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(2004/C 33 E/034)

WRITTEN QUESTION P-0275/03

by Wolfgang Ilgenfritz (NI) to the Commission

(31 January 2003)

Subject:   Transfer of currency reserves

Transfers of currency reserves are reported to have been made in Belgium, the Netherlands and Italy without being challenged by any EU bodies.

Were currency reserves actually transferred by the national banks, and are they then freely available for use (to finance public road building or to fund research, for example) on the basis of national budget decisions?

Must such transfers be approved by EU bodies, and if so by which bodies, or can such a decision be taken at purely national level?

How large is the volume of currency reserves available for such transfers in the individual countries?

Answer given by Mr Solbes Mira on behalf of the Commission

(5 March 2003)

The Commission does not have any information about recent transfers of currency reserves by national central banks in favour of national governments.

There is limited availability of foreign reserves for transactions at the level of the Member States. For any such transaction the approval by the European Central Bank's (ECB's) Governing Council is indispensable.

Indeed, according to Article 105(2) of the EC Treaty one of the basic tasks to be carried out through the European System of Central Banks (ESCB), which is composed of the European Central Bank (ECB) and the euro area national central banks (NCB), is to hold and manage the official foreign reserves (gold, foreign currency, special drawing right (SDR)) of the euro area Member States. Thus, the euro area reserves consist of both the ECB's and those held by participating NCBs. Reserve assets of the ECB are those which are pooled under Article 30 of the Statute of the ESCB according to the capital subscription key. All other reserve assets are retained by the NCBs in relation to Article 30(4) as long as no transfer of ownership takes place. According to Article 31(2) of the Statute of the ESCB all other operations in foreign reserves remaining with the NCBs shall, above a certain limit, be subject to further approval by the ECB to ensure that these operations will not interfere with the monetary and exchange rate policies of the euro area. Transactions undertaken by NCBs in fulfilment of their obligations vis-à-vis international organisations, such as the International Monetary Fund (IMF) and the Bank for International Settlements (BIS), are exempt from this requirement.

The amount of reserves held by NCBs that could be used in transactions is limited, because Council Regulation (EC) No 1010/2000 of 8 May 2000 concerning further calls of foreign reserve assets by the European Central Bank (1) provides the ECB with the option to ask for the transfer of additional foreign reserve assets. The type of reserves that can be considered for transactions is also subject to a constraint, the 1999 Central Bank Gold Agreement. Among its signatories are the ECB and 11 euro area NCBs (all except the Bank of Greece). They agreed not to sell gold for five years (until September 2004 with a possible extension) unless such sales had already been planned before. Furthermore, operations in foreign reserves are subject to all other parts of the legal framework of the euro area, in particular to Article 101 (central bank financing of the budget) and to Article 7 of the Protocol on the Statute of the ESCB (independence).

The Member States do not have foreign reserves at their disposal for transfers between the NCBs and the national governments for budgetary purposes.

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(1)OJ L 115, 16.5.2000.

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