MAASTRICHT (Netherlands). Dec II; Here are extracts from Wednesday's European Community agreement on monetary union. The agreements on political union will be Incorporated into a separate document, reports AP.

' The activities of the Member States and the Community shall Include the adoption of an economic policy based on the close co-ordlnatton of Member States' economic policies, on the Internal market and on the definition on common objectives, and which is concluded in accordance with the principle of an open market economy with free competition

These . activities shall include their Irrevocable fixing of exchange rates leading to

the introduction of a single currency, the ECU, the definition and conduct of a single monetary policy and exchange rate policy the primary objec tive of both of which shall be to maintain prices stability and and to support the general economic policies in the Community

"A European System of Central Banks and the European Central Bank.... shall be established in accordance with the procedures laid down In this Treaty

The primary objectives of the European System of Central Banks shall be to maintain price stability

"The basic task to be carries out through the ESCB shall be;

•To define and implement the monetary policy of the Community,

•To conduct foreign exchange cooperations

•To hold and manage the official foreign reserves of the Member States;

To promote the smooth operation of payment systems.

The ECB shall have the exclusive right to authorize the Issue of bank notes within the Community. The ECB and the national central banks may ls; sue such notes. The bank notes Issued by the ECB and the national central banks shall be the only such notes to have legal tender status within the Community.

The ESCB 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.

The ESCB shall be composed of the European Central Bank and of the central banks of the Member States "

"When exercising the powers and carrying out the tasks and duties conferred upon them by this Treaty and the Statute of the ESCB, neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions / or bodies, from any Government of a Member State or from any other body."

"Recognizing that the United Kingdom shall not b obliged or committed to move to the third stage of economic and monetary union without a separate decision to do so by Its government and Parliament."

Key decision on future union

Here are the key decisions regarding future European unification that were announced Wednesday by the 12 European Community leaders. They are to take effect on Jan 1. 1993 after ratification by the national legislatures In all 12 EC states:

Monetary Union

The EC nations will create a European Monetary Institute on Jan 1. 1994. The precursor of European Central Bank that will start operating on Jan 1. 1997 at the earliest:

The bank will issue a single European currency any day after Jan 1, 1999. It is hoped at least seven EC nations — all with low inflation and modest budget deficits — will abandon their national monies and

adopt the EC currency in 1997:

Britain was allowed to stay out of the EC currency until an unspecified date. 1 opposes monetary union for ideological

Denmark was also allowed to opt out of the currency pending a referendum on the Issue, a constitutional requirement. The Danish government backs monetary union.

Political Union

EC states move toward a Joint foreign and security policy with most decisions requiring unanimity;

The Western European Union, a long-dormant group of nine EC states, will be revived to act as the EC's defense body, but finked to the NATO

Gives EC Jurisdiction tn specific areas with the member states voting to implement decisions. These areas Include industrial affairs, health, education. trade, environment, energy, culture, tourism, consumer and civil protection;

Social affairs becomes an EC Jurisdiction in all EC states, except Britain which rejected EC-imposed labour legislation on workers' rights:

Increased political cooperation will be carried out under a new name — European Union. It will also create a permanent diplomatic network of senior political officials in the EC capitals.

Federalism

EC leaders dropped reference to an EC "with a federal goal." a term Britain rejected as the embodiment of an encroaching EC super-state.

Instead, the political union accord describes the Community as “an ever closer union in which political decisions have to to be taken as near to the people as possible."

The 518-member EC assembly gets a modest say in shaping some EC legislation. Its new powers fall short of what the assembly had sought Le an equitable sharing of the right to make EC laws with the EC government.

Rich-Poor Gap

Spain got a formal commitment from its richer partners for more money for Itself. Ireland, Greece and Portugal, the Community's poorest members. The EC will review its bookkeeping meth-odk and In future take more account of the relative wealth of EC members.