III POLICIES

• PART 1 POLICIES FOR DEVELOPING THE EUROPEAN MODEL OF SOCIETY.
• PART 2 ECONOMIC AND MONETARY POLICY

Article III - 1

  1. The Union shall pursue:
        a) policies for developing the European model of society,
        b) an economic and monetary policy,
        c) a policy for reinforcing the area of freedom, security and justice,
        d) an external relations policy.

  2. In defining and implementing its policies and action, the Union shall take account of
    the objectives of economic and social cohesion and of a high level of employment; it shall
    incorporate the requirements of protecting the environment and human health; it shall take
    into consideration the requirements of consumer protection and the diversity of cultural
    aspects.
    In all its policies and actions, the Union shall aim to eliminate inequalities, and to promote equality, between men and women.

  3. All action by the Union shall be based on the provisions of this Constitution
    corresponding to the main aims and content of that action.

PART 1 POLICIES FOR DEVELOPING THE EUROPEAN MODEL OF SOCIETY

Article III - 2

The Union shall promote a model of sustainable development of economic and social activities in which the free play of competition is backed up by a set of rules enacted by the public authorities or negotiated between management and labour. Those rules shall ensure that relations between individuals, regions and States are built on mutual support and will thus contribute to the Union's identity in the world.

The European model of society rests on the creation of an internal market, supplemented by policies designed to facilitate its operation, capitalise on its benefits and ensure that it does not create disparities.

TITLE I INTERNAL MARKET

Article III - 3

The internal market shall comprise an area without internal frontiers based on a custom union and on the free movement of goods, persons, services and capital.

CHAPTER 1 CUSTOMS UNION

Article III - 4

1. No customs duties on import or export between Member States, duties of a fiscal nature or charges having equivalent effect shall be imposed on products originating in Member States or coming from third countries and in free circulation in the Member States.

2. Products coming from a third country shall be considered to be in free circulation in a Member State if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in that Member State, and if they have not benefited from a total or partial drawback of such duties or charges.

3. The provisions needed to ensure the smooth operation of the customs union shall be laid down by Law.

The Commission shall lay down Common Customs Tariff duties in accordance with the Union's international obligations.

CHAPTER 2 FREEDOM OF MOVEMENT

Article III - 5

  1. Any national of a Member State may go to and stay in another Member State in order to work there. He may remain in the territory of that State after having been employed there.

  2. Any discrimination based on nationality between nationals of the Member States as regards employment, remuneration and other conditions of work shall be prohibited.

  3. Insofar as is strictly necessary, limitations on the freedom of movement and of residence in a Member State of workers who are nationals of another Member State may be justified on grounds of public policy, public security or public health.

  4. The provisions of this Article shall not apply to employment connected with the exercise of official authority in the public service.

Article III - 6

  1. 1. Any national of a Member State and any legal person formed in accordance with the law of a Member State and having its registered office, central administration or principal place of business within the Union may establish themselves in another Member State in order to take up and pursue activities as self-employed persons and to set up and manage undertakings. This freedom shall also apply to the setting-up of agencies, branches or subsidiaries by persons remaining established in the territory of another Member State.

    Restrictions on this freedom of establishment in the territory of another Member State shall be prohibited.

  2. Member States may provide for special treatment for nationals and legal persons of other Member States on grounds of public policy, public security or public health.

  3. Freedom of establishment may not be invoked in a Member State in respect of activities which, in that State, are connected with the exercise of official authority.

  4. Some activities may be excluded from the scope of this Article by Law.

Article III - 7

  1. All goods originating in a Member State or in free circulation in a Member State may circulate freely in the other Member States.

    Quantitative restrictions on imports and exports of such goods between Member States or measures having equivalent effect shall be prohibited.

  2. The Member States may retain or introduce restrictions that are justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property.

Such restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States.

Article III - 8

  1. Any national of a Member State established in the Union may freely provide services in another Member State under conditions imposed by the Member State where the service is provided or under conditions imposed by the Member State where he is established, with due regard for any regulations of the Member State where the service is provided that are justified for compelling reasons.
    Any legal person formed in accordance with the law of a Member State and having its registered office, central administration or principal place of business within the Union shall enjoy the same freedom to provide services.

    The scope of this provision may be extended by Law to nationals of a third country who provide services and who are established within the Union.

  2. The following shall be considered as 'services': services normally provided for remuneration, insofar as they are not governed by the provisions relating to freedom of movement for persons, goods or capital.

  3. Freedom to provide services may not be invoked in a Member State in respect of activities which, in that State, are connected with the exercise of official authority.

  4. Some activities may be excluded from the scope of this Article by Law.

Article III - 9

  1. No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

    No Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.

  2. Where products are exported to the territory of any Member State, any repayment of internal taxation shall not exceed the internal taxation imposed on them whether directly or indirectly.

  3. In the case of charges other than turnover taxes, excise duties and other forms of indirect taxation, remissions and repayments in respect of exports to other Member States may not be granted and countervailing charges in respect of imports from Member States may not be imposed unless the measures contemplated have been previously approved for a limited period by the Council, on a proposal from the Commission.

  4. The provisions of this Article shall also apply to services provided in the Union.

Article III - 10

  1. Capital and means of payment may move freely within the Union.

  2. All restrictions on the movement of capital and restrictions on payments between Member States shall be prohibited.

  3. All restrictions on the movement of capital and restrictions on payments between Member States and third countries shall be prohibited, except for those authorised or laid down by Law.

  4. Paragraphs 1, 2 and 3 shall be without prejudice to the right of Member States:
        a) to apply the relevant provisions of their tax law which distinguish between taxpayers who are not in the same situation with regard to their place of residence or with regard to the place where their capital is invested;
        b) to take all requisite measures, justified on grounds of public policy or public security, to ensure the effectiveness of tax supervision and prudential supervision systems.

    Such measures and provisions shall not constitute a means of arbitrary discrimination or a disguised restriction on the free movement of capital and payments

    5.

  5. Where, in exceptional circumstances, movements of capital to or from third countries cause, or threaten to cause, serious difficulties for the operation of economic and monetary policies, the Council, acting on a proposal from the Commission and after consulting the European Central Bank, may adopt any safeguard measures that are strictly necessary with regard to third countries for a period not exceeding six months.

  6. Any discrimination based on nationality as regards financial participation by the nationals of a Member State in the capital of companies or firms established in another Member State shall be prohibited.

