Ministerie van Financien




De Voorzitter van de Tweede Kamer der Staten-Generaal Plein 2 2511 CR DEN HAAG

Uw brief van/kenmerk Ons kenmerk Den Haag

BGW 99/0175


Standpunt ECB en Europese Commissie inzake bevoorrading publiek met euro-munten en biljetten

vóór 1 januari 2002

Bijgaand doe ik u de standpunten van de ECB en de Europese Commissie toekomen inzake bevoorrading van het publiek met euro-munten en biljetten vóór 1 januari 2002 (pagina 2 onderaan van persbericht ECB van 7 januari 1999; brief Commissiaris De Silguy van 18 januari 1999). Volgens de ECB en de Europese Commissie zou het verstrekken van euro-munten en biljetten aan het publiek voor 1 januari 2002 praktisch neerkomen op het in circulatie brengen van euro-munten en biljetten. Dit is in strijd met art 10 en 11van EU-verordening 974/98.


Bijlagen: 2

inlichtingen: Eric Ligthart · Telefoon: 070-342 7000 · Fax: 070-342 7986 . Postbus 20201, 2500 EE Den Haag Bezoekadres: Korte Voorhout 7, Den Haag


Membre de la Commission européene


Brussels, 18 January 1999

Dear Gerrit,

Thank you very much for your letter dated 21 December 1998 relating to legal aspects of frontloading of euro to the public before 1 January 2002.

Firstly, I would like to confirm that the European Commission gives the highest priority to the smooth and successful introduction of the euro coins and notes. It has been working for several months on the preparation of the so-called phase C, starting on 1 January 2002, in close relation with the European Central Bank, the national co-ordinators responsible for the changeover of public administrations to the euro and representatives of many other organisations, including retailers. The work has concentrated mainly on the frontloading issue, notably regarding the earliest possible date for the beginning of front-loading and the identification of the categories of recipients that could or should be front-loaded.

As regards the legal basis, the relevant provisions can be found in Council regulation 974/98 of 3 May 1998 (Articles 10 and 11):

~ As from 1 January 2002, the ECB and the central banks of the participating Member States shall put into circulation banknotes denominated in euro (Article 10J.»

~As from 1 January 2002, the pafficipating Member States shad issue coins denominated in euro orin cent...(Article 11).@

The wording of the two articles (~put into circulation~ and «issue~) is only different because it was felt desirable to leave open the question of who issues banknotes within the ESCB- either the national central banks or the ECB or both.

In the opinion of the Commission and the European Central Bank, frontloading coins and notes to the general public before 1 January 2002 would not be legally acceptable because it would be equal in practice to putting them into circulation before the date fixed by the EC legislator.

Mr Gerrit ZALM

Minister of Finance

Korte Voorhout 7


Moreover, the Commission considers that both the earliest delivery date end target groups of any sort of frontloading should be common to all participating Member States in order to avoid competitive distortions.

However, regarding target groups other than the general public, the Commission encourages all techniques end measureS enabling retailers to give change in euro notes end coins from the very beginning of 2002, in order to keep phase C as short as possible. It would be a positive signal if most retailers could give change in euros as of 1 January, end therefore receive starter kits of coins end notes some days in advance.

Provided that appropriate contractual end practica! measures are taken, the Commission shares the view that the above mentioned legal problem would not arise if frontloading was extended to retailers, as long as the buying side - the customers - would not be given the physical possibility to use coins end notes as a means of payment.

Sincerely yours.

l l


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ECB PItESS CONFERENCE Thursday, 7 January 1999 Pagina I van 3


Thursday, 7 January 1999

The President's introductory statement

Ladies end genflemen, the Vice-President end I are here today to report on the outcome of the first meeting of the Governing Council of the European Central Bank in Stage Three of Economic end Monetary Union. For the first time, the Governing Council took decisions of an operational nature in me context of the single monetary policy.

On I January 1999 the euro was successfully launched. From that day onwards, the "Eurosystem" - that is, the ECB end the Bleven national central banks of the Member States that participate in the euro - has assumed responsibility for the conduct of monetary policy in the euro area with the primary objective of maintaining price stability.

