Opinion of the European Monetary Institute on a consultation from the Belgian Ministry of Finance under Article 109f(6) of the Treaty establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI as elaborated in the Council Decision of 22 November 1993 (93/717/EC) on a proposed reform of the Organic Law of the National Bank of Belgium (CON/96/16)
Date: 1997-01-10
Institutions: European Monetary Institute
Subjects: Belgium, central bank, gold, issuing of currency, national law, profit, redemption of public debt

OPINION OF THE EUROPEAN MONETARY INSTITUTE

on  a  consultation  from  the  Belgian  Ministry  of  Finance  under  Article  109f(6)  of  the  Treaty

establishing  the  European  Community  (the  “Treaty”)  and  Article  5.3  of  the  Statute  of  the  EMI  as

elaborated in the Council Decision of 22 November 1993 (93/717/EC) on a proposed reform of the

Organic Law of the National Bank of Belgium

CON/96/16

1.

The consultation was initiated on 22 November 1996 by the Belgian Ministry of Finance. For

this purpose, the Ministry of Finance submitted the text of the draft legislation together with an

explanatory memorandum to the EMI.

2.

The EMI’s competence to deal with the request for consultation is based on Article 1, second

indent,  of  the  Council  Decision  of  22  November  1993  (93/717/EC),  as  the  draft  legislation

concerns the statute of the National Bank of Belgium (the “Bank”). 

3.

The proposed amendments to the Bank’s statute form part of a more extensive review thereof

on  which  the  EMI  was  consulted  in  August  1996  and  on  which  it  gave  its  opinion  on

6 September 1996  (CON/96/10).  The  amendments  which  are  presently  in  addition  being

proposed concern the Bank’s powers to issue for collection or commemorative purposes gold

coins  with  legal  tender  status  and  to  transfer  the  net  revenues  thereof  to  the  State  for  the

purpose of reducing its debts in foreign currencies. The main additions to the Bank’s Organic

Law read in an unofficial translation as follows:

Article 23 bis

“The  Bank  shall  be  authorised,  subject  to  the  approval  of  the  ECB,  where  appropriate,  to

issue for collection or commemorative purposes gold coins with legal tender status in a total

amount  of  up  to  10%  of  the  weight  of  gold  recorded  in  the  assets  of  the  Bank  as  at

1 January 1987. At most, 2% of this weight of gold may be used for this purpose each year.

The net revenue resulting from the issue of such coins shall be transferred to the State for

the  purpose  of  reducing  its  debts  in  foreign  currencies  after  the  deduction  of  the  dues  to

which Luxembourg is entitled by virtue of the Protocol of 9 March 1981 on the monetary

association between the two countries.”

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Article 43 bis

“Notwithstanding the provisions in Article 23 bis, the net revenue resulting from the issue of

coins for collection and commemorative purposes shall be transferred to the State in a total

amount of up to the unused balance of 2.75% of the weight of gold recorded in the assets of

the Bank as at 1 January 1987 and which the State was authorised to use, particularly for the

purpose of issuing coins in accordance with Article 20 bis, second paragraph, of the Law of

24 August 1939 on the National Bank of Belgium.”

For reasons of easy reference, Article 20 bis, second paragraph, of the Bank’s present statute is

also cited below.

“Notwithstanding  the  provisions  of  the  first  paragraph,  any  capital  gain  realised  after

1 January 1987 as a result of transfers of gold assets, especially for the issuing by the State

of  collector’s  or  commemorative  coins,  shall  be  allocated  to  the  State.  However,  the  total

amount of the transfers whose increased value is being allocated in this way may not exceed

2.75% of the weight of the gold which appears in the Bank’s assets on the aforementioned

date.”

4. Whereas Article 20 bis, second paragraph, implies that the State may presently up to a certain

limit issue gold coins for collection or commemorative purposes, this function would be taken

over by the Bank under Article 23 bis. For the future, this gives rise to the question whether the

issue of gold coins by the Bank is compatible with the Bank’s ESCB-related tasks. Article 14.4

of the Statute of the ESCB/ECB states that national central banks may perform functions other

than  those  specified  in  this  Statute  unless  the  Governing  Council  finds,  by  a  majority  of  two

thirds of the votes cast, that these interfere with the objectives and tasks of the ESCB. However,

without prejudice to the ECB’s Governing Council’s exclusive competence to take action under

Article 14.4,  the  EMI  does  not  see  an  incompatibility  with  ESCB-related  tasks.  Indeed,  the

issue of such coins is subject to approval by the ECB and does not in itself interfere with the

objectives and tasks of the ESCB. 

Furthermore, there are three issues which the EMI would like to note, merely as a reminder, in

connection with the draft legislation. Firstly, the issue of gold coins by the Bank is an activity

which,  in  accordance  with  Article  14.4  of  the  ESCB/ECB  Statute,  shall  be  performed  on  the

responsibility  and  the  liability  of  the  Bank  and  shall  not  be  regarded  as  being  part  of  the

functions of the ESCB. Secondly, the introduction of euro coins and the relevant Community,

and where appropriate national, legislation to support the introduction of such coins will affect

the legal tender status of Belgian franc gold coins. And  last  but  not  least,  Article  31.2  of  the

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ESCB/ECB  Statute  makes  national  operations  with  foreign  reserve  assets  inclusive  of  gold

above a certain limit subject to the approval of the ECB.

As far as the transfer of the net revenues of the issue of gold coins to the State is concerned, the

EMI understands that this reflects the Bank’s status as legal owner of Belgium’s gold reserves,

whilst the State is considered to be the fiduciary owner, a situation which was also implied in

Article 20 bis, second paragraph. The main differences of the new regime for the issue of gold

coins, apart from the issuing authority, are: another ceiling (10% in total and not more than 2%

per year, with the same historical benchmark as contained in Article 20 bis, i.e. the weight of

gold  in  the  Bank’s  books  on  1 January 1987)  and  an  explicit  reference  that  the  net  revenues

transferred to the State may only be used to reduce Belgium’s debts in foreign currencies. This

construction is not deemed incompatible with provisions of the Treaty and/or the ESCB/ECB

Statute. This observation applies also to the transitory arrangement contained in Article 43 bis

which provides for equal treatment (i.e. transfer of net revenues from the Bank to the State) of

that  part  of  Belgium’s  gold  reserves  which  the  State  in  the  past  was  authorised  to  use,

particularly for the issue of coins, and which it did not use. 

5. 

The EMI agrees that this opinion may be made public by the consulting authority. 

10 January 1997