CHAPTER 3 LEGISLATIVE ACTION

Article III - 11

  1. Where direct application of the principles of Chapter 2 or mutual recognition prove inadequate to ensure full implementation of freedom of movement in the internal market, the Union may adopt Laws, the direct and principal purpose of which shall be to ensure the operation of the internal market.

  2. Measures shall be laid down by Law to make it easier to exercise the freedom referred to in paragraph 1.

  3. Provisions relating to legislation of the Member States concerning direct and indirect taxes may be laid down by Law, insofar as such provisions are strictly necessary to ensure the operation of the internal market.

The European Parliament shall act by a reinforced qualified majority and the Council by a reinforced qualified majority as regards the provisions concerning the rates and amounts of tax.

Article III - 12

  1. 1. The Laws provided for in this Chapter shall ensure a high level of protection for health, security, the environment and consumers, taking particular account of any new developments based on scientific fact.
    Such Laws shall take account of requirements that are necessary in order to respect public policy and public security in the Member States.

  2. Such Laws shall include a safeguard clause authorising the Member States to take, for one or more of the non-economic reasons referred to in paragraph 1, interim measures subject to a supervisory procedure at Union level.

  3. If, after the adoption of a Law provided for in this Chapter, a Member State considers it necessary to maintain national provisions justified by the vital requirements referred to in paragraph 1 or relating to the protection of the working environment, it shall notify the Commission of those provisions, stating the reasons for maintaining them.

    4.

  4. If, after the adoption of a Law provided for in this Chapter, a Member State considers it necessary to introduce national provisions based on new scientific evidence relating to the protection of the environment or the working environment because of a specific problem in that Member State which arose after adoption of the Law in question, it shall notify the Commission of the provisions proposed and the reasons for adopting them.

  5. Within six months of the notifications referred to in paragraphs 3 and 4, the Commission shall send the Member State concerned an opinion on the compatibility of the relevant national provisions with Union law.

If the Member State concerned fails to comply with that opinion, by way of derogation from the procedure laid down in Article 21(1) of Additional Act No 4, the Commission may establish by reasoned decision that the Member State has failed to comply with the requirements of Union law by abusing the powers provided for in this Article.

TITLE II COMPETITION

CHAPTER 1 RULES APPLYING TO UNDERTAKINGS

Article III - 13

  1. The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
        a) directly or indirectly fix purchase or selling prices or any other trading conditions;
        b) limit or control production, markets, technical development, or investment;
        c) share markets or sources of supply;
        d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
        e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

  2. Any agreements or decisions prohibited pursuant to this Article shall be automatically void.

  3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
           - any agreement or category of agreements between undertakings;
           - any decision or category of decisions by associations of undertakings;
           - any concerted practice or category of concerted practices, which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not:
           a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives;
        b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question.

Article III - 14

Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market insofar as it may affect trade between Member States.

Such abuse may, in particular, consist in:

a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
b) limiting production, markets or technical development to the prejudice of consumers;
c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Article III - 15

For the application of the principles set out in Articles III-13 and III-14, provisions shall be laid down by Law with the following goals:

a) to ensure compliance with the prohibitions laid down in Article III-13(1) and in Article III-14 by making provision for fines and periodic penalty payments;
b) to define, if need be, in the various branches of the economy, the scope of the provisions of Articles III-13 and III-14;
c) to define the respective functions of the Commission and of the Court of Justice in applying the provisions laid down in this Article;
d) to determine the relationship between national laws and the provisions contained in this Chapter or adopted pursuant to this Article.
e) to determine the extent to which the provisions of Articles III-13 and III-14 shall apply to the production of and trade in arms, munitions and war material.

Article III - 16

  1. The Commission shall ensure the application of the principles laid down in Articles III-13 and III-14. On application by a Member State or on its own initiative, and in cooperation with the competent authorities in the Member States, who shall give it their assistance, the Commission shall investigate cases of suspected infringement of these principles. If it finds that there has been an infringement, it shall propose appropriate measures to bring it to an end.

  2. If the infringement is not brought to an end, the Commission shall record such infringement of the principles in a reasoned decision. The Commission may publish its decision and authorise Member States to take the measures, the conditions and details of which it shall determine, needed to remedy the situation.

  3. The Commission may lay down the detailed rules for the application of Article III- 13(3) taking account of the need on the one hand to ensure effective supervision and on the other to simplify administrative controls as far as possible.

Article III - 17

  1. In the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measure contrary to the rules contained in this Constitution.

  2. Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in this Constitution, in particular to the rules on competition, insofar as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.

  3. The Commission shall ensure the application of the provisions of this Article and, where necessary, adopt appropriate regulations or decisions.

CHAPTER 2 AID GRANTED BY STATES

Article III - 18

  1. Save as otherwise provided in this Constitution, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the internal market.

  2. The following shall be compatible with the internal market:
    a) aid having a social character, granted to individual consumers, provided that such     aid is granted without discrimination related to the origin of the products concerned;
    b) aid to make good the damage caused by natural disasters or exceptional     occurrences.

  3. The following may be considered to be compatible with the internal market:
    a) aid to promote the economic development of areas where the standard of living is     abnormally low or where there is serious underemployment;
    b) aid to promote the execution of an important project of common European interest     or to remedy a serious disturbance in the economy of a Member State;
    c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest;
    d) aid to promote culture and heritage conservation where such aid does not affect trading conditions and competition in the Union to an extent that is contrary to the common interest;
    e) such other categories of aid as may be specified by Law.

Article III - 19

  1. The Commission shall, in cooperation with Member States, keep under constant review all systems of aid existing in those States. It shall propose to the latter any appropriate measures required by the functioning of the internal market.

  2. If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the internal market having regard to Article III-18, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission.

    If the State concerned does not comply with this decision within the prescribed time,
        a) the Commission may, in derogation from the provisions of Article 21(1) of Additional Act No 4, establish by reasoned decision that that State has failed to comply with the requirements of Union law;
        b) any other interested State may refer the matter to the Court of Justice direct, in derogation from the provisions of Article 21(2) of Additional Act No 4.

  3. The Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the internal market having regard to Article III-18, it shall without delay initiate the procedure provided for in paragraph 2. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.

Article III - 20

Any appropriate provisions for the application of Articles III-18 and III-19 and in particular the conditions in which Article III-19(3) shall apply and the categories of aid exempted from this procedure shall be laid down by Law.

