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Progressive convergence during stage one of EMU
Following the decision of the Madrid European Council (June 1989) that the first stage of EMU would begin on 1 July 1990, to strengthen economic policy coordination through a system of multilateral surveillance, in order to achieve the degree of economic convergence necessary for the success of the first stage.
Council Decision 90/141/EEC of 12 March 1990 on the attainment of progressive convergence of economic policies and performance during stage one of economic and monetary union [Official Journal L 78 of 24.03.1990].
The Council undertakes multilateral surveillance covering all aspects of economic policy, both short- and medium-term.
It applies the following principles: price stability, sound public finances and monetary conditions, sound balances of payments and open, competitive markets.
In restricted sessions, the deliberations of which may be made public, the Council may make economic policy suggestions and, upon a proposal of the Commission, issue economic policy recommendations.
Multilateral surveillance is based on:
- indicators of economic performance and economic policies, including monetary and budgetary policies;
- regular reports on national economic conditions, prospects and policies;
- periodic assessments of the economic situation of the Community and an annual report.
On a proposal from the Commission, the annual economic report is adopted by the Council, after consulting the European Parliament and the Economic and Social Committee.
If the Council perceives threats to the economic stability and cohesion of the Community, it may formulate country-specific recommendations with a view to encouraging the necessary policy corrections.
When events outside the Community threaten its economic stability and cohesion, consultation takes place in the appropriate Community bodies to consider possible measures.
In order to promote consistency between monetary and other economic policies, the chairman of the Committee of Governors of the Central Banks of the Member States is invited to participate in the relevant Council meetings.
The President of the Council and the Commission report regularly on the results of multilateral surveillance to the European Council and the European Parliament.
Governments bring the results of the multilateral surveillance to the attention of their national parliaments so that it can be taken into account in national policy-making.
5) FOLLOW-UP WORK
Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies [Official Journal L 209 of 02.08.1997].
This Regulation strengthens and clarifies the Treaty provisions on multilateral surveillance and budgetary discipline during the third stage of economic and monetary union (EMU).