Verwendung der Rechnungseinheit in der EWG

Abstract

The Use of the Unit of Account in the EEC

In connection with the creation of an European capital market, the unit of account, which in any case is of importance as a statistical magnitude, is assuming an increasingly important role on the loan markets. In particular, the European unit of account (RE) and the European currency unit (£) have gained acceptance.

The value of the RE is tied to the gold parity of the so-called reference currencies, that is, the 17 currencies of the member countries of the former European Payments Union (EPU). A change in that value can be effected only if the following conditions are simultaneously satisfied: changes in the gold parity of all reference currencies and movement of the parities of at least two thirds of the reference currencies in the same direction. If these preconditions are fulfilled, the lowest revaluation or devaluation rate of a reference currency is taken as measure of the change in value of the RE. With regard to the currency of payment the investor has a choice, several currencies of payment being laid down as a rule in the terms of the loan. The issuer is entitled to prescribe the subscription currency.

The £ as a genuine European currency unit, must be seen against the background of the multiphase plan for the establishment of a European Economic and Currency Union, which will culminate in a uniform community currency. Its basis comprises the currencies of the EEC member countries. Relative to these currencies it has a fixed parity for the entire term of the loans. Any of the base currencies can be chosen as the currency of payment.

From the investor's viewpoint, use of the RE is advisable above all if the home currency is devalued while there are no changes in the other reference currencies. The subscriber to an % loan is fully safeguarded, especially in the event of devaluation of an EEC currency, by the parity guarantee.

In contrast to the RE, there is furthermore protection against losses due to upvaluations of the subscription currency.

In the case of both units of account, the advantages for borrowers lie particularly in the market conditions: lower costs, lack of market restrictions. On the other hand, there are disadvantages inherent in the currency option to which bond subscribers are entitled.

On the whole, these types of bonded loans can be regarded as an important stept towards integration of the European capital markets. Proof of this has already been supplied by the creation of well-functioning primary and secondary markets.