The extent to which the provisions of Articles III-18 and III-19 shall apply to the production of and trade in arms, munitions and war material shall also be determined by Law.

TITLE III AGRICULTURE AND FISHERIES

Article III - 21

The internal market shall extend to agriculture, fisheries and trade in agricultural products.

'Agricultural products' means the products of the soil, of stockfarming and of fisheries and products of first-stage processing directly related to these products. The list of such products shall be laid down by Law.

Article III - 22

  1. In working out the common agricultural and fisheries policy, account shall be taken of:
        a) the particular nature of agricultural and fisheries activities, which results from their     social structure and from structural and natural disparities between the various regions;
        b) requirements relating to public health, environmental protection, preservation of the countryside, the quality of products and the welfare of animals;
        c) the contribution of agriculture and fisheries to the competitiveness of the European economy.

  2. The common agricultural and fisheries policy shall exclude any discrimination between producers or consumers.

Article III - 23

In order to attain the objectives set out in Article 15 of this Constitution, measures shall be laid down by Law concerning:

a) the organisation of agricultural and fisheries markets, including the measures required to stabilise the Union market and measures concerning aid for producers;
b) rural development;
c) the optimum use of resources;
d) structural fisheries policy;
e) application of the competition rules, taking into account the specific characteristics of agricultural and fisheries policy;
f) the financial mechanisms applicable to the organisation of agricultural markets, to rural development and to fisheries;
g) food safety and the quality and promotion of products;
h) the veterinary and plant health fields;
i) conditions ensuring availability of supply
j) the applicable inspection arrangements and penalties, and the combating of fraud.

Article III - 24

The Agricultural Guidance and Guarantee Fund shall contribute to the implementation of the common agricultural and fisheries policy.

The tasks and organisational principles of the Fund shall be laid down by Law. The criteria for assistance from the Fund shall be laid down by that Law.

TITLE IV TRANSPORT

Article III - 25

The common transport policy shall apply to the private and public transport of persons and goods by land, river, air and sea.

Article III - 26

In working out the common transport policy, account shall be taken of the specific needs of the peripheral and outermost regions and of islands less well served by transport.

Article III - 27

In order to attain the objectives set out in Article 16 of this Constitution, the following shall be laid down by Law:

a) the principles governing charging for the use of each transport infrastructure;
b) standards of interoperability and intermodality;
c) measures to improve the security and safety of transport, including road safety;
d) the conditions under which non-resident carriers may operate transport services within a Member State;
e) the common rules applicable to transport to or from the territory of a Member State or passing across the territory of one or more Member States;
f) the rights of passengers;
g) measures to encourage the development of navigation technologies, including those using satellites;
h) any other appropriate provisions.

Article III - 28

Aid shall be compatible with this Constitution if it meets the needs of coordination of transport or if it represents reimbursement for the discharge of certain obligations inherent in the concept of a public service.

TITLE V ECONOMIC AND SOCIAL COHESION

Article III - 29

  1. In order to attain the objectives set out in Article 18 of this Constitution, the Union shall support the strengthening of economic and social cohesion through the coordination of the economic policies of the Member States, through action by the Structural Funds and through operations by the European Investment Bank and other financial instruments.

    All Union policies shall contribute to economic and social cohesion.

    The Commission shall submit a report to the European Parliament, the Council and the Assembly of the Regions every three years on the progress made towards achieving economic and social cohesion and on the manner in which the various means provided for in this paragraph have contributed to it. This report shall, if necessary, be accompanied by appropriate proposals.

  2. Specific measures in addition to those referred to in paragraph 1 may be adopted by Law.

Article III - 30

  1. The European Regional Development Fund is intended to help redress the main regional imbalances in the Union through participation in the development and structural adjustment of regions whose development is lagging behind, in the conversion of declining industrial regions and urban areas, and in rural development.

  2. The Cohesion Fund shall provide a financial contribution to projects in the environmental field and in trans-European networks in the area of transport infrastructure.

Article III - 31

The tasks, priority objectives and organisational principles of the European Regional Development Fund and the Cohesion Fund shall be laid down by Law. The criteria for assistance from the Funds shall also be laid down by Law.

The conditions in which the various Structural Funds (European Regional Development Fund, Cohesion Fund, Agricultural Guidance and Guarantee Fund, European Social Fund) shall coordinate their operations with one another and with the other existing financial instruments shall be laid down by Law. To this end, measures may be taken to group the Funds.

TITLE VI SOCIAL POLICY AND EMPLOYMENT

Article III - 32

In order to attain the objectives set out in Article 19 of this Constitution, the Union and the Member States shall implement measures to promote a high level of social protection and of employment which take account of national practices related to the responsibilities of management and labour and the need to boost the competitiveness of the Union economy. They shall also implement measures to guarantee equal treatment between men and women.

CHAPTER 1 SOCIAL POLICY

Article III - 33

  1. The Union shall support and supplement the activities of the Member States in the following fields:
    a) improvement of the working environment to protect workers' health and safety;
    b) working conditions;
    c) social security and social protection of workers;
    d) protection of workers where their employment contract is terminated;
    e) the information and consultation of workers;
    f) representation and collective defence of the interests of workers and employers;
    g) the integration of persons excluded from the labour market;
    h) equality between men and women with regard to labour market opportunities and     treatment at work;
    i) the combating of social exclusion.

  2. To this end, the following shall be laid down by Law:
    a) measures designed to organise cooperation between Member States through initiatives aimed at improving knowledge, developing exchanges of information and best practices, promoting innovative approaches and evaluating experiences;
    b) minimum requirements for gradual implementation, having regard to the conditions and technical rules obtaining in each of the Member States; such directives shall avoid imposing administrative, financial and legal constraints in a way which would hold back the creation and development of small and mediumsized undertakings.

  3. A Member State may entrust management and labour, at their joint request, with the implementation of Laws adopted pursuant to paragraph 2.
    In this case, it shall ensure that, no later than the date on which a Law becomes applicable, management and labour have introduced the necessary measures by agreement.

    The Member State concerned shall take any necessary measure enabling it at any time to be     in a position to guarantee the results imposed by that Law.

  4. The provisions adopted pursuant to this Article:
    a) shall not affect the right of Member States to define the fundamental principles of their social security system and must not significantly affect the financial equilibrium thereof;
    b) shall not prevent any Member State from maintaining or introducing more stringent protective measures compatible with this Constitution.

