Recommendation for a COUNCIL DECISION on arrangements for the renegotiation of the Monetary Agreement with the Principality of Monaco
Date: 2011-01-31
Institutions: European Commission
Subjects: Monaco, euro, financial legislation, fraud

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EUROPEAN COMMISSION 

Brussels, 31.1.2011 
COM(2011) 23 final 

Recommendation for a 

COUNCIL DECISION 

on arrangements for the renegotiation of the Monetary Agreement with the Principality 
of Monaco 

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EXPLANATORY MEMORANDUM 

The  Monetary  Agreements  were  concluded  between  the  European  Union  and  Monaco,  San 
Marino  and  Vatican  in  order  to  give  legal  continuity  to  the  arrangements  which  existed 
between  these  countries  on  the  one  hand  and  France  and  Italy  on  the  other  before  the 
introduction of the euro.  

Ten years after the euro replaced the legacy currencies of Italy and France used by Monaco, 
San Marino and Vatican, the Council invited the Commission to review the functioning of the 
Monetary  Agreements1.  The  results  of  the  assessment  were  adopted  in  the  'Commission 
Communication  on  the  functioning  of  the  Monetary  Agreements  with  Monaco,  San  Marino 
and Vatican'2.  

The  Commission  concluded  that  the  Monetary  Agreements  in  their  present  form  need  to  be 
amended  with  a  view  to  ensuring  a  more  consistent  approach  in  the  relations  between  the 
Union and the countries having signed the Agreements. On this basis, the Council adopted on 
16  October  2009  two  decisions  mandating  the  European  Commission  and  the  Republic  of 
Italy to renegotiate the existing agreements. A new Monetary Agreement was concluded with 
the Vatican City State on 17 December 20093, while the discussions with the Republic of San 
Marino are still ongoing.  

The  present  draft  Recommendation  for  a  Council  Decision  defines  the  arrangements  for 
renegotiation of the Agreement with the Principality of Monaco. 

While  an  important  number  of  changes  were  needed  in  the  agreements  concluded  with 
Vatican and San Marino, the scope of the renegotiation of the Monetary Agreement with the 
Principality of Monaco should be much more limited since the Principality of Monaco already 
applies  all  relevant  Union  banking  and  financial  legislation.  The  Commission  proposes 
therefore to seek the amendment of the following provisions:  

•  Ceiling for the issuance of euro coins 

For historical reasons, the ceilings for maximum yearly issuance of Monaco, San Marino and 
Vatican were fixed in two different ways (Monaco is currently authorised to issue a maximum 
of 1/500th of the quantity of coins minted in France while Vatican and San Marino had/have 
fixed quotas) leading to very different results. 

With  a  view  to  ensuring  fair  treatment  to  all  countries  with  the  Monetary  Agreements,  the 
Commission has proposed to introduce a new uniform method for calculating the ceilings of 
euro coins issuance, to be also used in all Agreements. The Commission had also proposed to 
increase  the  ceilings  of  issuance  of  the  countries  having  signed  the  Monetary  Agreements 
with  a  view  to  allowing  some  circulation  of  their  coins.  Coins  minted  in  low  quantities  are 
very demanded by coin collectors. As a consequence, the coins are not serving their original 
purpose of a payment instrument but are solely kept as collectors' items. 

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Council  Conclusions  on  'Common  guidelines  for  the  national  sides  and  the  issuance  of  euro  coins 
intended for circulation', 2922nd ECOFIN Council meeting of 10 February 2009. 
COM (2009)359 of 14 July 2009 
OJ C 28, 4.2.2010, p. 13–18 

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In  line  with  the  new  agreement  with  Vatican  and  with  the  one  being  negotiated  with  San 
Marino, the new ceilings for Monaco would be composed of a fixed and a variable part: 

(1) 

(2) 

The  fixed  part  should  aim  at  covering  the  demand  of  coin  collectors.  According  to 
common estimates, a total value of around EUR 2340000 should be sufficient to cover 
the demand of the collectors' market.  

The variable part would be based, in the case of Monaco, on the average per capita 
issuance of France. The average number of coins per capita issued in France in year  
n-1 would be multiplied by the number of inhabitants of the Principality of Monaco.  

•  Election of jurisdiction 

The present Monetary Agreements have not given the Union any leverage in the event that the 
countries having signed the Monetary Agreements do not fulfil their obligations (e.g. do not 
transpose the relevant Union legislation in due time), apart from the ultimate – and therefore 
unlikely - possibility to withdraw unilaterally from the Agreement. The Commission therefore 
proposes to elect the Court of Justice of the European Union as the jurisdiction responsible 
for settling disputes which may arise from the application of the Monetary Agreements. 

•  Form of the agreement 

The form of the Monetary Agreement should be adjusted. 

