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EU enlargement 2013: Adjustments to the ECB’s capital subscription key

The European Union has been enlarged through the accession of Croatia, taking the total number of EU Member States to 28.

As of today Hrvatska narodna banka, Croatia’s national central bank, is a member of the European System of Central Banks (ESCB) and its Governor a member of the General Council of the European Central Bank. In addition, experts from Hrvatska narodna banka have member status in ESCB Committees whenever the committees meet in ESCB composition. Since the signing of the Accession Treaty in December 2011, the Governor of and experts from Hrvatska narodna banka had been participating as observers at meetings of the General Council and the ESCB Committees respectively.

Croatia will not adopt the euro immediately but will do so once it has fulfilled the requirements laid down in the Treaty on the Functioning of the European Union. Unlike Denmark and the United Kingdom, Croatia does not have the right to opt out of adopting the single currency.

Both the ECB and the European Commission will prepare convergence reports every two years, or at the request of a Member State which has not yet adopted the euro. These reports provide the basis for the EU Council’s decision on whether the Member States concerned fulfil the necessary conditions for adopting the euro.

In line with Article 29 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank, the NCBs’ shares in the ECB’s capital key are weighted according to the respective Member States’ shares in the total population and the gross domestic product of the European Union, in equal measure, as notified to the ECB by the European Commission. The weightings are adjusted every five years or whenever a new Member State joins the European Union. Accordingly, the ECB’s capital key has been changed today on account of Croatia joining the European Union and its national central bank, Hrvatska narodna banka, becoming a member of the European System of Central Banks (ESCB).

In accordance with Article 48.3 of the Statute, the ECB’s subscribed capital is automatically increased when a country joins the European Union and its NCB becomes a member of the ESCB. The increase is determined by multiplying the prevailing amount of subscribed capital (i.e. EUR 10,760,652,402.58) by the ratio, within the extended capital key, between the weight of the NCB joining and those of the NCBs that are already members. Therefore, today the subscribed capital of the ECB has been increased to EUR 10,825,007,069.61.

Eurosystem NCBs are required to pay up their subscribed capital in full. The 11 non-euro area NCBs (now including Hrvatska narodna banka) are required to pay up a small percentage of their share in the ECB’s subscribed capital (3.75% as at 29 December 2010) as a contribution to the operational costs of the ECB. The new shares of the NCBs in the ECB’s capital key are set out below.

 ecb2013

Source: ECB (1) (2)

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