European Central Bank Act Proposal


  • Commission

    European Central Bank Act

    Authored by Councillor Rushanara Ali (UK), Councillor Firoux (Inquista), and Commissioner Renata Kligenberg
    Presented by Councillor Rushanara Ali, supported by Cllr. Ralph Jaevons

    NOTING that the Constitution of the European Union (henceforth referred to as ?the Constitution?) is the supreme law of the land.

    EXPRESSING concern that not all constitutional requirements are being met by the current Office of Economics.

    EXPRESSING concern that the monetary policy of the European Union is the euro, and that all supranational transactions are conducted in this currency.

    NOTING that there is no place for euros to be printed, despite it being a mandate in the constitution.

    This proposal looks to bring into action the European Central Bank

    CODE

    Article 1

    (i) This Act shall establish the European Central Bank.

    (ii) The European Central Bank will be located in the Duchy of Europolis

    (iii) The European Central Bank will be a part of the Office of Economics, as expressed in the Constitution (Chapter III, Article 12.1).

    (iv) The European Central Bank will be held responsible to the Commissioner of Economics and the European Council

    (v) The European Central Bank will be capitalized by the member nations of the European Union at a rate of .001% of GDP in a one-time transaction. The European Central Bank will return the investment at a rate of 2% interest per year.

    (vi) As such, the European Council will represent the shareholders.

    Article 2

    (i) The European Central Bank will be headed by the President of the European Central Bank (referred to as ?the President?).

    (ii) The President will be elected to his office by members of the shareholders of the European Central Bank.

    (iii) The President will have the authority to set monetary policy of the Eurozone.

    (iv) This includes the ability to define and implement the monetary policy for the Eurozone, to conduct foreign exchange operations, to promote smooth operation of the financial market infrastructure, authorise the issue of euro banknotes and coins by national banks, purchase national bonds.

    (v) The President also has the authority to carry out orders that pertain to the aforementioned duties, known as explicit authority.

    (vi) The actions of the President of the European Central Bank must be approved by the shareholders of the European Central Bank. The actions must be approved by a simple majority.

    Debate ends at 14:30 GMT, 30/5/15
    Voting on amendments ends at 14;30 GMT, 1/6/15
    Final voting ends at 14:30 GMT, 3/6/15


  • ECoJ

    "I hugely applaud this legislation - therefore I formally supported it - and I am very glad to see the Commissioner for Economics has taken real, concrete action to get evenly real and concrete reform done. The government of Inimicus hopes this legislation is passed and made into law as soon as possible."

    Ralph Jaevons


  • Commission

    I am concerned that this central bank is planning to take funds from individual member states when, as far as I see, there is no need to do so. For example, Davishire does not use the Euro and has its own currency and its own central bank and as a result has no interest in investing in the setting up of a foreign currency union.

    Whilst I understand that the constitution requires a central bank, I feel that it should be a focus more for those that use the Euro than those that do not do so. As such, His Majesties Government does oppose this bill in the strongest possible terms.

    Rt Hon Sir Boris Johnson CEDM


  • Commission

    We hear the Davishirian concerns, however:

    We need a central bank to handle the REGIONAL currency that is the euro. It doesn't matter who uses it. It's the region's problem as it is the REGIONAL currency.

    Banks, like most things, need money to start. And the fact that the nations investing will make money on their investment as they will receive payments at 2% interest should be an encouraging sign.

    Councillor Rushanara Ali
    Councillor for the United Kingdom of Great Britain and Ireland


  • Commission

    My government is not happy with providing money to a bank that it will not need the services of, and that is one of the reasons that we oppose this bill. I think perhaps the creation of the ECB should take money from either the European Union budget surplus, or take money from those nations which use the Euro.


  • Commission

    We would have to rewrite the European Budget Bill that sends the surplus immediately back to the nations of Europe in order to use to fund this bank. Which would be more legislation and more delays on a constitutional obligation.


  • Commission

    I do not think there would have to be any further delays except for perhaps an addition to the budget. Instead of specifically using the surplus just add this onto the costs of the budget for the Office of Economics, it will see a reduction in the surplus, but if money is there why not use it?

    Even then, this region has been without a central bank for the Euro for some time, I do not feel some additional weeks would cause major harm.



  • I don't think Councillor Johnson comprehends what it takes to seed, print, maintain, and manage a major currency. (The RL Euro represents almost a quarter of ALL the currency in the world. The RP Euro's strongest members have larger economies and vastly more population than the entire RL Eurozone, so they'd probably need to circulate at least a comparable amount).

    It takes more to get a proper Euro running than we have in the entire EU budget. You can't just add some billions to the Econ Commission and call it a day. Maybe if Davishire had a currency important enough to remember what it's called, and with high enough international circulation to reach the minimum threshold of statistical significance, it would understand monetary affairs.

    There is practically no downside to the non-member contribution system. Davishire's one-time contribution would be about 4.4 billion euros, which it would receive back from the bank in full plus interest of at least 87.9 million if we adopt the 2% rate. That's 87.9 million in FREE MONEY for you! If that's too low, just propose an amendment with a higher interest rate. The Duxburian Union is considering trying 3.5%, because 2% is too close to inflation and we have more money on the line. If you don't trust the credit of the ECB and think there's too much risk, propose a higher rate!

