98/744/EC: Council Decision of 21 December 1998 concerning exchange rate matters relating to the Cape Verde escudo
Date: 1998-12-21
Institutions: Council of the European Union
Subjects: Cabo Verde, European Monetary System, Portugal, cooperation agreement, exchange rate, monetary cooperation

31. 12. 98

EN

Official Journal of the European Communities

L 358/111

COUNCIL DECISION

of 21 December 1998

concerning exchange rate matters relating to the Cape Verde escudo

(98/744/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 109(3) thereof,

Having regard to the recommendation from the Commis-
sion,

Having regard to the opinion of the European Central
Bank (1),

(1) Whereas according to Council Regulation (EC) No
974/98 of 3 May 1998 on the introduction of the
euro (2),
the euro will be substituted as from 1
January 1999 for the currency of each participating
Member State at the conversion rate;

(2) Whereas the Community will have the competence
for monetary and exchange rate matters in the
Member States adopting the euro as from the same
date;

(3) Whereas the Council decides the arrangements for
the negotiation and conclusion of agreements
concerning monetary or foreign exchange regime
matters;

(4) Whereas the Portuguese Republic has concluded
an agreement with the Republic of Cape Verde (3)
which is intended to ensure the convertibility of
the Cape Verde escudo into the Portuguese escudo
at a fixed parity;

(5) Whereas the euro will be substituted for the Portu-

guese escudo on 1 January 1999;

(6) Whereas

the Cape Verde
the convertibility of
escudo is ensured by a limited credit
facility
provided by the Portuguese government; whereas
the Portuguese government has given the assurance
that
the agreement with Cape Verde has no
substantial financial implications for Portugal;

(7) Whereas this agreement is unlikely to have any
material effect on the monetary and exchange rate
policy of the euro area; whereas in its present form
and state of implementation this agreement there-
fore is unlikely to present any obstacle to a smooth

(1) Opinion delivered on 17. 12. 1998 (not yet published in the

Official Journal).

(2) OJ L 139, 11. 5. 1998, p. 1.
(3) Acordo de coopera(cid:135)(cid:209)o cambial entre a Rep(cid:156)blica Portuguesa e
a Rep(cid:156)blica de Cabo Verde. (Decreto nº 24/98 de 15 de Julho
1998).

agreement

functioning of Economic and Monetary Union;
whereas nothing in this
can be
construed as implying an obligation for the ECB or
any NCB to support the convertibility of the Cape
Verde escudo; whereas modifications to the existing
agreement shall not lead to any obligation for the
ECB or any NCB;

(8) Whereas Portugal and Cape Verde are willing to
continue the present agreement after the substitu-
tion of the euro for the Portuguese escudo; whereas
it is appropriate that Portugal may continue the
present agreement after this substitution and that
Portugal and Cape Verde implement it under their
sole responsibility;

(9) Whereas it is necessary for the Community to be
informed on a regular basis about the implementa-
tion and envisaged modifications of the agreement;

(10) Whereas the modification or implementation of
this agreement should be without prejudice to the
primary objective of the Community’s exchange
rate policy to maintain price stability, in accord-
ance with Article 3a(2) of the Treaty;

(11) Whereas it is necessary to involve the competent
Community bodies before making any changes to
the present agreement;
the nature or scope of
whereas this applies in particular to the principle of
free convertibility at a fixed parity between the euro
and the Cape Verde escudo, convertibility being
ensured by a limited credit facility provided by the
Portuguese government;

(12) Whereas without prejudice to Community compet-
regards
ence
and Community agreements
economic and monetary union, Member States may
negotiate in international bodies and conclude
international agreements;

as

(13) Whereas this Decision does not establish a prece-
dent with respect to any arrangements that may be
decided in the future with respect to the nego-
agreements
tiation and conclusion of
concerning monetary or foreign exchange regime
matters by the Community with other States or
international organisations,

similar

L 358/112

EN

Official Journal of the European Communities

31. 12. 98

HAS ADOPTED THIS DECISION:

Article 1

Upon the substitution of the euro for the Portuguese
escudo, the Portuguese Republic may continue its present
agreement concerning exchange rate matters with the
Republic of Cape Verde.

Article 2

Portugal and Cape Verde shall keep the sole responsibility
for the implementation of this agreement.

advance the Commission, the European Central Bank and
the Economic and Financial Committee of such changes.

Article 5

Any plans to change the nature or scope of this agree-
ment shall be submitted by Portugal to the Commission,
the European Central Bank and the Economic and Finan-
cial Committee.

Such plans require the approval of the Council on the
basis of a recommendation from the Commission and
after consultation of the European Central Bank.

Article 3

Article 6

The competent Portuguese authorities shall keep the
Commission,
the European Central Bank and the
Economic and Financial Committee informed on a
regular basis about the implementation of the agreement.
The Portuguese authorities shall inform the Economic
and Financial Committee prior to changes of the parity
between the euro and the Cape Verde escudo.

Article 4

Portugal may negotiate and conclude modifications to the
present agreement to the extent that the nature or scope
inform in
of

is not changed. It shall

the agreement

This Decision shall apply as from 1 January 1999.

Article 7

This Decision is addressed to the Portuguese Republic.

Done at Brussels, 21 December 1998.

For the Council

The President

M. BARTENSTEIN