Opinion of the European Central Bank of 13 February 2004 at the request of the French Ministry of Economic Affairs, Finance and Industry on a draft article of a Finance Law (CON/2004/6)
Date: 2004-02-13
Institutions: European Central Bank
Subjects: France, foreign-exchange reserves, gold, gold-exchange standard, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 13 February 2004 

at the request of the French Ministry of Economic Affairs, Finance and Industry 

on a draft article of a Finance Law 

(CON/2004/6) 

1. 

On  29  December  2003  the  European  Central  Bank  (ECB)  received  a  request  from  the  French 

Ministry  of  Economic  Affairs,  Finance  and  Industry  for  an  opinion  on  a  draft  article  to  be 

incorporated  in  a  Finance  Law  (hereinafter  the  "draft  article").  On  19  January  2004,  the  French 

authorities communicated the wording of the draft article to the ECB. 

2. 

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

Treaty establishing the European Community, the second indent of Article 4(a) of the Statute of the 

European System of Central Banks and of the European Central Bank, and on the third indent 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,  as  the  draft  article 

concerns a guarantee in respect of exchange losses granted by the French State to the Banque de 

France.  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. 

In the context of managing the State’s exchange reserves in gold and foreign currencies with which 

it  is  entrusted  by  Article  L.  141-2  of  the  Monetary  and  Financial  Code,  the  Banque  de  France 

enjoys  a  State  guarantee  in  respect  of  the  exchange  losses  it  could  suffer  if  the  State’s  foreign 

currencies  revaluation  reserves  and  the  State’s  gold  revaluation  reserves  are  insufficient. 

Article 2(2) of the Agreement of 31 March 1999 between the State and the Banque de France on 

the  management  and  accounting  of  the  State’s  exchange  reserves,  as  amended  (hereinafter  the 

“Agreement”), expressly provides for this guarantee as follows: “in the event that the State’s gold 

revaluation  reserves  are  insufficient,  the  losses  shall  be  covered  by  Treasury  support  before 

settlement of the Banque de France’s accounts”. 

4. 

The draft article provides that “the State shall be authorised, within the meaning of Article 61 of 

Organic Law No 2001-692 of 1 August 2001 on Financial Acts, to cover exchange losses suffered 

by the Banque de France under the conditions laid down in Article L. 141-2 of the Monetary and 

Financial Code as provided by the Agreement of 31 March 1999 as amended between the State and 

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OJ L 189, 3.7.1998, p. 42. 

 
 
 
                                                      
the  Banque  de  France”.  The  ECB  understands  that  the  concept  of  “exchange  losses”  in  the  draft 

article covers the first and second paragraphs of Article 2 of the Agreement which refer to reserves 

in foreign currencies and reserves in gold.  

5. 

The  ECB  notes  that  the  inventory  of  the  guarantees  to  be  expressly  authorised  by  the  French 

Parliament in a finance law, in accordance with Article 61 of the Organic Law, aims to raise the 

French  Parliament’s  awareness  of  the  State’s  obligations  “off  balance  sheet”  and  to  contribute  to 

the  desired  increase  in  transparency  of  public  finances.  The  ECB  welcomes  this  legitimate 

objective of the French authorities. The EMI observed in its Opinion CON/98/12 of 13 March 1998 

on the Statute of the Banque de France that “the Banque de France’s activities (…) are governed by 

the Treaty and by the Statute as well as the legal acts adopted by the ECB in this respect. Whilst it 

is assumed that the above Agreement leaves the Bank every freedom not to accept any procedures 

which might infringe on ESCB-related obligations, references to national rules, which may hinder 

the Bank's independence and status as an integral part of the ESCB, must be deleted if the above 

procedures could have such an effect (…)”. The ECB understands that the present arrangement will 

not raise any concern in this respect. 

6. 

The  ECB  would  appreciate  receiving  for  prior  examination  any  subsequent  amendments  to  the 

draft article, and being informed of any substantial change to the Agreement. 

7. 

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

opinion publicly available at their discretion. This opinion will be published on the ECB’s website 

six months after the date of its adoption. 

Done at Frankfurt am Main on 13 February 2004. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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