Opinion of the European Central Bank of 3 May 2001 at the request of the Council of the European Union on a Commission proposal for a Council regulation establishing a facility providing medium-term financial assistance for Member States' balances of payments — CON/2001/8
Date: 2001-05-03
Institutions: European Central Bank
Subjects: EU Member State, European Central Bank, balance of payments, short-term monetary support, support mechanism

C 151/18

EN

Official Journal of the European Communities

22.5.2001

EUROPEAN CENTRAL BANK

OPINION OF THE EUROPEAN CENTRAL BANK

of 3 May 2001

at the request of the Council of the European Union on a Commission proposal for a Council
regulation establishing a facility providing medium-term financial assistance for Member States’
balances of payments

CON/2001/8

(2001/C 151/05)

from the Council of

1. On 29 March 2001 the European Central Bank (ECB)
the European
received a request
Union for an opinion on a proposal for a Council regulation
establishing a facility providing medium-term financial
assistance for Member States’ balances of payments (here-
inafter
the (cid:145)proposed Regulation(cid:146)). The
proposed Regulation would replace Council Regulation
(EEC) No 1969/88 of 24 June 1988 establishing a single
facility providing medium-term financial assistance for
Member States’ balances of payments (1).

referred to as

the dissolution of the European Monetary Cooperation Fund
at the start of the second stage of economic and monetary
union, the tasks of the European Monetary Cooperation
Fund, including the administration of the loans, were trans-
ferred to the European Monetary Institute (EMI). Pursuant to
Article 123(2) of the Treaty, the ECB subsequently took over
the administration of the loans from the EMI. The adminis-
tration of such loans is in conformity with Article 21.2 of
the Statute, which states that the ECB may act as a fiscal
agent
including Community insti-
tutions or bodies.

for specified entities,

the Protocol on the Statute of

2. The ECB’s competence to deliver an opinion is based on
Article 105(4) of
the Treaty establishing the European
Community (hereinafter referred to as the (cid:145)Treaty(cid:146)) and
Article 4(a) of
the
European System of Central Banks and of the European
Central Bank (hereinafter referred to as the (cid:145)Statute(cid:146)) since
the ECB is currently competent by virtue of Regulation
(EEC) No 1969/88 and various Treaty provisions, as
described below,
to administer the loans which are the
object of the proposed Regulation. In accordance with the
first sentence of Article 17.5 of the Rules of Procedure of
the European Central Bank, this opinion has been adopted
by the Governing Council of the ECB.

3. The ECB takes note of the reduction of the outstanding
amount of
loans to be granted under the facility from
EUR 16 billion to EUR 12 billion in view of the reduced
from such
number of Member States eligible to benefit
the single currency.
loans following the introduction of
The ECB assumes that in determining the amount of this
reduction, the fact that a larger number of Member States
will be in a position to benefit from the facility once current
applicant countries have become members of the European
Union has also been taken into account.

4. Article 11 of Regulation (EEC) No 1969/88 provides for the
the medium-term
administration of
financial assistance facility by the European Monetary Coop-
eration Fund. Pursuant to Article 117(2) of the Treaty, upon

loans under

the

(1) OJ L 178, 8.7.1988, p. 1.

the

the

since

regard,

In this

introduction of

following. First, administration of

5. The ECB notes that the proposed Regulation would transfer
the administration of
these loans from the ECB to the
European Commission.
the ECB would
the
point out
medium-term financial assistance facility and previous
facilities of
this type has traditionally been carried out
within the central bank framework. This has been the
the Community loan
case
mechanism in 1975 (which was merged with the
medium-term financial assistance mechanism into the
single medium-term financial assistance facility for balance
of payments support in 1988) and has served to emphasise
the distinction between loans provided for balance of
payments assistance and Community loans serving other
purposes. Secondly, as
the
proposed Regulation,
link between the
medium-term financial assistance facility and the very
short-term financing facility of the ERM II Agreement in
so far as loans under the medium-term financial assistance
facility may be granted as a consolidation of support made
available by the ECB under the very short-term financing
facility.

indicated in Article 6 of

there is a direct

the Council were to decide in favour of

6. In view of the above, the ECB considers that it would be
appropriate for the ECB to continue the administration of
loans under the medium-term financial assistance facility. If,
the
however,
proposal to transfer the administration of these loans to
the Commission, the ECB would still need to be kept at
all times fully informed as concerns payments carried out
under the facility as well as the receipt and status of any
requests for new loans. The need to be kept informed would
arise in particular
the granting of
medium-term financial assistance as a consolidation of
support given under the ERM II Agreement very short-term
financing facility.

in the context of

22.5.2001

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Official Journal of the European Communities

C 151/19

7. The ECB takes note of

the possibility granted to the
Commission in Article 1(2) in fine of the proposed Regu-
lation to enter into debt and/or interest-rate swaps designed
to transform the loans it may contract on the capital
markets or with financial institutions to finance the loans
granted under the medium-term financial assistance facility.

8. The second sentence of Article 11 of Regulation (EEC) No
1969/88 provides that (cid:145)The funds shall be paid only for the
purposes indicated in Article 1(cid:146). The ECB notes that the
equivalent Article (Article 10) of the proposed Regulation
does not contain such a provision. With a view to ensuring
maximum legal clarity, the ECB proposes to insert the text
already used in Article 11 of Regulation (EEC) No 1969/88

by adding the following at the end of Article 10: (cid:145)The funds
shall be paid only for the purposes indicated in Article 1(cid:146).

9. This opinion shall be published in the Official Journal of the

European Communities.

Done at Frankfurt am Main on 3 May 2001.

The President of the ECB

Willem F. DUISENBERG