Commission notice on technical adaptations to the method for setting the reference and discount rates

(1999/C 241/09)

(Text with EEA relevance)

On 2 July 1997 the Commission decided to adopt, with effect from 1 August 1997, a new method for setting and updating the reference and discount rates. Member States were informed by letter (dated 18 August 1997) and a notice was published in the Official Journal of the European Communities (C 273 of 9 September 1997).

This method sets the reference rate for each Member State on the basis of indicative rates defined as the monthly average of the five-year interbank swap rates, plus an adjustment premium.

Following entry into the third stage of economic and monetary union on 1 January 1999 and in view of the use of the euro by the financial markets, the Commission has decided to make the following technical adaptations:

1. From 1 August 1999 the reference rate will be identical for the eleven Member States which have adopted the euro;

2. For those countries, the indicative rate will be defined as the average of the five-year interbank swap rates, plus a premium of 75 basis points.

All the other aspects of the method outlined in the Commission notice of 9 September 1997 continue to apply.

For Member States which have not adopted the euro, the method for setting the reference rates is unchanged.