3.

Article 4 is replaced by the following: ‘Article 4 Adjustments to intra-Eurosystem balances 1. For the purposes of monetary income calculation, each NCB’s intra-Eurosystem balances on euro banknotes in circulation shall be adjusted by a compensatory amount determined in accordance with the following formula: C = (K – A) × S where: C is the compensatory amount, K is the euro amount for each NCB that results from the application of the subscribed capital key to the average value of banknotes in circulation during the reference period, whereby the amount of banknotes in circulation denominated in the national currency of a Member State that adopts the euro shall be translated into euro at the daily foreign exchange reference rate during the reference period, A is the average euro value for each NCB of banknotes in circulation during the reference period, translated into euro at the daily foreign exchange reference rate during the reference period, S is the following coefficient for each financial year, starting with the cash change-over date: Financial year Coefficient Cash change-over year 1 Cash change-over year plus one year 0,8606735 Cash change-over year plus two years 0,7013472 Cash change-over year plus three years 0,5334835 Cash change-over year plus four years 0,3598237 Cash change-over year plus five years 0,1817225 2. The sum of the compensatory amounts of the NCBs shall be zero. 3. Compensatory amounts shall be calculated each time a Member State adopts the euro or when the ECB’s subscribed capital key changes. 4. The compensatory amount of a new Eurosystem NCB shall be allocated to the existing Eurosystem NCBs when that Member State joins, in proportion to the respective shares of existing Eurosystem NCBs in the subscribed capital key, with the sign (+/–) reversed, and shall be additional to any compensatory amounts already in force for existing Eurosystem NCBs. 5. The compensatory amounts and the accounting entries to balance those compensatory amounts shall be recorded on separate intra-Eurosystem accounts in the books of each NCB with a value date of the cash change-over date and the same value date of each following year of the adjustment period. The accounting entries to balance the compensatory amounts shall not be remunerated. 6. If the value of euro banknotes that the Banque centrale du Luxembourg puts into circulation in 2002 exceeds the average value of its banknotes in circulation during the period from 1 July 1999 to 30 June 2001 by 25 % or more, then for the Banque centrale du Luxembourg letter ‘A’ in the formula set out in paragraph 1 shall be the value of banknotes put into circulation by the Banque centrale du Luxembourg in 2002 up to a maximum limit of EUR 2,2 billion. Upon application of this derogation, all compensatory amounts calculated on the basis of Article 4(1) shall be subject to retroactive adjustments at the end of 2002, in order to ensure compliance with paragraph 2. Such retroactive adjustments shall be in proportion to the subscribed capital key. 7. By derogation from paragraph 1, on the occurrence of specific contingencies relative to changes in patterns of banknote circulation, as set out in Annex III to this Decision, each NCB’s intra-Eurosystem balances on euro banknotes in circulation shall be adjusted in accordance with the provisions set out in that Annex. 8. The adjustments to intra-Eurosystem balances provided for in this Article shall cease to apply from the first day of the sixth year following the relevant cash change-over year.’