  5. The provisions of this Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs.

Article III - 34

  1. The Commission shall have the task of promoting the consultation of management and labour at Union level and shall take any relevant measure to facilitate their dialogue by ensuring balanced support for the parties. To this end, before submitting proposals in the social policy field, the Commission shall consult management and labour on the possible direction of Union action.

  2. If, after such consultation, the Commission considers Union action advisable, it shall consult management and labour on the content of the envisaged proposal. Management and labour shall forward to the Commission an opinion or, where appropriate, a recommendation.

  3. On the occasion of such consultation, management and labour may inform the Commission of their wish to initiate the process provided for in Article III-35; the duration of the procedure shall not exceed nine months, unless the management and labour concerned and the Commission decide jointly to extend it.

Article III - 35

  1. Should management and labour so desire, the dialogue between them at Union level may lead to contractual relations, including agreements.

  2. Agreements concluded at Union level shall be implemented either in accordance with the procedures and practices specific to management and labour and the Member States or, in matters covered by Article III-33 and matters relating to pay, at the joint request of the signatory parties, by a Law.

Article III - 36

The Commission shall encourage cooperation between the Member States and facilitate the coordination of their action in all social policy fields under this Title, particularly in matters relating to:
a) employment;
b) labour law and working conditions;
c) basic and advanced vocational training;
d) social security;
e) prevention of occupational accidents and diseases;
f) occupational hygiene;
g) the right of association and collective bargaining between employers and workers.

Article III - 37

  1. Each Member State shall ensure that the principle of equal pay for men and women for equal work or work of equal value is applied.

  2. 'Pay' means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer.

    Equal pay without discrimination based on sex means:
    a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement;
    b) that pay for work at time rates shall be the same for the same job.

  3. Measures shall be adopted by Law to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation.

  4. With a view to ensuring full equality in practice between men and women in working life, the principle of equal treatment shall not prevent any Member State from maintaining or adopting measures providing for specific advantages in order to make it easier for the under-represented sex to pursue a vocational activity or to prevent or compensate for disadvantages in professional careers.

CHAPTER 2 COORDINATED STRATEGY FOR EMPLOYMENT

Article III - 38

The Union and the Member States shall work towards developing a coordinated strategy for employment in order to attain the objectives set out in Article 19 of this Constitution. This strategy shall be consistent with the broad multiannual guidelines for economic policies provided for in Article III-66.

Taking account of national practices related to the responsibilities of management and labour, Member States shall regard promoting employment and coordinating social and employment policies as a matter of common concern and shall coordinate their action in this respect within the Council.

Article III - 39

1. The European Council shall each year consider the employment situation in the Union and adopt conclusions, on the basis of a joint report by the Council and the Commission.

2. On the basis of the conclusions of the European Council, the Council, on a proposal from the Commission and after consulting the European Parliament, shall each year draw up guidelines, in the form of recommendations, which the Member States shall take into account in their employment policies.

3. Each Member State shall provide the Commission with an annual report on the principal measures taken to implement its employment policy in the light of the guidelines for employment.

On the basis of these reports, the European Parliament and the Council shall each year carry out an examination of the implementation of the employment policies of the Member States. The Council, on a proposal from the Commission and after consulting the European Parliament, may make recommendations to Member States.

Article III - 40

The Commission may adopt incentive measures designed to encourage cooperation between Member States and to support their action in the field of employment:

a) through initiatives aimed at developing exchanges of information and best practices;
b) by providing comparative analysis and advice;
c) by promoting innovative approaches;
d) by evaluating experiences, in particular by recourse to pilot projects.

Article III - 41

An Employment Committee with advisory status shall be established to promote coordination between Member States on employment and labour market policies. The composition and tasks of the Committee are set out in Additional Act No 4.

CHAPTER 3 SOCIAL PROTECTION

Article III - 42

The Union and the Member States shall work towards developing a coordinated strategy for social protection with a view to achieving the objectives set out in Article 19 of the Constitution.

Member States, having regard to national practices related to the responsibilities of management and labour, shall regard the modernisation of systems of social protection as a matter of common concern and shall coordinate their action in this respect within the Council. That coordination shall not affect the prerogative of the Member States to define the fundamental principles of their system of social protection.

Article III - 43

  1. The European Council shall each year consider the social protection situation and adopt conclusions on the basis of a joint report by the Council and the Commission.

  2. On the basis of the conclusions of the European Council, the Council, acting on a proposal from the Commission and after consulting the European Parliament, shall adopt common objectives and, where appropriate, draw up in the form of recommendations, guidelines on the modernisation of systems of social protection which the Member States shall take into account in their policies.

  3. Each Member State shall provide the Commission with a periodic report on the principal measures it has taken to implement the modernisation of its system of social protection in the light of the objectives and, where appropriate, guidelines for the modernisation of systems of social protection.

On the basis of those reports, European Parliament and the Council shall periodically carry out an examination of the implementation of the modernisation of systems of social protection of the Member States.

Article III - 44

A Social Protection Committee with advisory status shall be established to promote cooperation on social protection policies between Member States and with the Commission.

The composition and tasks of the committee are set out in Additional Act No 4.

CHAPTER 4 THE EUROPEAN SOCIAL FUND

Article III - 45

  1. The aim of the European Social Fund shall be to render the employment of workers easier and to increase their geographical and occupational mobility and to facilitate their adaptation to industrial changes and to changes in production systems, in particular through vocational training and retraining.

  2. The tasks and organisational principles of the European Social Fund shall be laid down by Law. The criteria for assistance from the Fund shall be laid down by that Law.

TITLE VII ENVIRONMENT

Article III - 46

  1. In order to attain the objectives set out in Article 20 of this Constitution, action by the Union on the environment shall aim at a high level of protection, taking into account the diversity of situations in the various regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.

  2. In preparing its policy on the environment, the Union shall take account of:
    a) available scientific and technical data;
    b) environmental conditions in the various regions of the Union;
    c) the potential benefits and costs of action or lack of action;
    d) the economic and social development of the Union as a whole and the balanced     development of its regions.

Article III - 47
  1. General action programmes setting out priority objectives to be attained shall be laid down by Law. Any appropriate measures for achieving the objectives of environment policy shall be adopted by Law.
  2. The Member States shall finance and implement environment policy, save where otherwise provided by Law.
  3. Where the implementation of a Law based on the provisions of paragraph 1 involves costs deemed disproportionate for the public authorities of a Member State, that Law shall lay down appropriate provisions in the form of derogations and/or financial support from the Cohesion Fund.

