Lecturer: Miljen Matijašević Session 4, 31 Mar 2015

1. Revision of the previous session 2. Economic and Monetary Union and the Euro 3. Vocabulary and Practice

Personal Income Tax

1. What is the advantage of the electronic services of the Tax Administration? 2. Name a few forms that can be submitted electronically! 3. What is necessary for accessing e-Tax services? 4. What is one of the main tasks of the e- Croatia programme?

Unit 6

 What do you remember about the following?  The EEC?  European Council  The Council of the EU

 EMU – the euro area (a.k.a. the eurozone)  Established on 1 January 2002, 10 years after the Treaty of Maastricht  Originally included 12 member states  Replaced national currencies What effect did the introduction of the single currency have on the everyday life of EU citizens? What could have been arguments against the introduction of the euro?

THE EURO TODAY  19 EU member states (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain)  6 states yet to join (Bulgaria, the Czech Republic, Croatia, Hungary, Poland, and Romania)  3 states have opted out of the EMU (Denmark, Sweden, the UK)

Non-member states using the euro:  The Vatican, San Marino, Monaco and Andorra  have signed agreements with the EU  use the euro and mint coins  Kosovo and Montenegro  no formal agreements  only use the euro

European Central Bank (ECB)  Set up to determine interest rates and maintain the value of the euro  Representatives of EMU states sit on the board The Euro Group  Finance ministers of EMU states  Meet informally one day before meetings of EcoFin (the financial configuration of the Council of the EU)

 The Werner Report (1970)  Werner – Luxembourg Prime Minister  First suggested that EEC economies and currencies be brought together  European Monetary System – EMS (1979)  Set up to control the variations in the exchange rates between EEC currencies  Allowed fluctuations between 2.25% and 6%

FURTHER STEPS TOWARDS THE EMU  Single European Act (1986)  Madrid European Council (1989) Jacques Delors (EC President) put forward a plan and timetable to set up the EMU  Treaty of Maastricht (1992) Formally set up the EMU Laid down the criteria for joining the EMU

REQUIREMENTS IN TERMS OF LIMITS AS REGARDS:  INFLATION Inflation may not be more than 1.5% higher than that of the average of 3 best performing member states  GOVERNMENT DEFICIT Not more than 3% of the GDP  PUBLIC BORROWING Not more than 60% of the GDP  CURRENCY FLUCTUATIONS Candidate country must have been part of the EMR II (Exchange Rate Mechanism) programme for 2 years  LONG-TERM INTEREST RATES Not more than 2% higher than in MSs with lowest inflation

 The Treaty of Maastricht  Protocols to the Treaty left the ‘opt-out’ option for Denmark, Sweden and the UK FURTHER STEPS  Amsterdam European Council (Jun 1997)  Commitment to budgetary discipline  Caution as regards deficit, unemployment  Luxembourg European Council (Dec 1997)  Decisions enabling EMU ministers to meet informally and strengthen monetary policy

 Helped open up the single market  Incrased stability – better for investments  Ease of use (cross-border shopping)  Simplified transactions and mergers

EMU - Euro Area single currency to opt out Euro Group euro convergence criteria (a.k.a. Maastricht criteria)

 Do the exercises on p.23 in your coursebook