WRITTEN QUESTION No. 684/98 by Umberto BOSSI to the Council. The Banca d'Italia's gold and the Italian public sector borrowing requirement
Date: 1998-03-16
Institutions: BOSSI, European Parliament
Subjects: Economic and Monetary Union, European accounting system, Italy, budget deficit, economic convergence, national accounts, public finance

2. 10. 98

EN

Official Journal of the European Communities

C 304/145

distinction  between  structural  and  temporary  measures.  In  doing  so,  the  Commission  has  watched  over  the
transparency and the accuracy of the accounting systems of all Member States.

Concerning the specific operation to which the present question refers, the Commission has already analysed its
nature and determined its appropriate accounting treatment in terms of the system of integrated accounts (cid:145)ESA
79(cid:146). In particular, in its decision No 5/98 of 27 January 1998 (cid:145)Eurostat has decided to treat this payment as a
financial  transaction  which  has  no  effect  on  the  measurement  of  the  government  deficit  as  defined  for  the
purposes  of  the  excessive  deficit  procedure(cid:146).  In  other  words,  this  operation  will  not  reduce  the  deficit  in  the
definition which is relevant for access to European monetary union (EMU), that is, the general government net
borrowing.

The Commission will present an assessment of the sustainability of the Italian budgetary position, as well as that
of other Member States, in its report on convergence, in accordance with Article 109j(1) EC Treaty to be released
by 25 March 1998.

(98/C 304/216)

WRITTEN QUESTION E-0684/98

by Umberto Bossi (NI) to the Council

(16 March 1998)

Subject: The Banca d(cid:146)Italia(cid:146)s gold and the Italian public sector borrowing requirement

The circumstances surrounding the sale of gold belonging to the Banca d(cid:146)Italia to the Ufficio Italiano Cambi
(UIC, the Italian Foreign Exchange Office) is only the latest in a long series of scandals which have shown Italy
in the undignified role of desperately attempting to meet the Maastricht criteria.

A document recently approved in Brussels by the Commission, to the effect that the Council will look into this
case and that Eurostat is in the process of investigating the matter to ascertain the nature of the transaction in
question,  notes  that  in  1974,  to  protect  the  lira  against  attacks  by  speculators,  the  Banca  d(cid:146)Italia  obtained  a
US $ 2 billion  loan  from  the  Bundesbank.  The  UIC  purchased  543  tonnes  of  gold  from  the  Banca  d(cid:146)Italia  to
underwrite the loan. The loan was paid off in September 1978, but the gold remained on the UIC(cid:146)s balance sheet.
It was revalued over the years, but the corresponding capital gains were never taxed because, under Italian tax
law, capital gains are not subject to tax until they are realized. In July 1997 the UIC -which, by the way, was in the
process of being wound up- sold the gold back to the Banca d(cid:146)Italia. That operation generated a capital gain of c.
Lit 7600 billion, and hence the requirement to pay Lit 4000 billion in tax, part of which (Lit 3 400 billion) was
paid in November 1997. Consequently the sum of Lit 3400 billion was credited to the public exchequer and duly
entered against the public sector deficit, which proved to have been kept down to 2.7% of GDP by the end of
1997, in other words well below the crucial 3% ceiling set by the Maastricht criteria.

Does the Council intend to finally ascertain the nature of this transaction?

Does the Council intend to establish whether it is permissible to encourage tax revenues of this kind to be offset
against the public sector deficit?

If not, does the Council not consider that this incident shows yet again that Italy has not changed its ways and is
prepared to stoop to dubious accounting practices in order to enter Europe?

Answer

(8 June 1998)

On the basis of the convergence reports presented by the Commission and the European Monetary Institute, and
in the light of the favourable Opinion delivered by the European Parliament, on 2 May 1998 the Council, meeting
at the level of Heads of State or Government, took the view that eleven Member States, including Italy, fulfilled
the necessary conditions for the adoption of the single currency.

The Council(cid:146)s assessment took account of all relevant factors and in particular evaluated the sustainability of the
Italian government(cid:146)s financial position.