Opinion of the European Central Bank at the request of the Council of the European Union on a recommendation for a Council Decision concerning exchange rate matters relating to the CFA franc and the Comorian franc (CON/98/37)
Date: 1998-09-22
Institutions: European Central Bank
Subjects: Africa, Comoros, France, exchange transaction, monetary union, national currency

C 200/6

EN

Official Journal of the European Communities

15.7.1999

EUROPEAN CENTRAL BANK

OPINION OF THE EUROPEAN CENTRAL BANK

at the request of the Council of the European Union on a recommendation for a Council Decision
concerning exchange rate matters relating to the CFA franc and the Comorian franc

(CON/98/37)

(1999/C 200/05)

the

412

draft Decision

1. On 24 July 1998 the European Central Bank (ECB) received
a request from the Council of the European Union for an
opinion on a proposal
for a Council Decision on the
abovementioned topic (hereinafter referred to as the draft
final, which
Decision). Document COM(1998)
contained
explanatory
memorandum presented by the European Commission,
was transmitted to the ECB. The ECB’s competence to
deliver an opinion is based on the second subparagraph
of Article 1091(1)
in conjunction with Article 109(3) of
the Treaty establishing the European Community (here-
inafter referred to as the Treaty). In accordance with the
first sentence of Article 17.5 of the Rules of Procedure of
the ECB, this opinion has been adopted by the Governing
Council of the ECB.

and

an

Øconomique

the CEMAC (CommunautØ

2. The draft Decision provides that France may continue its
present agreements concerning exchange rate matters with
the UEMOA (Union Øconomique et monØtaire ouest-
et
africaine),
monØtaire de l’Afrique Centrale) and with the Comores
upon the substitution of
the euro for the French franc.
The draft Decision provides that France and the African
signatories to these agreements shall retain sole responsi-
these agreements. The
bility for the implementation of
draft Decision also provides
various procedural
requirements on the part of the French authorities with
respect
present
agreements with the UEMOA,
the CEMAC and the
Comores, the negotiation and conclusion of modifications
to these agreements and the submission of any plans to
change the nature and scope of these agreements.

implementation

France’s

the

for

to

of

3. The ECB notes

that under

the present

agreements
concerning exchange rate matters with the UEMOA, the
CEMAC and the Comores the guarantee of convertibility
for the CFA franc and the Comorian franc is based on a
budgetary commitment of the French Treasury and not on
any commitment on the part of the Banque de France. It is
the ECB’s understanding that by authorising France to
European
continue
Community will not become party to the agreements.
Under public international
law the agreements are and
will continue to be agreements between France and the
African countries concerned. The ECB therefore suggests
that the second paragraph of the explanations relating to

the CFA franc

agreements

the

In this respect,

explanatory
Article 4 should be deleted from the
the ECB would like to
memorandum.
clarify the fact
to maintain the
that no commitment
convertiblility of the CFA franc or Comorian franc, nor
any obligation whatsoever on the part of the ECB or any
part of the ESCB, may be implied from modifications to the
agreements. The ECB considers that reference should be
made to this point in the recitals to the draft Decision. In
addition, the ECB has noted that, as mentioned in recital 7,
these agreements are unlikely to have any material effect on
the monetary and exchange rate policy of the euro area. The
ECB considers it useful that reference should also be made
in the recitals to the fact that any modification to these
shall be without prejudice to the primary
agreements
the Community’s exchange rate policy to
objective of
in accordance with Article 3a(2)
maintain price stability,
of
that a
similar reference in the corpus of the draft Decision, for
example in Articles 4 and 5, would also be warranted.
The ECB also considers that reference should be made in
the recitals to the understanding that the draft Decision does
not establish a precedent with regard to any arrangements
the
that may be decided in the future in respect of
negotiation and conclusion of agreements
concerning
monetary or
foreign exchange regime matters by the
Community with other States or international organisations.

