European Central Bank recommendation for a Council Regulation (EC) concerning further calls of foreign reserve assets by the European Central Bank (ECB/1999/1)
Date: 1999-09-23
Institutions: European Central Bank
Subjects: European Central Bank, bank deposit, foreign-exchange reserves

23.9.1999

EN

Official Journal of the European Communities

C 269/9

EUROPEAN CENTRAL BANK

European Central Bank recommendation for a Council Regulation (EC) concerning further calls of
foreign reserve assets by the European Central Bank

(ECB/1999/1)

(1999/C 269/08)

EXPLANATORY MEMORANDUM

I. INTRODUCTION

the Statute of

Article 123(1) of
the Treaty establishing the European
Community (hereinafter referred to as the Treaty) requires
the Council of
the European Union (the EU Council),
immediately after 1 July 1998, to adopt the complementary
legislation referred to in Article 107(6) of
the Treaty and
the European System of
Article 42 (1) of
Central Banks and of the European Central Bank (hereinafter
referred to as the Statute). A special procedure is foreseen
within the Treaty for the adoption of the provisions referred
to in Article 107(6): the EU Council shall adopt them either on
a proposal from the Commission or on a recommendation
from the European Central Bank (ECB). To avoid any dupli-
cation of effort, the ECB and the Commission have agreed that
the ECB will prepare a recommendation for the Council Regu-
lation referred to in Article 30(4) of the Statute.

II. GENERAL CONSIDERATIONS

it

is important

Article 30(4) (2) of the Statute stipulates that further calls of
foreign reserve assets beyond the limit set in Article 30(1) may
be effected by the ECB. It is further required that the Council
sets the limits and conditions for these further calls of foreign
reserve assets under the procedure laid down in Article 42. In
the secondary legislation
this respect
foresees a pre-established limit
such further calls of
foreign reserve assets. By merely setting a ceiling to the
amount of foreign reserve assets in the secondary legislation,
rather than stipulating specific conditions,
it is intended to
enhance the necessary financial independence of the ECB and
the convenience to provide flexibility for different possible
scenarios which should not be reflected in a Council Regu-
further calls
lation. The assessment

for the need to effect

that

for

(1) Article 42 of the Statute states:

(cid:145)In accordance with Article 106(6) of this Treaty, immediately after
the decision on the date for the beginning of the third stage, the
Council, acting by a qualified majority either on a proposal from
the Commission and after consulting the European Parliament and
the ECB or on a recommendation from the ECB and after
consulting the European Parliament and the Commission, shall
adopt
the provision referred to in Articles 4, 5(4), 19(2), 20,
28(1), 29(2), 30(4) and 34(3) of this Statute.(cid:146)

(2) Article 30(4) states:

(cid:145)Further calls of foreign reserve assets beyond the limit set in Article
30(1) may be effected by the ECB, in accordance with Article 30(2),
within the limits and under the conditions set by the Council under
the procedure laid down in Article 42.(cid:146)

limit

to be established in the proposed
within the overall
secondary legislation should be left
the
Governing Council, under the voting procedures provided for
in Article 10(3) of the Statute.

to the decision of

To ensure that
the complementary legislation concerning
further calls of foreign reserve assets by the ECB is directly
enforceable in participating Member States on identical terms,
it needs to be adopted in the form of an EU Council Regu-
lation.

III. COMMENTS ON THE ARTICLES

Article 1 (cid:151) Definitions

This Article contains definitions of
Member State(cid:146),
assets(cid:146), as used in the recommendation.

the terms (cid:145)participating
(cid:145)national central bank(cid:146) and (cid:145)foreign reserve

The definition of (cid:145)foreign reserve assets(cid:146) is consistent with the
foreign reserve assets that may be provided to the ECB by the
national central banks in accordance with Article 30(1) of the
Statute, which excludes Member States’ currencies, IMF reserve
positions and SDRs. In addition,
(cid:145)foreign reserve assets(cid:146) have
been defined to include official foreign reserves, consistent with
the wording of Article 105(2), third indent, of the Treaty estab-
lishing the European Community.

Article 2 (cid:151) Further calls of foreign reserve assets

This Article stipulates that the ECB may effect further calls of
foreign reserve assets from the national central banks beyond
the limit set in Article 30(1) of the Statute of the European
System of Central Banks and of the European Central Bank up
to an amount equivalent to an additional EUR 50 000 million.
It is considered that an amount equivalent to the limits set for
the initial transfer, i.e., EUR 50 000 million, is appropriate for
the time being, but that the ceiling might be increased at a later
stage, following the same procedure, once the possible needs of
the ECB have been more clearly established.

Article 2 further provides that the central bank of a Member
State whose derogation has been abrogated, or who is treated
on the same basis as the central bank of a Member State whose
derogation has been abrogated, shall transfer to the ECB a sum
of foreign reserve assets determined by multiplying the euro

C 269/10

EN

Official Journal of the European Communities

23.9.1999

value at current exchange rates of the foreign reserve assets
which have already been transferred to the ECB by way of
further calls, by the ratio between the number of shares
subscribed by the central bank concerned and the number of
shares already paid up by the other national central banks. This
provision is designed to ensure that the same methodology for
calculating the level of foreign reserves to be transferred by
Member States that may adopt the euro in the future is used

for further calls as is stipulated for the initial call of foreign
reserve assets in accordance with Article 49(1) of the Statute.

Article 3 (cid:151) Final provisions

This Regulation is set to take effect immediately after its publi-
cation in the Official Journal of the European Communities.

