HC Deb 08 June 1998 vol 313 cc441-2W
Mr. Mitchell

To ask the Chancellor of the Exchequer which body will guarantee the value of notional euro in Phase B of Stage Three of EMU from January 1999 to July 2002. [44459]

Mrs. Liddell

On 1 January 1999, the euro will become the actual and sole currency of participating member states. The old national currencies of these member states will continue only as denominations of the euro. The conversion rates between these currencies and the euro will be legally fixed. The European Central Bank will become responsible for euro monetary policy from this date onward.

Mr. Mitchell

To ask the Chancellor of the Exchequer what profits he estimates will derive to the United Kingdom from seigniorage if the United Kingdom participates in Stage Three of Economic and Monetary Union. [44456]

Mrs. Liddell

If the UK participated in Economic and Monetary Union, its share of the monetary income accruing to the national central banks would depend on a number of factors, including the number of other Member States in EMU, the level of note issue by the European Central Bank, and the level of ECB reserve requirements. It is impossible to estimate with any degree of certainty now the size of the UK's allocation if and when it joined the single currency.

Mr. Mitchell

To ask the Chancellor of the Exchequer how profits of seigniorage on euro notes and coins will be distributed among participants. [44453]

Mrs. Liddell

The method for allocating monetary income between national central banks in Stage Three of EMU is described in the Statute of the ESCB. The sum of monetary income accruing to the national central banks in the performance of the ESCB's monetary policy function will be allocated in proportion to each central bank's paid-up share in the capital of the ECB. National central banks' contributions to the capital of the ECB will be based on Member States' relative population and GDP.

Mr. Mitchell

To ask the Chancellor of the Exchequer what recent changes have been made to the remit of the European Union Monetary Committee; and what is its role in relation to(a) the EMI and (b) the ECB. [44455]

Mrs. Liddell

The remit of the Monetary Committee continues to be as set out in Article 109c(1) of the Treaty. In accordance with Article 109c(2) of the Treaty, the Monetary Committee will be replaced by an Economic and Financial Committee at the start of Stage Three of EMU. The ECB shall appoint two members of the Economic and Financial Committee. The Monetary Committee and the Economic and Financial Committee contribute to the preparation of the work of the Council, including with respect to matters involving the EMI and the ECB.