OPINION OF THE EUROPEAN CENTRAL BANK
at the request of the Italian Ministry of the Treasury under Article 109f (6) of the Treaty
establishing the European Community,  Article 5.3 of the Statute of the EMI and
Council Decision 93/717/EC of 22 November 1993, concerning a draft legislative Decree
containing measures for the introduction of the euro in the Italian legal system
pursuant to Law no. 433 of 17 December 1997 (the draft legislative decree)
(CON/98/23)
1. On 24 April 1998, the EMI received a request fo r an opinion on the draft legislative decree
from the Italian Ministry of the Treasury. This opinion is based on an on the English translation
of the draft submitted to the EMI by the consulting authority.
2. In accordance with  Article 109l (2) of the Treaty, the ECB has taken over the advisory
functions of the EMI which has gone into liquidation upon the establishment of the ECB on
1 June 1998. The ECBs competence to deliver an opinion is based on Article 1.1, first and
second indent, of the Council Decision (93/717/EC) of 22 November 1993 on the consultation
of the EMI by the authorities of the Member Stat es on draft legislative provisions, as the Draft
Legislative Decree contains provisions concerning the introduction of the euro.
3. The purpose of the draft legislative decree is to implement the Law no. 433/1997, delegating to
the Government the authority to adopt rules in the changeover area, on which the EMI has
already given its opinion. The present opinion will therefore concentrate on the technical details
of the implementation of this law. In general, the EMI welcomes the effort made by the Italian
authorities to implement the changeover in full consistency with the principles set by
Community legislation and to promote the intr oduction of the euro beyond the minimum levels
required. 
4. The ECB takes note of the introduction of the provision empowering th e Governor of Banca
dItalia to indicate a substitute for the Italian re ference rate official discount rate, which will
disappear at the beginning of Stage Three. This  provision, very similar to the ones contained in
the draft legislation of other countries for the substitution of official rates (Belgium, Germany,
Austria, Portugal), has the purpose of improving legal certainty for the markets. However, the
ECB notes that the five-year term indicated in  Article 2 is a maximum term. The publication of
such rate may be expected to cease, within th is term, as soon as the need to ensure legal
certainty will allow; in any event, it would be preferable that the period of efficacy of the
reference rate does not coincide with  the three years transition period.
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5. The ECB welcomes Article 2.2 which empowers the Ministry of Treasury to certify with a
decree which financial parameters have been s ubstituted for in the markets by new parameters
referring to the entire euro area. This is a helpful contribution to clarity; it might even be
suggested to publish such decrees before 1 January 1999, thereby reducing legal uncertainty,
especially on the question on whether the Ita lian interbank rate RIBOR should or not be
replaced by the euro-area indicator EURIBOR. 
6. The ECB welcomes the provision in Article 3 introducing stricter accuracy rules for the
conversion from lira to euro. The ECB realises th at the risk of inaccuracies due to the rounding,
which can have particularly large consequences if prices and tariffs are fixed on a very low
unitary basis (telephone, electricity, etc.) have par ticularly severe effects in the case of Italian
lira. The solution found by the Italian authorities th rough this very detailed Article is justified
by the particular arithmetic intricacy of conver sions between euro and lira and seems to achieve
the objective of reducing inaccuracies in the conversion. However, the ECB would welcome anexplicit mention of the inapplicability of Artic le 3 to conversions between national currency
denominations during the transitional phase. In pa rticular, the last indent of paragraph 1 of
Article 3, which defines a minimum standard of  two digits for amounts of more than 1.000 lira,
shall not be applicable to any conversion between  the lira and other participating currencies, as
the euro Regulation explicitly foresees a mini mum rounding to three decimal digits for the
triangulation algorithms. Moreover, the ECB su ggests to add a provision stating, similarly to
what already done to by the changeover legisl ation of other Member States, that if the
conversation rules of Article 3 are respecte d, possible remaining arithmetical inaccuracies
would not put at risk the "legal" correspondence between the two amounts.
7. Concerning Article 6, dealing with the rede nomination of international debt instruments
denominated in the currency of a participating Member State, it is the opinion of the ECB that
the text should be further clarified. In fact , Article 8, paragraph 4, of Council Regulation
974/98, permits redenomination of international bonds and loans issued by a Member State
under its national law but in another currency when  the Member State issuing that currency has
redenominated in euro its public debt. Clearly, in ternational debt instruments governed by a law
different from the Italian one are not subject to Article 6 and will be redenominated inaccordance with the law of the contract. However,  for the sake of clarity, the ECB suggests to
add in Article 6 a reference to the Italian law. The same reasoning, and the same suggestion, isapplicable with reference to Article 13. Moreov er, the wording issuing Member States, both
in Article 6 and in Article 13, might give rise to  confusion. The ECB suggest s to clarify that the
reference is to the Member States issuing that currency.
8. Concerning the redenomination procedures, alt hough they seem to differ from the method used
in most other countries, the ECB considers that this is perfectly compa tible with the general
rules of the euro Regulation. The difference betw een the Italian method and that of the other
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countries can be justified by the fact that It aly will convert not only dematerialised but also
currently materialised debt. 
The ECB confirms that it has no objection to this opinion being made public by the competent Italian
authorities at their discretion.
4 June 1998