Opinion of the European Central Bank at the request of the Spanish Ministry of Economy on a draft law of modification of Law 46/1998, on the introduction of the euro (CON/00/22)
Date: 2000-10-05
Institutions: European Central Bank
Subjects: Spain, euro, issuing of currency, monetary integration, money, national law

OPINION OF THE EUROPEAN CENTRAL BANK

at the request of the Spanish Ministry of Economy on a draft law of modification of

Law 46/1998, on the introduction of the euro

CON/00/22

1. 

On  5  September  2000  the  European  Central  Bank  (ECB)  has  received  a  request  from  the

Spanish  Ministry  of  Economy  for  an  opinion  on  a  draft  law  amending  Law  46/1998,  on  the

introduction of the euro (hereinafter the “Draft Law”).

2. 

The ECB’s competence to deliver an opinion on the Draft Law is based on Article 2 (1), first

indent, of the Council Decision (98/415/EC) of 29 June 1998 on the consultation of the ECB by

the authorities of the Member States on draft legislative provisions, as the legislative proposal

contains  provisions  concerning  currency  matters.  In  accordance  with  Article  17.5,  first

sentence, of the Rules of Procedure of the European Central Bank, this ECB Opinion has been

adopted by the Governing Council of the ECB.

3. 

The Draft Law is purported to amend Law 46/1998 on the introduction of the euro (hereinafter

“Law 46/1998”). Law 46/1998 deals with the introduction of the euro and therefore concerns

currency  matters  which  fall  within  the  consultative  competence  of  the  ECB  under  the

aforementioned provisions. The ECB has already given its opinion at the request of the Spanish

Ministry  of  Economy  and  Finance  on  the  Law  46/1998  on  21  July  1998  (CON/98/31)

(hereinafter the “Opinion on Law 46/1998”). The Draft Law now submitted is equally subject

to the opinion of the ECB for the same reasons that applied to the Law 46/1998 that it modifies.

This opinion must be read in the light of Opinion on Law 46/1998. 

4. 

The  amendments  proposed  by  the  Draft  Law  concern  (i)  the  shortening  of  the  period  during

which  banknotes  and  coins  denominated  in  national  currency  units  shall  remain  legal  tender

after  the  transitional  period,  as  defined  by  Article  1  of  Council  Regulation  974/98  of  3  May
1998  on  the  introduction  of  the  euro  (hereinafter  the  “Council  Regulation”),1  and  their

replacement by euro banknotes and coins (Articles  1,  2  and  3  of  the  Draft  Law);  and  (ii)  the

1 OJ L 139, 11.5.1998, p. 1-5.

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empowering of the Ministry of Economy and Finance to adopt all necessary measures regarding

both the front-loading of euro banknotes and coins and the optimal implementation of the Law

46/1998 concerning the period of exchange (Article 4 of the Draft Law).

5. 

Article  1  of  the  Draft  Law  modifies  Article  2,  paragraph  2  of  Law  46/98  reducing  to  two

months  after  the  end  of  the  transitional  period  the  time  during  which  banknotes  and  coins

denominated in pesetas may circulate simultaneously as legal tender with banknotes and coins

denominated in euro, that is, until 28 February 2000 (as opposed to the previous 6 months – i.e.

until 30 June 2002). Article 2 of the Draft Law gives a new wording to paragraph 1 of Article

24 of Law 46/98  in  order  to  ensure  that  banknotes  and  coins  denominated  in  pesetas  may  be

exchanged against euro banknotes and coins until 30 June 2002, free of charge and according to

the  conversion  rates,  at  the  Banco  de  España  and  at  Credit  Institutions  as  defined  under

paragraph  2  of  Article  24  of  Law  46/98.  In  so  far  as  the  exchange  after  1  July  2002  is

concerned, Article 3 of the Draft Law modifies Article 25 of Law 46/1998. This new provision

maintains  the  obligation  of  Banco  de  España,  with  the  exclusion  of  credit  institutions,  to

exchange banknotes and coins denominated in national currency units against euro banknotes

and  coins  after  the  aforementioned  date  and  provides  that  such  exchange  will  be  done  in

accordance with the general rounding rules contained in Article 11 of Law 46/1998.

6. 

Finally, Article 4 of the Draft Law adds two new indents to the Second Final Article of Law

46/1998  which  empower  the  Minister  of  Economy  (i)  to  enact  all  rules  necessary  for  the

frontloading of limited quantities of banknotes and coins before 1 January 2002 with the aim of

facilitating the transition to the new currency; and (ii) to enact all necessary rules to ensure the

best implementation of the provisions of Law 46/1998 concerning the period of exchange.

7. 

The  Draft  Law  constitutes  the  exercise  by  the  Kingdom  of  Spain  of  its  prerogative  under
paragraph 1 of Article 15 of the Council Regulation,2 to decide on a shortening of the period

when banknotes and coins denominated in national currency units may circulate as legal tender

in  its  national  territory  after  the  end  of  the  transitional  period  as  defined  in  Article  1  of  the

Council Regulation. As such, the ECB welcomes the proposed amendments as they are in line

with  the  initiatives  adopted  by  all  other  participating  Member  States  and  since  they  will

contribute to an earlier general circulation of the new euro banknotes and coins. The assessment

is therefore positive, and no major inconsistencies or problems are to be mentioned. The ECB

would, however, like to note that as the proposed amendments stand, credit institutions referred

to  under    paragraph  2  of  Article  24  of  Law  46/1998,  will  remain  under  the  obligation  to

exchange banknotes and coins denominated in pesetas against euro banknotes and coins, free of

2  Paragraph  1  of  Article  15  of  Council  Regulation  reads:  “Banknotes  and  coins  denominated  in  a  national
currency unit as referred to in Article 6(1) shall remain legal tender within their territorial limits until six months
after the end of the transitional period at the latest; this period may be shortened by national law”

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charge, until 30 June 2002, even though banknotes and coins denominated in pesetas will cease

to be legal tender as from 28 February 2002. This solution is very much appreciated by the ECB

as it guarantees citizens and undertakings a reasonable period to effectuate the exchange.

8. 

In relation to the article 4 of the Draft Law, in view of the possibility that the decision-making

bodies  of  the  ESCB  adopt  rules  concerning  some  aspects  of  the  frontloading  exercise  by

National Central Banks and in order to guarantee consistency between the actions of all public

actors involved, the ECB recommends the addition of a sentence in the proposed new indent c)

of  Second  Final  Article  of  Law  46/1998  to  the  effect  that,  when  adopting  the  necessary

measures  to  ensure  the  frontloading  of  banknotes  denominated  in  euro,  the  Minister  of

Economy should act consistently with the acts adopted by the Banco de España in the exercise

of its role within the ESCB.

9. 

Finally,  the  ECB  requests  that  it  be  consulted  with  respect  to  any  royal  decree  and/or

ministerial  order  to  be  enacted  pursuant  to  the  Law  46/1998,  as  eventually  amended  by  the

proposed Draft law.

10.  The ECB confirms that it has no objection to the publication of this opinion at the discretion of

the consulting authority.

Done at Frankfurt am Main on 5 October 2000.

The President of the ECB

[signed]

Willem F. Duisenberg