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The Introduction of the Euro Bill, scheduled for introduction into the Legislative Council on November 4, 1998, was published today (Friday) in the Gazette.

A government spokesman said that with the introduction of the Euro on January 1, 1999, the national currencies of the 11 participating countries in the European Monetary Union would be replaced.

"As an international financial centre, there is a need to introduce specific legislation in Hong Kong, as in the European Union and other financial centres such as New York, to provide certainty for the continuity of legal obligations upon the introduction of the Euro," the spokesman said.

Specifically, the new legislation aims to :

* provide a direct substitution of the European Currency Unit ("ECU") with the Euro at a rate of one Euro to one ECU as from January 1, 1999;

* provide certainty for the continuity of obligations denominated in the ECU or the participating national currencies on the introduction of the Euro; and

* provide for freedom of contract i.e. the proposed legislation should be subject to what the parties concerned may have otherwise expressly agreed by reference to the introduction of the Euro.

The local banking community, the Hong Kong Capital Markets Association and the Law Society of Hong Kong have been consulted. They all expressed support to the legislative proposal.

"The Bill will put beyond any doubt on the continuity of legal obligations arising from the introduction of Euro, and in this way enhance Hong Kong's status as an important foreign exchange centre in the world and an international financial centre," a spokesman added.

The new legislation is expected to be enacted before the introduction of the Euro on January 1, 1999.

End/Friday, October 9, 1998

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