The Goveming Council today expressed its satisfaction with the changeover to one integrated euro area money market in the initial days. Money market interest rate differentiaes across countries were significant only in the first few hours of 4 January 1999, teut narrowed quickly thereafter, indicating that credit institutions were eff~ciently using arbitrage possibilities within the single money market.

As you will recall, the Governing Council of the ECB decided at its previous meeting fllat the corridor established by the interest rates on the Eurosystem's standing facilities would, as a transihonal measure, be kept narrow. This was achieved by setting the marginal lending rak end the deposit rate at 3.25% end 2.75% respectively, for the period of 4-21 January 1999. We observed a relatively large recourse by credit institutions to these facilities in the first few days of Stage Three. To some extent, this is not surprising since the spread between the Eurosystem's marginal lending facility end the ovemight money market rate has been reladvely small. As we noted after our last meeting, the measure of a narrow corridor is aimed at facilitating the transition to the new regime by market participants. However, we also noted then that over a longer period of time, such a measure would hamper the development of an efficienfly functioning euro area money market. We therefore confimm our intention to temminate this transitional measure following the next meeting of the Goveming Council on 21 January 1999.

On 22 December 1998 the interest rate on the first main refinancing operation ofthe Eurosystem was set at 3.0%, with the intention to maintain this level for the foreseeable future. This first operafion of the Eurosystem was successfully setfled today. The decision on the amount of liquidity allocated to the banking system (EUR 75 billion) is aimed at providing sufficient liquidity to allow credit institutions, on aggregate, to neutralise their reserve deficit relatively soon within the first reserve maintenance period. It was taken on the basis of the liquidity conditions in the whole euro area money market, while paying due attention to the uncertainties related to the phasing-in of the new system.

Let me now tum to the Goveming Council's discussion on recent monetary, financial end economie developments end the decisions that the Governing Council has taken today in the field of monetary policy.

At today's meeting, the Goveming Council reviewed the latest data. The new pieces of infommation have not altered in any significant way the ouflook for price developments. The Goveming Council therefore decided that for the main refinancing operations to be announced on 11 end 18 January 1999 the same conditions will apply as for the first one, i.e. they will be fixed rate tenders conducted at an interest rate of 3.0%. A separate nress release has already been issued on these ECB interest rate decisions at 6.15 p.m. today.

Furthemmore, I should like to recall that the first longer-term refinancing operation will be announced on 12 January 1999 end settled on 14 January 1999. It will be conducted as a variable rate tender, using the single rate auction procedure.

Let me report in some more detail on the Goveming Council's regular assessment of monetary, financial end economie conditions, end thereby provide the explanations for our decisions of today.

On 30 December 1998 we released to the public the first of the monthly statements on recent monetary developments in the euro area. The 12-month growth rate of the broad moneta~ aggregate M3 decreased from 5.0% in October to 4.5% in November 1998. The latest three-month moving average of M3 growth (covering the months September to November 1998) was approximately 4.7%. This result was similar to the value estimated for the three-month period of August to October 1998 (which was revised upwards from the figure of 4.5% published on 14 December 1998) end remains very close to the reference value of 4 1/2% set by the Goveming Council on I December 1998.

With respect to the broadly based outloolfor price developments and risks to price stability, financial market developments may be seen as indicating a favourable assessment of the recent monetary policy decisions of the Eurosystem, signalling that financial market participants expect the environment of price stability to continue. In this connection, I could mention the t`all in long-term interest rates in the last couple of days to new historica! lows

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ECB PRESS CONFERENCE Thursday, 7 January 1999... Pagina 2 van 3

and also theyield curve has shitted down.

No major news has come in on the outlook for the euro area economy since we met last time. Hence, we continue to face uncertainties originating from the evolution of the world economy in 1999, which are reflected in a weakening of industrial conf dence in the euro area ova recent months. AISO, euro area real GDP growth in the third quarter weakened when compared with the first half of 1998. On me other hand, consumer conf dence remained high until late 1998. This mixed picture is also reflected in other indicators. Order books and capacity utilisation point to a less optimistic outlook while retail sales and the recent pattern in employment and unemployment suggest more favourable trends. In genera!, this pattem of mixed evidence appears to characterise the economie situation in the euro area around the tum of the year end we shall continue to carefully monitor developments.