the Treaty. This is such an important point

scope of

these agreements

4. The ECB does not consider that the procedural requirements
imposed on France by the draft Decision give full recog-
nition to the consultative role of the ECB under the Treaty
with regard to the negotiation and conclusion of modifi-
cations to France’s present agreements with the UEMOA,
the CEMAC and the Comores. While Article 5 of
the
draft Decision acknowledges the fact that plans to change
the nature or
require the
approval of the Council after consultation of the ECB, the
said article provides that such plans shall first be submitted
by France only to the European Commission and the
Economic and Financial Committee. The ECB considers
that the failure to submit such plans to the ECB would
role
spirit of
not
envisaged for the ECB by Article 109(3) of
the Treaty.
While the ECB will be represented on the Economic and
Financial Committee, the ECB considers it appropriate that
these pans should be submitted directly to the ECB in view
of the ECB’s consultative role with regard to decisions on

accord with the

consultative

the

15.7.1999

EN

Official Journal of the European Communities

C 200/7

the arrangements for the negotiation and conclusion of
monetary or
foreign exchange regime agreements with
foreign States. In this regard, the ECB draws attention to
the fact
the Treaty these
arrangements shall ensure that the Community expresses a
single position.

that under Article 109(3) of

shall

France

inform the

European
only
Decision
Commission and the Economic and Financial Committee
in advance of modifications to the agreements to the
extent that the nature or scope of the agreements remain
unchanged. The ECB considers that
the ECB should be
directly included in all aspects of the process for the same
reasons as set forth in paragraph 4 above.

the competent French authorities

5. Furthermore, while Article 3 of the draft Decision provides
shall keep the
that
European Commission,
the ECB and the Economic and
Financial Committee informed on a regular basis about
the implementation of
the agreements, the French auth-
orities shall only inform the European Commission and
the Economic and Financial Committee prior to changes
the partity between the euro and the CFA franc or
of
Comorian franc. In addition, under Article 4 of the draft

6. This Opinion will be published in the Official Journal of the

European Communities.

Done at Frankfurt am Main, 22 September 1998.

The Vice-President of the ECB

C. NOYER

OPINION OF THE EUROPEAN CENTRAL BANK

at the request of the Council of the European Union on a recommendation for a Council Decision
concerning exchange rate matters relating to the Cape Verde escudo

(CON/98/57)

(1999/C 200/06)

1. On 11 December 1998 the European Central Bank (ECB)
received a request from the Council of the European Union
for an opinion on a proposal for a Council Decision on the
abovementioned topic (hereinafter referred to as the draft
Decision). Document COM(1998) 663 final dated 18
november 1998, containing the draft Decision and an
explanatory memorandum, was transmitted to the ECB.
The ECB’s competence to deliver an opinion is based on
the second subparagraph of Article 109l(1) in conjuntion
with Article 109(3) of the Treaty establishing the European
Community (hereinafter
In
accordance with the first sentence of Article 17.5 of the
this opinion has been
the ECB,
Rules of Procedure of
adopted by the Governing Council of the ECB.

referred to as

the Treaty).

escudo. The draft Decision provides

Portuguese
that
Portugal and Cape Verde shall retain sole responsibility for
the implementation of this agreement. The draft Decision
also provides for various procedural requirements on the
part of
to the
the Portuguese authorities with respect
implementation of Portugal’s present agreement with Cape
Verde, the negotiation and conclusion of modifications to
this agreement and the submission of any plans to change
the nature and scope of the agreement. In fact, the draft
Decision is, to a large extent, similar to an earlier Decision
concerning exchange rate matters relating to the CFA franc
and the Comorian franc, on which the ECB was consulted
on 24 July 1998 and on which it delivered an opinion on
22 September 1998 (CON/98/37;
in this opinion also
referred to as the (cid:145)French case(cid:146)).

2. The draft Decision provides that Portugal may continue its
present agreement concerning exchange rate matters with
the euro for the
Cape Verde upon the substitution of

3. The ECB notes with satisfaction that its observations with
regard to the above Decision in the French case have also
been incorporated into the present draft Decision.