Neither national nor Union financing shall call into question the principle that the polluter should pay.

Article III - 48

The protective measures adopted pursuant to Article III-46 shall not prevent any Member State from maintaining or introducing more stringent protective measures. Such measures must be compatible with this Constitution. They shall be notified to the Commission.

TITLE VIII RESEARCH AND TECHNOLOGICAL DEVELOPMENT

Article III - 49 (Items 1&2 missing from document)

  1. In order to attain the objectives set out in Article 21 of this Constitution, the Union shall carry out the following activities, complementing the activities carried out in the Member States and designed to establish a European research area in which researchers, scientific knowledge and technologies can move and circulate freely:
        a) implementation of research, technological development and demonstration programmes, by promoting cooperation with and between undertakings, research centres and universities;
        b) promotion of cooperation in the field of research, technological development and     demonstration with third countries and international organisations;
        c) dissemination and optimisation of the results of activities in research, technological     development and demonstration;
        d) stimulation of training, the transfer of knowledge and the promotion of European careers by encouraging the mobility of researchers within the Union.

  2. Throughout its territory, the Union shall encourage undertakings including small and medium-sized undertakings, research centres and universities in their efforts to engage in top quality research and technological development.

Article III - 50

  1. A multiannual framework programme, setting out all the research activities financed by the Union, shall:
        a) establish the scientific and technological objectives to be achieved and fix the relevant priorities;
        b) specify the content of such activities and define the detailed arrangements for implementing them;
        c) fix the maximum overall amount and the detailed rules for financial participation     by the Union in the framework programme and the respective shares in each of the activities provided for.

  2. The multiannual framework programme may make provision for supplementary programmes involving the participation of certain Member States only, which shall finance them subject to possible participation by the Union.

  3. The multiannual framework programme may also make provision, in agreement with the Member States concerned, for participation in research and development programmes undertaken by several Member States, including participation in the structures created for the execution of those programmes.

  4. The multiannual framework programme shall be adopted by Law.

    The Commission shall lay down rules on the participation of undertakings, research centres and universities, and rules applicable to the dissemination of research findings

  5. Joint undertakings or any other structure necessary for the efficient execution of Union research, technological development and demonstration programmes may be set up by Law.

Article III - 51

In addition to the activities provided for in the multiannual framework programme, the measures required to establish the European research area shall be adopted by Law.

Article III - 52

  1. The Union and the Member States shall coordinate their research and technological development activities so as to ensure that national policies and Union policy are mutually consistent.

  2. To this end, the Commission shall draw up an annual report. On the basis of this report, the European Parliament and the Council shall carry out an examination of the implementation of the national policies and Union policy. The Council, on a proposal from the Commission and after consulting the European Parliament, may make recommendations to Member States.

TITLE IX CONSUMER PROTECTION

Article III - 53

1. In order to attain the objectives set out in Article 22 of this Constitution, and to complement the provisions adopted pursuant to Article III-11, consumer protection measures shall be adopted by Law which supplement and monitor the policy pursued by the Member States.

2. Measures adopted pursuant to paragraph 1 shall not prevent any Member State from maintaining or introducing more stringent protective measures. Such measures must be compatible with this Constitution. The Commission shall be notified of them.

TITLE X TRANS-EUROPEAN NETWORKS

Article III - 54

  1. In order to attain the objectives set out in Article 23 of this Constitution, a series of guidelines shall be established by Law, covering the objectives, priorities and broad lines of measures envisaged in the sphere of trans-European transport, energy and telecommunications networks; these guidelines shall identify projects of common interest.

    Guidelines and projects of common interest which relate to the territory of a Member State shall require the approval of the Member State concerned.

  2. The budget of the European Union shall contribute to the financing of projects identified as being of common interest.

  3. The Commission shall implement any measures that may prove necessary to ensure the integration and interoperability of the networks.

  4. Action by the Union shall take into account the potential economic viability of projects and the need to link island, landlocked and peripheral regions with the central regions of the Union.

Article III - 55

The Member States shall, in liaison with the Commission, coordinate among themselves the policies pursued at national level which may have a significant impact on the development of trans-European networks. The Commission may, in close cooperation with the Member States, take any useful initiative to promote such coordination.

TITLE XI HEALTH

Article III - 56

  1. In order to attain the objectives referred to in Article 24 of this Constitution, the Union shall take action to complement and co-ordinate national policies on health.

  2. Action by the Union shall be directed towards improving public health, preventing human illness and diseases, and obviating sources of danger to human health.

    Such action shall also cover:
        a) the fight against the major health scourges, by promoting research into their causes, their transmission and their prevention, as well as health information and education;
        b) the fight against serious health threats and risks, whether accidental or intentional, with a European dimension.

    The Union shall complement the Member States' action in reducing drugs-related health damage, including information and prevention.

Article III - 57

Action by the Union in the field of public health shall fully respect the responsibilities of the Member States for the organisation and delivery of health services and medical care.

The Union may not adopt measures intended to harmonise national rules in the area referred to in the first sub-paragraph. Measures taken in accordance with Article III-56 shall not affect the relevant national responsibilities.

Article III - 58

The following shall be laid down by Law:

a) incentive measures designed to protect and improve human health;
b) cooperation and support measures for national policies and programmes;
c) any other strictly necessary measures to ensure harmonised safety and health protection at European level.

TITLE XII COMPLEMENTARY ACTION

CHAPTER 1 EDUCATION AND YOUTH

Article III - 59

  1. The Union shall contribute to the development of quality education by encouraging cooperation between Member States and by supporting and supplementing their action. It shall fully respect the responsibility of the Member States for the content of teaching and the organisation of education systems and their cultural and linguistic diversity.

  2. Action by the Union shall be aimed at:
           a) developing the European dimension in education, particularly through the teaching and dissemination of the languages of the Member States;
           b) encouraging mobility of students and teachers, inter alia by encouraging the academic recognition of diplomas and periods of study;
        c) promoting cooperation between educational establishments;
        d) developing exchanges of information and experience on issues common to the     education systems of the Member States;
        e) encouraging the development of youth exchanges and of exchanges of socioeducational instructors;
        f) encouraging the development of distance education.

  3. To this end, incentive measures shall be adopted by Law.

CHAPTER 2 VOCATIONAL TRAINING

Article III - 60

  1. The Union shall implement a vocational training policy which shall support and supplement the action of the Member States. It shall fully respect the responsibility of the Member States for the content and organisation of vocational training.