With respect to the latest data on the Harmonised Index of Consumer Prices, the annual increase for November 1998 showed a further slowdown to 0.9%, compared with 1.0% in the two previous months. This development was m fine with previous trends, i.e. it was mainly due to lower annual percentage charges in the prices of food end a further reduction in energy prices. On balance, the general environment continues to suggest that there is no significant upward or downward pressure on prices in the short temm. The pattem of risks to price stability has remained broadly unchanged. On the one hand, downward pressures could materialise if import or producer prices were to fall further, while, on the other, wage developments would become a matter of concem if wage increases were higher than expected. In addition, any relaxation of fiscal policies would negatively affect the price climate as welf as the credibility of the Stability end Growth Pact.

In conclusion, taking into account the latest evidence available, the Goveming Council has not altered its assessment regarding the outlook for price developments. This is why, as I already menboned, the Goveming Council decided that for the two forthcoming main refinancing operations the same conditions will apply as for the first one, i.e. they will be fixed rate tenders conducted at an interest rate of 3.0%. We also confimm our intention to maintain this rate for the foreseeable future.

I should now like to infomm you about the Goveming Council's review of the changeover to the Buro.

First end foremost, I am happy to be in a posifion to report that, overall, the transition to the euro within the Eurosystem end the banking end financial industry has been accomplished to our satisfaction. With regard to the changeover weekend itselt; the ECB infommed you, by means of a first press release issued in the evening of 3 January 1999, that there had been no reports of any incidents that would have impaired the smooth start of the system. With regard to the first experiences of our operational existence, let me focus in particular on the perfommance of the TARGET system.

Overall, during the first days of operation, the TARGET system has functioned welf. TARGET has contributed substantially to the integration of the euro money market end it has made possible the consolidation of the treasury management of institutions with different activity centres throughout Europe. TARGET has handled more cross-border payments than anticipated in these early days of Monetary Union end, in doing so, has demonstrated its processing capacities.

The problems which are being experienced in this initial period can be regarded as "teething troubles"; after au, it is completely nommal for operators - both in commercial banks end at the central bank level - to need some time to adept to the system end to the new euro environment. In this respect, it is worth noting that more than 5,000 credit institutions are currently participating directly in TARGET.

The value of cross-border transactions settled through TARGET already exceeded EUR 310 billion on the second operating day end this figure does not yet include domestic RTGS transactions, which themselves accounted for at least another EUR 660 billion. The total value of transactions settled was therefore almost EUR 1,000 billion.

In addition to the news conceming TARGET, the ECB also infommed you, by means of a press release on 5 January 1999, that its first refinancing operation - announced on 4 January 1999 - was completed successfully. Also here, the Goveming Council obviously recognised that a learning process is still under way. The Goveming Council will continue studying the best ways to adept the liquidity provision to the changing conditions of this initial period.

As a final point, as indicated at our press conference on 22 December 1998, the Goveming Council today revisited the issue of front-loading euro banknotes end coins.

The Goveming Council holds the view that front-loading of euro banknotes end coins to the general public is

excluded by Articles l0 end l l of Council Regulation (EC) 974/98 on the introduction of the Buro, since it would

have the same effect as issuing or putting them into circulation.

However, front-loading of euro banknotes and coins is considered legally possible to credit institutions and

security carriers as welf as to other organisations (e.g. retailers end vending companies) ft; teut only ff, legal or

contractual arrangements can be put in place in each national legal system in order to ensure that euro banknotes

and coins will

ECB - European Central Bank

ECB PRESS CONFERENCE Thursday, 7 January 1999 Pagina 3 van 3

not be put into circulation prior to I January 2002.

We stand ready to answer any questions you may have.

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Deel: ' Standpunt ECB en EC inzake bevoorrading euro '

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