EN
OPINION OF THE EUROPEAN CENTRAL BANK
of 13 December 2002
at the request of the Italian Ministry for th e Economy and Finance on a draft provision of
the 2003 Budget Law on banknotes and coins 
(CON/2002/31)
1. On 6 December 2002 the European Central Bank (ECB) received a request from the Italian
Ministry for the Economy and Finance for an opi nion on a draft provision of the 2003 Budget Law
on banknotes and coins (hereina fter the draft provision).
2. The ECBs competence to deliver an opinion is ba sed on Article 105(4) of the Treaty establishing
the European Community, Article 4 of the Statute of the European System of Central Banks and of
the European Central Bank and the first and th ird indents of Article 2(1) of Council Decision
98/415/EC of 29 June 1998 on the consultation of  the European Central Bank by national
authorities regarding draft legislative provisions1, since the draft provision concerns currency
matters and the Banca dItalia. In accordance with the first sentence of Article 17.5 of the Rules ofProcedure of the European Central Bank, the Governing Council of the ECB has adopted this
opinion.
3. The first paragraph of the draft provision ame nds Article 3 of Law No 96 of 7 April 1997 and
Article 52b of Legislative Decree No 213 of 24 June 1998, by inserting a new paragraph into eachaccording to which banknotes and coins denominated  in lira, respectively, can be converted into
euro at all branches of the Banca dItalia with in ten years of the date on which they cease to be
legal tender. In addition, the new provision to be inserted into the Legislative Decree would
confirm the terms currently prescribed for the laps e of the right of conversion by Article 3(1) of
Law No 96/1997 and Article 52b(1) of Legislative Decree 213/98, also for the purposes of the
conversion into euro at the Banca dItalias branches.
4. As regards the timing of the lapse of the right of conversion of banknot es and coins denominated
in lira into euro, the ECB notes that Artic le 16 of Council Regulation (EC) No 974/98 of
3 May 1998 on the introduction of the euro2 states that the issuers of banknotes and coins of the
Member States shall continue to accept, against euro at the conversion rate, the banknotes and
coins previously issued by them in accordance w ith the laws or practices of each participating
                                                     
1 OJ L 189, 3.7.1998, p. 42.
2 OJ L 139, 11.5.1998, p. 1.
2Member State. The draft provisi on now expressly clarifies that the ordinary terms for the lapse of
the right of conversion to legal tender under Italian law for banknotes and coins denominated inlira also apply for the purposes of the conversion in to euro at the Banca dItalias branches. The
ECB welcome this provision as it enhances legal clarity.
5. As regards coins, the ECB notes that the draft pr ovision has regard to the possibility provided for
by Article 11 of Regulation (EC) No 974/98, accord ing to which [e]xcept fo r the issuing authority
and for those persons specifically designated by  the national legislation of the issuing Member
State, no party shall be obliged to accept more  than 50 coins in any single payment, and
designates for the purpose of the unlimited conversi on of coins denominated in lira into euro the
Banca dItalia. 
6. The second paragraph of the draft provision deals with the payment by the Banca dItalia to the
Government of the value of banknotes denomin ated in lira that have been withdrawn from
circulation and which, 10 years after their withdr awal, still have not been submitted for exchange.
The draft provision envisages the following: by 31 January 2003, the Ministry for the Economy
and Finance and the Banca dItalia will make an evaluation of the banknotes denominated in lirathat, according to their forecasts, will be not submitted for exchange by 28 February 2012. Theestimated total value will be paid by the Ban ca dItalia to the Government according to the
following timetable: 65% will be paid by 28 February 2003; up to 25% by 31 January 2008 havingregard to the trend of reimbursements; and the re sidual value of the banknotes denominated in lira
that have not by then been submitted for exchange by 31 March 2012. The ECB has no objectionto this provision.
7. It is understood that under Article 8(1) of Le gislative Decree No 43 of 10 March 1998 the Banca
dItalia is empowered to draw up its financial st atements in compliance with any decisions taken
by the ECB in accordance with Article 26.4 of the Statute. The envisaged treatment of banknotes
denominated in lira is compliant with Guideline ECB/2002/10 of 5 December 2002 on the legalframework for accounting and financial reporting in the European System of Central Banks,according to which the banknotes in circulation figure shall exclude, as of 1 January 2003,banknotes denominated in national currency units. The ECB notes that for statistical purposes such
national banknotes will also be excluded from cur rency in circulation as from the same date.
8. The draft provision states that if the actual value of banknotes denominated in lira to be converted
into euro exceeds the estimated value, the Banca dItalia sha ll convert the excess value using
holdings on the Treasurys account referred to in  Article 4 of Law No 483 of 26 November 1993.
The ECB welcomes the draft provision in so far as  it limits possible central bank financing of the
Government by the Banca dItalia. The ECB notes  that an additional safeguard is provided by
Article 5 of Law No 483/93, which obliges the Tr easury to cover any shortfalls on its deposit
account.
39. This opinion will be published on the ECBs website.
Done at Frankfurt am Main on 13 December 2002.
The President of the ECB
[signed]
Willem F. DUISENBERG