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Recommendation for a 

COUNCIL DECISION 

on the arrangements for the renegotiation of the Monetary Agreement with the 
Principality of Monaco 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 219(3) thereof, 

Having regard to the recommendation from the Commission4, 

Having regard to the opinion of the European Central Bank5, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

The Union has the competence for monetary and exchange rate matters as of the date 
of the introduction of the euro; 

The Council should determine the arrangements for the negotiation and conclusion of 
agreements concerning monetary or foreign exchange regime matter. 

The  French  Republic,  on  behalf  of  the  European  Community,  concluded  on  26 
December 2001 a Monetary Agreement with the Principality of Monaco. 

France  has  long  standing  monetary  links  with the Principality of Monaco, which are 
reflected  in  various  legal  instruments.  The  financial  institutions  located  in  the 
Principality of Monaco have the right to access the refinancing facilities of the Banque 
de  France  and  they  participate  in  some  French  payment  systems  under  the  same 
conditions as French banks. 

The Council concluded on 10 February 2009 that the Commission should review the 
functioning of the existing agreements and consider possible increases in the ceilings 
for coin issuance. 

The  Commission  concluded  in  the  'Communication  on  the  functioning  of  the 
Monetary  Agreements  with  Monaco,  San  Marino  and  Vatican'6  that  the  Monetary 
Agreement with the Principality of Monaco in its present form needs to be amended 
with a view to ensuring a more consistent approach in the relations between the Union 
and the Countries having signed a monetary agreement. 

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OJ C , , p. . 
OJ C , , p. . 
COM(2009)359 

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(7) 

The Monetary Agreement with Monaco should therefore be renegotiated with a view 
to  adjusting  the  ceiling  for  the  issuance  of  coins,  electing  a  jurisdiction  for  possible 
dispute settlement and adjusting the format of the Agreement to the new common one. 
The  current  Agreement  should  be  maintained  until  a  new  Agreement  is  concluded 
between the parties. 

HAS ADOPTED THIS DECISION:  

Article 1 

The French Republic shall notify the Principality of Monaco of the need to amend the existing 
Monetary Agreement between the French Republic, on behalf of the European Union, and the 
Principality  of  Monaco  at  the  earliest  possible  date  and  offer  renegotiation  on  the  relevant 
provisions of the Agreement.  

The  Union  shall  seek  the  following  changes  in  the  renegotiation  of  the  Agreement  with  the 
Principality of Monaco: 

Article 2 

(a) 

(b) 

(c) 

The  Agreement  shall  be  concluded  between  the  Union,  represented  by  the 
French  Republic  and  the  European  Commission,  and  the  Principality  of 
Monaco.  

The method for determining the ceiling of issuance of Monaco euro coins shall 
be  revised.  The  new  ceiling  shall  be  calculated  using  a  method  which  will 
combine  a  fixed  part  aimed  at  avoiding  excessive  numismatic  speculation  on 
Monaco  coins  by  satisfying  the  demand  of  the  collector  coin  market  and  a 
variable part, calculated as the average per capita coin issuance of France in the 
year n-1 multiplied by the number of inhabitants of Monaco. Without prejudice 
to  the  issuance  of  collector  coins,  the  Agreement  shall  set  the  minimum 
proportion of Monaco euro coins to be introduced at face value at 80%.  

The  Court  of  Justice  of  the  European  Union  shall  be  elected  as  the  body  in 
charge  of  settling  disputes  which  may  arise  from  the  application  of  the 
Agreement.  If  the  Union  or  Monaco  consider  that  the  other  Party  has  not 
fulfilled an obligation under the Monetary Agreement, it may bring the matter 
before the Court of Justice. The judgment of the Court shall be binding on the 
Parties,  which  will  take  the  necessary  measures  to  comply  with  the  judgment 
within a period to be decided by the Court in its judgment. In case the Union or 
Monaco  fail  to  take  the  necessary  measures  to  comply  with  the  judgment 
within the period, the other Party can terminate immediately the Agreement. 

(d) 

The format of the Agreement shall be adjusted. 

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Article 3 

The negotiations with the Principality of Monaco shall be conducted by the French Republic 
and  the  Commission  on  behalf  of  the  Union.  The  European  Central  Bank  shall  be  fully 
associated  with  the  negotiations  and  agree  on  issues  falling  in  its  field  of  competence.  The 
French Republic and the Commission shall submit the draft agreement to the Economic and 
Financial Committee for opinion. 

Article 4 

The  French  Republic  and  the  Commission  shall  be  entitled  to  conclude  the  agreement  on 
behalf  of  the  Union,  unless  the  Economic  and  Financial  Committee  or  the  ECB  is  of  the 
opinion that the agreement should be submitted to the Council. 

This Decision is addressed to the French Republic, the Commission and the ECB. 

Done at Brussels,  

For the Council 
The President 

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