Selected Decisions and Selected Documents of the IMF, Fortieth Issue -- Surveillance over Monetary and Exchange Rate Policies: Members of Euro Area

Prepared by the Legal Department of the IMF
As updated as of April 30, 2019

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Exchange Arrangements and Surveillance
Surveillance over Monetary Unions


The Executive Board approves the modalities for conducting surveillance over the monetary and exchange rate policies of the members of the euro area, as set out in SM/98/257 (11/25/98).

Decision No. 11846-(98/125),

December 9, 1998,

effective December 11, 1998


The current frequency of Article IV consultations with individual euro-area countries, which are generally on the standard 12-month cycle, would be maintained, at least during the initial period of Stage 3 of EMU.1

  • • There would be twice-yearly staff discussions with EU institutions responsible for common policies in the euro area.2 For practical reasons, these discussions would be expected to be held separately from the discussions with individual euro-area countries, but would be considered an integral part of the Article IV process for each member. The discussions with individual euro-area countries would be clustered, to the extent possible, around the discussions with the relevant EU institutions.

  • • There would be an annual staff report and Board discussion on “The Monetary and Exchange Rate Policies of Euro-Area Countries in the Context of the Article IV Consultations with these Countries,” which would be considered part of the Article IV consultation process with individual euro-area countries. The paper would also cover economic policies from a regional perspective to provide an adequate setting for the discussions on monetary and exchange rate policies.3 A report on the second (follow-up) set of discussions would also be issued to the Board for information and to provide adequate context for bilateral consultations with euro-area countries that did not coincide broadly with the annual Board discussion on the euro area.

  • • There would be a summing up of the conclusion of the Board’s annual discussion on “The Monetary and Exchange Rate Policies of the Euro Area Countries in the Context of the Article IV Consultations with these Countries.” It would be cross-referenced in the summings up for the Article IV consultations with euro-area countries, which would be given at the conclusion of the Article IV process for each country. This approach would have the advantage of recognizing clearly the obligation of euro-area countries to consult with the Fund in this context. …

1 However, it is envisaged that there would be some scaling back of resources devoted to individual Article IV consultations in the area of monetary and exchange rate policies to provide the resources needed for surveillance of the common policies of the euro area.

2 As is done for Article IV consultations with national authorities, the staff would leave a concluding statement with the ECB at the end of the discussions.

3 As noted in BUFF/98/93 (9/24/98), while for each member of the EU fiscal policy remains the responsibility of national authorities, discussions at the EU level would also need to evaluate the fiscal position of the euro area as a whole in order to assess the stance of monetary and exchange rate policies and the coherence of macroeconomic policies. They would also need to cover developments in structural areas relevant to the Fund’s surveillance over the policies of members of the euro area as a whole. In this context, the staff missions referred to above would visit the European Commission.

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