  2. Action by the Union shall aim to:
        a) facilitate adaptation to industrial changes, in particular through vocational training and retraining;
        b) improve initial and continuing vocational training in order to facilitate vocational integration and reintegration into the labour market;
        c) facilitate access to vocational training and encourage mobility of instructors and trainees and particularly young people;
        d) stimulate cooperation on training between educational or training establishments and firms;
        e) develop exchanges of information and experience on issues common to the training systems of the Member States.

  3. To this end, incentive measures shall be adopted by Law.

CHAPTER 3 CULTURE AND AUDIOVISUAL MEDIA

Article III - 61

  1. The Union shall contribute to the flowering of the cultures of the Member States, while respecting their national and regional diversity and at the same time bringing the common cultural heritage to the fore. The Union attaches particular importance to cultural diversification and pluralism in the media.

  2. Action by the Union shall be aimed at encouraging cooperation between Member States and, if necessary, supporting and supplementing their action in the following areas:
        a) improvement of the knowledge and dissemination of the culture and history of the European peoples;
        b) conservation and safeguarding of cultural heritage of European significance;
        c) non-commercial cultural exchanges;
        d) artistic and literary creation, including in the audiovisual sector.

  3. The measures required for this purpose shall be laid down by Law.

CHAPTER 4 INDUSTRIAL COMPETITIVENESS, CIVIL PROTECTION, SPACE

Article III - 62

  1. The Union shall take action complementing the efforts of the Member States to ensure that the conditions required to improve the competitiveness of European industry are strengthened. It shall encourage an environment favourable to cooperation between undertakings, exploitation of potential for innovation, universal access to the information society, and conversion of industries in decline.

  2. The Union shall contribute to the achievement of this objective through policies and activities that it carries out under other provisions of the Constitution, while respecting the principles and rules laid down in the field of competition.

  3. The Commission may take any appropriate initiative to promote the coordination of actions undertaken by the Member States.

  4. Specific measures, which may take the form of support or conversion programmes, may be adopted by Law.

Article III - 63

The Union shall encourage cooperation between the Member States in order to strengthen the effectiveness of civil protection systems in the event of exceptional events or natural disasters, both within and outside the Union.

The Union shall take the necessary initiatives for this purpose. Measures for the purpose of better coordination shall be laid down by Law.

Article III - 64

The Union shall coordinate efforts for the purpose of space exploration and utilisation and shall promote objectives and orientations as regards space.

The measures required for this purpose, which may take the form of a European space programme, shall be laid down by Law.

PART 2 ECONOMIC AND MONETARY POLICY

TITLE I COORDINATION OF ECONOMIC POLICIES

Article III - 65

Member States shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Union, as defined in Article 14 of this Constitution and in particular the broad multiannual economic policy guidelines.

They shall regard their economic policies as a matter of common concern and shall coordinate them within the Council, which shall be assisted by an Economic and Financial Committee, the composition and functions of which are laid down in Additional Act No 4.

Article III - 66

  1. 1. The Council, on a proposal from the Commission and after obtaining the opinion of the European Parliament, shall formulate a draft for the broad multiannual guidelines for the economic policies of the Member States, the euro area and the Union.1
    The broad guidelines shall take account of the guidelines for employment adopted in accordance with Article III-39.

    1 [These broad guidelines shall include action at Union and national level which the Member States shall undertake to implement in order to achieve objectives linked to growth, competitiveness, employment, savings and investment, and the development of public expenditure.]

  2. The European Council, acting on the basis of the draft from the Council, shall discuss a conclusion on the broad guidelines.
    Taking into account the conclusion of the European Council, the Council shall adopt the broad guidelines in the form of a recommendation.

    On the basis of an annual report from the Commission on the application of the broad guidelines, the Council shall decide, on a proposal from the Commission, on any adjustments that are necessary to the broad guidelines.

  3. In order to ensure closer coordination of economic policies and sustained convergence of the economic performances of the Member States, the Commission and Council shall, on the basis of reports submitted by the Commission, monitor economic developments in each of the Member States, in the euro area and in the Union as well as the consistency of economic policies with the broad guidelines, and regularly carry out an overall assessment .

    For the purpose of this multilateral surveillance, Member States shall inform the Commission of the measures envisaged to give effect to the recommendations adopted by the Council and actions decided on to this end.

  4. Where it is established that the economic policies of a Member State are not consistent with the broad guidelines or that they risk jeopardising the proper functioning of the Union, the Commission may address a warning to the Member State concerned.
    The Council may also, on a proposal from the Commission, make the necessary recommendations to the Member State concerned.
    The Commission shall report to the European Parliament and the Council on the results of multilateral surveillance.

  5. If a Member State persists in failing to put into practice the Council's recommendations, the Council may, acting by a reinforced qualified majority on a proposal from the Commission, decide upon measures appropriate to the situation.

  6. The Council may, on a proposal from the Commission and after obtaining the opinion of the European Parliament, adopt detailed rules for the multilateral surveillance procedure referred to in paragraphs 3, 4 and 5.

  7. Any Member State concerned by the deliberations provided for in paragraphs 4 and 5 shall not participate in the vote.

Article III - 67

  1. The Council may, on a proposal from the Commission and after obtaining the opinion of the European Parliament, decide upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products.

  2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by exceptional occurrences beyond its control or natural disasters, the Council may, on a proposal from the Commission and after obtaining the opinion of the European Parliament, grant financial assistance from the Union to the Member State concerned, under certain conditions.

Article III - 68

  1. Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as 'national central banks') in favour of Union institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.

  2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.

Article III - 69

  1. Any measure, not based on prudential considerations, establishing privileged access to financial institutions for Union institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited.

  2. Definitions for the application of the prohibition referred to in paragraph 1 shall be specified by Law.

Article III - 70

  1. The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.

  2. The Council, on a proposal from the Commission, and after obtaining the opinion of the European Parliament, may specify definitions for the application of the prohibition referred to in Article III-68 and in this Article.

