging European security and defence identity and the Alliance. WEU will act in conformity with the positions adopted in the AtlanticAlliance. - WEU Member States will intensify their co-ordination on Allianceissues which represent an important common interest with the aim ofintroducing joint positions agreed in WEU into the process ofconsultation in the Alliance which will remain the essential forum forconsultation among its members and the venue for agreement onpolicies bearing on the security and defence commitments of Alliesunder the North Atlantic Treaty. - Where necessary, dates and venues of meetings will besynchronized and working methods harmonized. - Close co-operation will be established between the Secretariats-General of WEU and NATO. C. Operational role of WEU5. WEU's operational role will be strengthened by examining anddefining appropriate missions, structures and means, covering inparticular:-WEU planning cell;- closer military co-operation complementary to the Alliance inparticular in the fields of logistics, transport, training and strategicsurveillance;- meetings of WEU Chiefs of Defence Staff;- military units answerable to WEU. Other proposals will be examined further including:- enhanced co-operation in the field of armaments with the aim ofcreating a European armaments agency;-development of the WEU Institute into a European Security andDefence Academy. Arrangements aimed at giving WEU a stronger operational role will befully compatible with the military dispositions necessary to ensure thecollective defence of all Allies. D. Other measures6. As a consequence of the measures set out above, and in order tofacilitate the strengthening of WEU's role, the seat of the WEU Counciland Secretariat will be transferred to Brussels. 7. Representation of the WEU Council must be such that the Council isable to exercise its functions continuously in accordance with ArticleVIII of the modified Brussels Treaty. Member States may draw on adouble-hatting formula, to be worked out, consisting of theirrepresentatives to the Alliance and to the European Union. 8. WEU notes that, in accordance with the provisions of Article J. 4(6)concerning the common foreign and security policy of the Treaty onEuropean Union, the Union will decide to review the provisions of thisArticle with a view to furthering the objective to be set by it inaccordance with the procedure defined. The WEU will re-examine thepresent provisions in 1996. This re-examination will take account ofthe progress and experience acquired and will extend to relationsbetween WEU and the Atlantic Alliance. II. DECLARATIONby Belgium, Germany, Spain, France, Italy, Luxembourg, theNetherlands, Portugal and the United Kingdom of Great Britain andNorthern Ireland which are members of the Western European Union. "The Member States of WEU welcome the development of theEuropean security and defence identity. They are determined, takinginto account the role of WEU as the defence component of theEuropean Union and as the means to strengthen the European pillar ofthe Atlantic Alliance, to put the relationship between WEU and theother European States on a new basis for the sake of stability andsecurity in Europe. In this spirit, they propose the following:States which are members of the European Union are invited toaccede to WEU on conditions to be agreed in accordance with ArticleXI of the modified Brussels Treaty, or to become observers if they sowish. Simultaneously, other European Member States of NATO areinvited to become associate members of WEU in a way which will givethem the possibility of participating fully in the activities of WEU. The Member States of WEU assume that treaties and agreementscorresponding with the above proposals will be concluded before 31December 1992. "DECLARATIONON ASYLUM1. The Conference agrees that, in the context of the proceedingsprovided for in Articles K. 1 and K. 3 of the provisions on co-operation inthe fields of justice and home affairs, the Council will consider as amatter of priority questions concerning Member States' asylumpolicies, with the aim of adoption by the beginning of 1993, commonaction to harmonize aspects of them, in the light of the workprogramme and timetable contained in the report on asylum drawn upat the request of the European Council meeting in Luxembourg on 28and 29 June 1991. 2. In this connection, the Council will also consider, by the end of1993, on the basis of a report, the possibility of applying Article K. 9 tosuch matters. DECLARATIONON POLICE CO-OPERATIONThe Conference confirms the agreement of the Member States on theobjectives underlying the German delegations's proposals at theEuropean Council meeting in Luxembourg on 28 and 29 June 1991. For the present, the Member States agree to examine as a matter ofpriority the drafts submitted to them, on the basis of the workprogramme and timetable agreed upon in the report drawn up at therequest of the Luxembourg European Council, and they are willing toenvisage the adoption of practical measures in areas such as thosesuggested by the German delegation, relating to the followingfunctions in the exchange of information and experience:- support for national criminal investigation and security authorities, inparticular in the co-ordination of investigations and search operations;- creation of data bases;- central analysis and assessment of information in order to take stockof the situation and identify investigative approaches;- collection and analysis of national prevention programmes forforwarding to Member States and for drawing up Europe-wideprevention strategies;- measures relating to further training, research, forensic matters andcriminal records departments. Member States agree to consider on the basis of a report, during 1994at the latest, whether the scope of such co-operation should beextended. DECLARATIONON DISPUTES BETWEEN THE ECB AND THE EMI AND THEIRSERVANTSThe Conference considers it proper that the Court of First Instanceshould hear this class of action in accordance with Article 168a of theTreaty establishing the European Community. The Conferencetherefore invites the institutions to adapt the relevant rulesaccordingly. Done at Maastricht on the seventh day of February one thousand ninehundred and ninety two[ here follow the signatures ] MAY1_92On 1 May 1992, in Guimaraes (Portugal), the High Contracting Partiesto the Treaty on European Union adopted the following Declaration: DECLARATION OF THE HIGH CONTRACTING PARTIES TO THE TREATYON EUROPEAN UNION The High Contracting Parties to the Treaty on European Union signedat Maastricht on the seventh day of February 1992, Having considered the terms of Protocol No 17 to the said Treaty onEuropean Union which is annexed to that Treaty and to the Treatiesestablishing the European Communities, Hereby give the followinglegal interpretation: That it was and is their intention that the Protocol shall not limitfreedom to travel between Member States or, in accordance withconditions which may be laid down, in conformity with Community law, by Irish legislation, to obtain or make available in Ireland informationrelating to services lawfully available in Member States. At the same time the High Contracting Parties solemly declare that, inthe event of a future constitutional amendment in Ireland whichconcerns the subject matter of Article 40. 3. 3. Of the Constitution ofIreland and which does not conflict with the intention of the HighContracting Parties hereinbefore expressed, they will, following theentry into force of the Treaty on European Union, be favourablydisposed to amending the said Protocol so as to extend its applicationto such constitutional amendment if Ireland so requests.