    Even though the Duxburian Union officially does not hold the Euro as legal tender, its stability and circulation is still important to us. Duxburians employed in Europolis rely on a stable exchange rate for their quality of living. Importers and exporters rely on a stable exchange rate for their goods and services. Investors rely on a stable exchange rate for driving global economic development. The current situation of multiple Euros being printed without central regulation just doesn't work.

    The Duxburian Union most definitely supports getting the Euro off the ground as a partner, it's the most sensible method.

    Acwellan Devoy
    Councillor of the Duxburian Union


  • ECoJ

    I note that in the debate encouraged by the Commissioner for Economics on this matter, which can be read here, that some three weeks ago I asked Madame Commissioner for details as to which members used the Euro as their currency.

    The Commissioner did not deign to respond to my request, though her Cousin did try to act as her cheerleader in raising support for the Establishment of a Central Bank.

    The fact remains that before we establish the Central Bank we need to determine whether the Euro that the Bank controls will be a hard or a soft currency, as this will affect how the Bank is constituted. We also need to consider the affect that the creation will have on the Sovereignty of any state that does use the Euro.

    The Commissioner made it clear in the Election Debate that she holds a personal dislike of me, but that should not prevent her from answering my valid questions and concerns.

    Unless the Government of the Federal Republics of Framptonia is satisfied that the proposed Act constitutes the Bank in the most appropriate manner, then I shall be voting against the proposal.

    Lucinda Bareham


  • Commission

    The Government of Davishire is not satisfied with this. I therefore propose the following amendments,

    Amendment 1

    QUOTE

    (ii) The President will be elected to his office by members of the shareholders of the European Central Bank, elections shall take place every 12 months.[

    Amendment 2

    QUOTE

    (v) The European Central Bank will be capitalized by the member nations of the European Union at a rate of .001% of GDP in a one-time transaction. The European Central Bank will return the investment at a rate of 5% interest per year.

    Amendment 3

    Does insert the following

    QUOTE

    (VII) The President of the European Central Bank has no authority over non-Euro currencies


  • Commission

    I think we can agree that the Davishirian councillor's amendments are most agreeable, although the last one is redundant as the ECB only has authority over the regional currency anyway. But this is why we have a democratic body.

    I applaud my colleague for realising the need for this organisation.

    Rushanara Ali



  • The Incorporated States of Almiro see the need for a central currency managing system. They do also see the concerns put forward by Davishire, and as such, the Almirian government wishes to express it's support for

    • Amendment 1
    • Amendment 2As mister Rushanara Ali already stated, amendment 3 is redundant, and our policy is to try and keep legislation as minimal as possible, so we do not support the amendment 3.

  • Mass Effect RP

    Voting on amendments has begun. I'll extend it by 24 hours, so it'll now end at 14:30 GMT, 2/6/15.

    I, John Walters, on behalf of the Twelve Commonwealths of Halsberg, vote FOR Councillor Johnson's first and second amendments.

    I vote AGAINST his third amendment.


  • Commission

    I, Rushanara Ali, on behalf of the United Kingdom of Great Britain and Ireland, vote FOR Councillor Johnson's first and second amendments, and AGAINST the third amendment.


  • ECoJ

    The government of Inimicus votes FOR amendments one and two, and AGAINST amendment three.

    Ralph Jaevons



  • I, Acwellan Devoy, on behalf of the Duxburian Union, vote FOR Councillor Johnson's 2nd amendment, and his 1st amendment without the typo on the end of it. I vote AGAINST his 3rd amendment.


  • Commission

    The amendment phase has ended, and the first two amendments have been passed and added to the final bill.

    QUOTE

    Article 1

    (i) This Act shall establish the European Central Bank.

    (ii) The European Central Bank will be located in the Duchy of Europolis

    (iii) The European Central Bank will be a part of the Office of Economics, as expressed in the Constitution (Chapter III, Article 12.1).

    (iv) The European Central Bank will be held responsible to the Commissioner of Economics and the European Council

    (v) The European Central Bank will be capitalized by the member nations of the European Union at a rate of .001% of GDP in a one-time transaction. The European Central Bank will return the investment at a rate of 5% interest per year.

    (vi) As such, the European Council will represent the shareholders.

    Article 2

    (i) The European Central Bank will be headed by the President of the European Central Bank (referred to as ?the President?).

    (ii) The President will be elected to his office by members of the shareholders of the European Central Bank every 12 months.

    (iii) The President will have the authority to set monetary policy of the Eurozone.

    (iv) This includes the ability to define and implement the monetary policy for the Eurozone, to conduct foreign exchange operations, to promote smooth operation of the financial market infrastructure, authorise the issue of euro banknotes and coins by national banks, purchase national bonds.

    (v) The President also has the authority to carry out orders that pertain to the aforementioned duties, known as explicit authority.

    (vi) The actions of the President of the European Central Bank must be approved by the shareholders of the European Central Bank. The actions must be approved by a simple majority.

    I, Rushanara Ali, on behalf of the United Kingdom of Great Britain and Ireland vote FOR this bill.



  • I, Eloise Murray, on behalf of Miraco vote FOR this bill.



  • I, Acwellan Devoy, on behalf of the Duxburian Union, vote FOR the bill.



  • With utmost appreciation for the commissioner who finally decided to write this act after the discussions regarding it, I, Heather von Henderson, on behalf of Red Croatia vote FOR this act.


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