Opinion of the European Central Bank of 1 February 2002 at the request of the Irish Department of Finance on a draft amendment to the Economic and Monetary Union Act 1998 (CON/2002/7)
Date: 2002-02-01
Institutions: European Central Bank
Subjects: Ireland, central bank, foreign-exchange reserves, money, national law

OPINION OF THE EUROPEAN CENTRAL BANK

of 1 February 2002

at the request of the Irish Department of Finance on a draft amendment to the Economic and

Monetary Union Act 1998 

(CON/2002/7)

1.

On  11  January  2002  the  European  Central  Bank  (ECB)  received  a  request  from  the  Irish

Department  of  Finance  for  an  ECB  opinion  on  a  draft  amendment  to  the  Economic  and

Monetary  Union  Act  1998.  On  25  January  2002  the  ECB  received  an  updated  draft  of  the

amendment.

2. 

The  ECB’s  competence 

to  deliver  an  opinion 

is  based  on  Article 2  of  Council

Decision 98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by

national  authorities  regarding  draft  legislative  provisions1,  as  the  draft  amendment  contains

provisions concerning a national central bank and currency matters. 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 draft amendment makes provision for the payment into the Irish Government’s Exchequer

by  the  Central  Bank  of  Ireland  (CBI),  at  the  direction  of  the  Minister  for  Finance,  of  (a) the

accrued  amount  of  the  proceeds  of  the  issue  of  coin  paid  into  the  CBI’s  general  fund  and

carried therein to the credit of the CBI’s currency reserve under various legislative enactments,

plus (b) the accrued amount of the proceeds of the melting down of coins carried to the credit of

the  CBI’s  currency  reserve,  less  (c)  the  accrued  amount  of  sums  required  for  the  provision,

issuance and redemption of coin, which are defrayed out of the CBI’s general fund and debited

therein to the CBI’s currency reserve under such enactments. The amounts to be paid into the

Exchequer  would  be  calculated  in  a  manner  determined  by  the  Minster  for  Finance,  after

consultation with the CBI. The draft amendment also takes account of the possibility that the

net income from the issue of coin might be less than the sum required to be defrayed out of the

CBI’s  general  fund  and  debited  therein  to  its  currency  reserve  in  respect  of  the  provision  of

coins or in respect of the redemption of coins (including euro coins circulating in Ireland and

issued by other Member States), in which case the Minister for Finance would be required to

advance the balance to the CBI’s general fund.

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OJ L 189, 3.7.1998, p. 42.

                                                          
4. 

The ECB notes that the effect of this amendment would be to remove from the CBI’s balance

sheet that portion of its capital and reserves that is currently represented by the cumulative net

proceeds to date from the issue of coin, which accounted for over 20% of the total capital and

reserves  (excluding  revaluation  account  balances)  reflected  on  the  balance  sheet  as  at

31 December 2000, as well as the net proceeds from the issue of coin in the future. The ECB

notes that this change in the balance sheet treatment of coins issued by the Minister for Finance

is consistent with the accounting treatment of euro coins issued by other participating Member

States in accordance with Article 106 of the Treaty. It is understood that the proceeds will be

applied  towards  the  funding  of  the  Irish  Government’s  required  contribution  to  the  Irish

National  Pension  Reserve  Fund.  In  principle,  the  ECB  has  no  objections  to  this  particular

amendment. 

5. 

The  ECB  confirms  that  it  has  no  objection  to  the  competent  national  authorities  making  this

opinion publicly available at their discretion.

Done at Frankfurt am Main on 1 February 2002.

The President of the ECB

[signed]

Willem F. DUISENBERG

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