Article III - 71

1. Member States shall avoid excessive government deficits.

2. The Commission shall monitor the development of the budgetary situation and of the stock of government debt in the Member States with a view to identifying gross errors. In particular it shall examine compliance with budgetary discipline on the basis of the following two criteria:
a) whether the ratio of the planned or actual government deficit to gross domestic product exceeds a reference value, unless:
- either the ratio has declined substantially and continuously and reached a level that comes close to the reference value;
- or, alternatively, the excess over the reference value is only exceptional and temporary and the ratio remains close to the reference value;
b) whether the ratio of government debt to gross domestic product exceeds a reference value, unless the ratio is sufficiently diminishing and approaching the reference value at a satisfactory pace.

The reference values are specified in the Protocol on the excessive deficit procedure annexed to Additional Act No 5.

3. If a Member State does not fulfil the requirements under one or both of these criteria, the Commission shall prepare a report. The report of the Commission shall also take into account whether the government deficit exceeds government investment expenditure and take into account all other relevant factors, including the medium-term economic and budgetary position of the Member State.

The Commission may also prepare a report if, notwithstanding the fulfilment of the requirements under the criteria, it is of the opinion that there is a risk of an excessive deficit in a Member State.

4. If the Commission considers that an excessive deficit in a Member State exists or may occur, it shall submit an opinion to the Council.

5. On a proposal from the Commission and having considered any observations which the Member State concerned may wish to make, the Council shall decide, after an overall assessment, whether an excessive deficit exists.

6. Where the existence of an excessive deficit is decided in accordance with paragraph 5, the Council shall make recommendations to the Member State concerned with a view to bringing that situation to an end within a given period.

7. If a Member State persists in failing to put into practice the Council's recommendations, the Council may, on a proposal from the Commission, decide to give notice to the Member State to take, within a specified time-limit, measures for the deficit reduction which is deemed necessary by the Council in order to remedy the situation.

In such a case, the Council may request the Member State concerned to submit reports in accordance with a specific timetable in order to examine the adjustment efforts of that Member State.

8. The rights to bring actions provided for in Article 21 of Additional Act No 4 may not be exercised within the framework of paragraphs 1 to 7 of this Article.

9. As long as a Member State fails to comply with a decision taken in accordance with paragraph 7, the Council may decide to apply or, as the case may be, intensify one or more of the following measures:
a) to require the Member State concerned to publish additional information, to be specified by the Council, before issuing bonds and securities;
b) to invite the European Investment Bank to reconsider its lending policy towards the Member State concerned;
c) to require the Member State concerned to make a non-interest-bearing deposit of an appropriate size with the Union until the excessive deficit has, in the view of the Council, been corrected;
d) to impose fines of an appropriate size.

The Council shall inform the European Parliament of the decisions taken.

10. The Council shall repeal some or all of its decisions referred to in paragraphs 5, 6, 7 and 9 to the extent that the excessive deficit in the Member State concerned has been corrected.

11. When taking the decisions referred to in paragraphs 5, 6, 7, 9 and 10, the Council shall act on a proposal from the Commission by a reinforced qualified majority, without any participation in the deliberations by the Member State concerned.

12. Further provisions relating to the implementation of the procedure described in this Article are set out in the Protocol on the excessive deficit procedure annexed to Additional Act No 5.

Any appropriate provisions supplementing or replacing the said Protocol shall be laid down by Institutional Law. The European Central Bank shall be consulted.

Article III - 72

If the Commission considers that there is a risk of a failure to comply with the reference values set out in the Protocol on the excessive deficit procedure annexed to Additional Act No 5, it shall address a warning to the Member State concerned. The Council, on a proposal from the Commission, may make the necessary recommendations to the Member State concerned.

TITLE II MONETARY POLICY

Article III - 73

1. The primary objective of the European System of Central Banks shall be to maintain price stability. Without prejudice to the objective of price stability, the European System of Central Banks shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives laid down in Article 9 of this Constitution.

The European System of Central Banks shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article 14 of this Constitution.

2. The basic tasks to be carried out through the European System of Central Banks are determined in Article 61 of this Constitution.

3. The holding and management of Member States' foreign official reserves by the European System of Central Banks shall be without prejudice to the holding and management by the governments of Member States of foreign-exchange working balances.

4. The European Central Bank shall be consulted:
a) on any proposed Union act in its fields of competence;
b) by national authorities regarding any draft legislative provision in its fields of competence, but within the limits and under the conditions set out by the Law.

The European Central Bank may submit opinions to the appropriate Union institutions or bodies or to national authorities on matters in its fields of competence.

5. The European System of Central Banks shall contribute to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system.

6. Specific tasks may be conferred upon the European Central Bank by Institutional Law concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings. The European Central Bank shall be consulted.

Article III - 74

1. The European Central Bank shall have the exclusive right to authorise the issue of banknotes within the Union. The European Central Bank and the national central banks may issue such notes. The banknotes issued by the European Central Bank and the national central banks shall be the only such notes to have the status of legal tender within the Union.

2. Member States may issue coins subject to approval by the European Central Bank of the volume of the issue. Measures shall be laid down by Law to harmonise the denominations and technical specifications of all coins intended for circulation to the extent necessary to permit their smooth circulation within the Union. The European Central Bank shall be consulted. Questions relating to the issue of euro coins shall be coordinated by the Commission.

3. Measures to facilitate the use and circulation of the euro shall be adopted by Law.

The European Central Bank shall be consulted.

Article III - 75

1. The Statute of the European System of Central Banks is laid down in a Protocol annexed to Additional Act No 5.

2. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1 a) and 36 of the Statute of the European System of Central Banks may be amended by Law, at the request of, or after consultation of the European Central Bank.

3. The provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of the Statute of the European System of Central Banks shall be adopted by Law. The European Central Bank shall be consulted.

Article III - 76

When exercising the powers and carrying out the tasks and duties conferred upon them by this Constitution and the Statute of the European System of Central Banks, neither the European Central Bank, nor a national central bank, nor any member of their decisionmaking bodies shall seek or take instructions from Union institutions or bodies, from any government of a Member State or from any other body. The Union institutions and bodies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the European Central Bank or of the national central banks in the performance of their tasks.

Article III - 77

Each Member State shall ensure that its national legislation including the statutes of its national central bank is compatible with this Constitution and the Statute of the European System of Central Banks.

Article III - 78

1. In order to carry out the tasks entrusted to the European System of Central Banks, the European Central Bank shall, in accordance with the provisions of this Constitution and under the conditions laid down in the Statute of the European System of Central Banks:
a) make regulations to the extent necessary to implement the tasks defined in Article 3.1, first indent, Articles 19.1, 22 and 25.2 of the Statute of the European System of Central Banks and in cases which shall be laid down by Law;
b) take decisions necessary for carrying out the tasks entrusted to the European System of Central Banks under this Constitution and the Statute of the European  System of Central Banks;
c) make recommendations and deliver opinions.

