Opinion of the European Central Bank of 13 December 2002 at the request of the Italian Ministry for the Economy and Finance on a draft provision of the 2003 Budget Law on banknotes and coins (CON/2002/31)
Date: 2002-12-31
Institutions: European Central Bank
Subjects: Italy, issuing of currency, monetary integration, money, national law

EN

OPINION OF THE EUROPEAN CENTRAL BANK

of 13 December 2002

at the request of the Italian Ministry for the Economy and Finance on a draft provision of

the 2003 Budget Law on banknotes and coins 

(CON/2002/31)

1. 

On  6  December  2002  the  European  Central  Bank  (ECB)  received  a  request  from  the  Italian

Ministry for the Economy and Finance for an opinion on a draft provision of the 2003 Budget Law

on banknotes and coins (hereinafter the ‘draft provision’).

2. 

The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing

the European Community, Article 4 of the Statute of the European System of Central Banks and of

the  European  Central  Bank  and  the  first  and  third  indents  of  Article  2(1)  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,  since  the  draft  provision  concerns  currency

matters and the Banca d’Italia. In accordance with the first sentence of Article 17.5 of the Rules of

Procedure  of  the  European  Central  Bank,  the  Governing  Council  of  the  ECB  has  adopted  this

opinion.

3. 

The  first  paragraph  of  the  draft  provision  amends  Article  3  of  Law  No  96  of  7  April  1997  and

Article 52b of Legislative Decree No 213 of 24 June 1998, by inserting a new paragraph into each

according to which banknotes and coins denominated in lira, respectively, can be converted  into

euro at all branches of the Banca d’Italia within ten years of the date on which they cease to be

legal  tender.  In  addition,  the  new  provision  to  be  inserted  into  the  Legislative  Decree  would

confirm the terms currently prescribed for the lapse of the right of conversion by Article 3(1) of

Law  No  96/1997  and  Article  52b(1)  of  Legislative  Decree  213/98,  also  for  the  purposes  of  the

conversion into euro at the Banca d’Italia’s branches.

4. 

As regards the timing of the lapse of the right of conversion of banknotes and coins denominated

in  lira  into  euro,  the  ECB  notes  that  Article  16  of  Council  Regulation  (EC)  No  974/98  of
3 May 1998 on the introduction of the euro2 states that the issuers of banknotes and coins of the

Member  States  shall  continue  to  accept,  against  euro  at  the  conversion  rate,  the  banknotes  and

coins previously issued  by  them  ‘in  accordance  with  the  laws  or  practices’  of  each  participating

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2 

OJ L 189, 3.7.1998, p. 42.
OJ L 139, 11.5.1998, p. 1.

                                                     
Member State. The draft provision now expressly clarifies that the ordinary terms for the lapse of

the right of conversion to legal tender under Italian law for banknotes and coins denominated in

lira also apply for the purposes of the conversion into euro at the Banca d’Italia’s branches. The

ECB welcome this provision as it enhances legal clarity.

5. 

As regards coins, the ECB notes that the draft provision has regard to the possibility provided for

by Article 11 of Regulation (EC) No 974/98, according to which ‘[e]xcept for the issuing authority

and  for  those  persons  specifically  designated  by  the  national  legislation  of  the  issuing  Member

State,  no  party  shall  be  obliged  to  accept  more  than  50  coins  in  any  single  payment’,  and

designates for the purpose of the unlimited conversion of coins denominated in lira into euro the

Banca d’Italia. 

6. 

The second paragraph of the draft provision deals  with the payment by the Banca d’Italia  to  the

Government  of  the  value  of  banknotes  denominated  in  lira  that  have  been  withdrawn  from

circulation and which, 10 years after their withdrawal, still have not been submitted for exchange.

The  draft  provision  envisages  the  following:  by  31  January  2003,  the  Ministry  for  the  Economy

and Finance and the Banca d’Italia will make an evaluation of the banknotes denominated in lira

that,  according  to  their  forecasts,  will  be  not  submitted  for  exchange  by  28  February  2012.  The

estimated  total  value  will  be  paid  by  the  Banca  d’Italia  to  the  Government  according  to  the

following timetable: 65% will be paid by 28 February 2003; up to 25% by 31 January 2008 having

regard to the trend of reimbursements; and the residual value of the banknotes denominated in lira

that have not by then been submitted for exchange by 31 March 2012. The ECB has no objection

to this provision.

7. 

It is understood that under Article 8(1) of Legislative Decree No 43 of 10 March 1998 the Banca

d’Italia is empowered to draw up its financial statements in compliance with any decisions taken

by the ECB in accordance with Article 26.4 of the Statute. The envisaged treatment of banknotes

denominated in lira is  compliant  with  Guideline  ECB/2002/10  of  5  December  2002  on  the  legal

framework  for  accounting  and  financial  reporting  in  the  European  System  of  Central  Banks,

according  to  which  the  ‘banknotes  in  circulation  figure’  shall  exclude,  as  of  1 January 2003,

banknotes denominated in national currency units. The ECB notes that for statistical purposes such

national banknotes will also be excluded from ‘currency in circulation’ as from the same date.

8. 

The draft provision states that if the actual value of banknotes denominated in lira to be converted

into  euro  exceeds  the  estimated  value,  the  Banca  d’Italia  shall  convert  the  excess  value  using

holdings on the Treasury’s account referred to in Article 4 of Law No 483 of 26 November 1993.

The ECB welcomes the draft provision in so far as it limits possible central bank financing of the

Government  by  the  Banca  d’Italia.  The  ECB  notes  that  an  additional  safeguard  is  provided  by

Article  5  of  Law  No  483/93,  which  obliges  the  Treasury  to  cover  any  shortfalls  on  its  deposit

account.

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9. 

This opinion will be published on the ECB’s website.

Done at Frankfurt am Main on 13 December 2002.

The President of the ECB

[signed]

Willem F. DUISENBERG

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