Council Regulation (EC) concerning further calls of foreign reserve assets by the European Central
Bank

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Statute of the European System of Central
Banks and of the European Central Bank (hereinafter referred
to as the Statute) and in particular to Article 30(4) thereof,

Having regard to the recommendation of the European Central
Bank (ECB),

Having regard to the opinion of the European Parliament,

Having regard to the opinion of
European Communities,

the Commission of

the

Acting in accordance with the procedure foreseen in Article
107(6) of
the Treaty establishing the European Community
(hereinafter referred to as the Treaty) and Article 42 of the
Statute and under the conditions set out in Article 122(5)
and paragraph 7 of Protocol No 11 on certain provisions
relating to the United Kingdom of Great Britain and
Northern Ireland,

(1) Whereas Article 30(1) of the Statute requires that the ECB
be provided by the national central banks of participating
than
Member States with foreign reserve assets, other
Member States’ currencies, euro,
IMF reserve positions
and SDRs, up to an amount equivalent to EUR 50 000
million;

(2) Whereas Article 30(4) of the Statute requires the Council to
specify the limits and conditions under which further calls
of foreign reserve assets beyond the limit set in Article
30(1) of the Statute may be effected by the ECB;

(3) Whereas Article 30(4) of the Statute requires that such
further calls be effected in accordance with Article 30(2)
of the Statute; whereas Article 30(2) in conjunction with
Article 43(6) of the Statute and paragraph 10(b) of Protocol
No 11 on certain provisions
relating to the United
Kingdom of Great Britain and Northern Ireland requires
that the contributions of each national central bank shall
be fixed in proportion to its share of the capital of the ECB
subscribed by the national central banks of participating
Member States;

(4) Whereas Article 10(3) in conjunction with Article 43(4) of
the Statute requires that for any decisions to be taken under
Article 30 of
the votes in the Governing
Council of the ECB shall be weighted according to the
shares of
the national central banks of participating
Member States in the subscribed capital of the ECB;

the Statute,

(5) Whereas Article 30(4) of the Statute, in conjunction with
Articles 43(4) and 43(6) of the Statute and paragraph 8 of
Protocol No 11 on certain provisions relating to the United
Kingdom of Great Britain and Northern Ireland and
paragraph 2 of Protocol No 12 on certain provisions
shall not confer any rights or
relating to Denmark,
impose any obligations on the non-participating Member
States;

that

(6) Whereas Article 49(1) of the Statute in conjunction with
paragraph 10(b) of Protocol No 11 on certain provisions
relating to the United Kingdom of Great Britain and
Northern Ireland requires
the central bank of a
Member State whose derogation has been abrogated, or
who is treated on the same basis as the central bank of a
Member State whose derogation has been abrogated, shall
transfer to the ECB foreign reserve assets in accordance
with Article 30(1) of the Statute; whereas Article 49(1)
of
the sum to be transferred
shall be determined by multiplying the euro value at
current exchange rates of the foreign reserve assets which
have already been transferred to the ECB in accordance
with Article 30(1), by the ratio between the number of

the Statute requires that

23.9.1999

EN

Official Journal of the European Communities

C 269/11

shares subscribed by the national central bank concerned
and the number of shares already paid up by the other
national central banks;

(cid:151) (cid:145)national central bank(cid:146) shall mean the central bank of a

participating Member State, and

(7) Whereas all references to amounts in euro in the afore-
mentioned provisions of
in this Regulation
and in any call of or request by the ECB for foreign
reserve assets are references to nominal amounts in euro
at the time a call of such foreign reserve assets by the ECB
is effected;

the Treaty,

(8) Whereas it is deemed appropriate that, in case of need, the
ECB may effect further calls of foreign reserve assets from
the national central banks beyond the limit set in Article
30(1) of the Statute, up to an amount equivalent to an
foreign
additional EUR 50 000 million;
reserve assets that may additionally be called by the ECB
from the national central banks may be increased by the
Council acting in accordance with the procedure laid down
in Article 42 of the Statute,

the amount of

HAS ADOPTED THIS REGULATION:

Article 1

Definitions

For the purpose of this Regulation:

(cid:151) (cid:145)foreign reserve assets(cid:146)

shall mean any official

foreign
reserve assets of the participating Member States held by
national
are denominated in, or
that
comprise, currencies, units of account or gold other than
Member States’ currencies, euro, IMF reserve positions and
SDRs,

central banks

(cid:151) (cid:145)participating Member State(cid:146) shall mean a Member State
which has adopted the single currency in accordance with
the Treaty.

Article 2

Further calls of foreign reserve assets

1.
The ECB may effect further calls of foreign reserve assets
from the national central banks beyond the limit set in Article
30(1) of
to an
additional EUR 50 000 million,
in case of need for such
foreign reserve assets.

the Statute, up to an amount equivalent

2.
The central bank of a Member State whose derogation
has been abrogated, or who is treated on the same basis as the
central bank of a Member State whose derogation has been
abrogated, shall transfer to the ECB a sum of foreign reserve
assets determined by multiplying the euro value at current
exchange rates of
the foreign reserve assets which have
already been transferred to the ECB in accordance with
paragraph 1 of this Article, by the ratio between the number
of shares subscribed by the central bank concerned and the
number of shares already paid up by the other national central
banks.

Article 3

Final provisions

This Regulation shall enter into force on the day following its
publication in the Official Journal of the European Communities.

This Regulation shall be binding in its entirety and directly
applicable in all Member States.