The European Central Bank may decide to publish its decisions, recommendations and opinions.

2. Within the limits and under the conditions adopted by Law, the European Central Bank shall be entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.

TITLE III TRANSITIONAL PROVISIONS

Article III - 79

1. The provisions of this Title shall apply for as long as a State has not adopted the euro as a currency in accordance with the procedure provided for in Article III-82. Member States which have not yet adopted the euro shall be referred to as 'Member States with a derogation'.

2. A derogation referred to in paragraph 1 shall entail that the following Articles do not apply to the Member State concerned: Article 63(4) of this Constitution, Article III-71(7) and (9), Article III-73(1), (2), (3) and (5), and Articles III-75 and III-104. The exclusion of such a Member State and its national central bank from rights and obligations within the European System of Central Banks is laid down in Chapter IX of the Statute of the European System of Central Banks.

Article III - 80

1. Where a Member State with a derogation is in difficulties or is seriously threatened with difficulties as regards its balance of payments either as a result of an overall disequilibrium in its balance of payments, or as a result of the type of currency at its disposal, and where such difficulties are liable in particular to jeopardise the functioning of the internal market or the progressive implementation of the common commercial policy, the Commission shall immediately investigate the position of the State in question and the action which, making use of all the means at its disposal, that State has taken or may take in accordance with the provisions of this Constitution. The Commission shall state what measures it recommends the State concerned to take.

If the action taken by the Member State concerned and the measures suggested by the Commission do not prove sufficient to overcome the difficulties which have arisen or which threaten, the Commission shall propose to the Council the granting of mutual assistance and appropriate methods therefor.
The Commission shall keep the Council regularly informed of the situation and of how it is developing.

2. The Council shall grant mutual assistance; it shall adopt decisions laying down the conditions and details of such assistance. Mutual assistance may take such forms as:
a) a concerted approach to or within any other international organisations to which Member States may have recourse;
b) measures needed to avoid deflection of trade where the State which is in difficulties maintains or reintroduces quantitative restrictions against third countries;
c) the granting of limited credits by other Member States, subject to their agreement.

3. If the mutual assistance proposed by the Commission is not granted by the Council or if the mutual assistance granted and the measures taken are insufficient, the Commission shall authorise the State which is in difficulties to take protective measures, the conditions and details of which the Commission shall determine.

Such authorisation may be revoked and such conditions and details may be changed by the Council.

Article III - 81

1. Where a sudden crisis in the balance of payments occurs and a decision within the meaning of Article III-80(2) is not immediately taken, the Member State concerned with a derogation may, as a precaution, take the necessary protective measures. Such measures must cause the least possible disturbance in the functioning of the internal market and must not be wider in scope than is strictly necessary to remedy the sudden difficulties which have arisen.

2. The Commission and the other Member States shall be informed of such protective measures not later than when they enter into force. The Commission may propose to the Council the granting of mutual assistance under Article III-80. The Council may decide that the State concerned shall amend, suspend or abolish those protective measures.

Article III - 82

1. At least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council on the progress made in the fulfilment by the Member States of their obligations regarding the adoption of the euro. These reports shall include an examination of the compatibility between each Member State’s national legislation, including the statutes of its national central bank, and Articles III-76 and III-77 and the Statute of the European System of Central Banks. The reports shall also examine the achievement of a high degree of sustainable convergence by reference to the fulfilment by each Member State of the following criteria:
a) the achievement of a high degree of price stability; this will be apparent from a rate of inflation which is close to that of the euro area taken as a whole;
b) the sustainability of the government financial position; this will be apparent from having achieved a government budgetary position which complies with the principles laid down by Article III-71 as regards deficits and debts;
c) the observance of the normal fluctuation margins provided for by the exchangerate mechanism of the European Monetary System (EMS), for at least two years, without devaluing against the euro;
d) the durability of convergence achieved by the Member State and of its participation in the exchange-rate mechanism of the European Monetary System being reflected in the long-term interest-rate levels.

The four criteria mentioned in this paragraph and the relevant periods over which they are to be respected are developed further in a Protocol annexed to Additional Act No 5. The reports of the Commission and the European Central Bank shall also take account of the results of the integration of markets, the situation and development of the balances of payments on current account and an examination of the development of unit labour costs and other price indices.

2. After consulting the European Parliament and after discussion within the European Council, the Council shall, on a proposal from the Commission, decide which Member States with a derogation fulfil the necessary conditions on the basis of the criteria set out in paragraph 1, and abrogate the derogations of the Member States concerned.

Article III - 83

1. If and as long as there are Member States which have a derogation, the Council shall, in adopting the broad guidelines for economic policies for the euro area or in taking decisions relating to multilateral surveillance for States having adopted the euro, in the context of Article III-66, act without the participation of States with a derogation.

2. The same procedure shall apply to the surveillance and decisions under Article III-71 in the event of excessive government deficits of Member States having adopted the euro, measures relating to euro currency referred to in Article III-74, amendments to the Statute of the European System of Central Banks under Article III-75, the conclusion of agreements or formulation of guidelines on monetary or foreign exchange regime matters under Article III-104 and the decision under Article III-82 establishing that a Member State with a derogation fulfils the conditions to adopt the euro.

This procedure shall also apply to the deliberations of the European Council and of the Council pursuant to Article 63 of this Constitution for the appointment of the President, the Vice-President and the other members of the Executive Board of the European Central Bank.

Article III - 84

1. If and as long as there are Member States with a derogation, and without prejudice to Article 62(2) of this Constitution, the General Council of the European Central Bank referred to in Article 45 of the Statute of the European System of Central Banks shall be constituted as a third decision-making body of the European Central Bank.

2. If a decision is taken to abrogate a derogation, in accordance with the procedure set out in Article III-82(2), the Council shall, acting with the unanimity of the Member States without a derogation and the Member State concerned, on a proposal from the Commission and after consulting the European Central Bank, adopt the rate at which the euro shall be substituted for the currency of the Member State concerned.

Article III - 85

Each Member State with a derogation shall treat its exchange-rate policy as a matter of common interest. In so doing, Member States shall take account of the experience acquired in cooperation within the framework of the European Monetary System (EMS II) and shall respect existing powers in this field.