Agreements on monetary relations (Monaco, San Marino, the Vatican and Andorra)
With the introduction of the euro, it was necessary to redefine monetary relations with neighbouring countries which had no national currency but which used the former national currencies of Member States of the euro zone, such as Monaco, San Marino and the Vatican. Monetary agreements were drawn up setting out the conditions under which these countries would be permitted to use the euro. They were also allowed to mint a certain number of euro coins, which are now sought after by collectors. In 2003 Andorra also requested that a monetary agreement of this type be concluded.
Council Decision 1999/96/EC of 31 December 1998 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Principality of Monaco.
Council Decision 1999/97/EC of 31 December 1998 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Republic of San Marino.
Council Decision 1999/98/EC of 31 December 1998 on the position to be taken by the Community regarding an agreement concerning the monetary relations with Vatican City.
Council Decision 2003/738/EC of 7 October 2003 on the adoption of amendments to be made to the Monetary Agreement between the Italian Republic and the Vatican City State.
Council Decision 2004/548/EC of 11 May 2004 on the position to be taken by the Community regarding an agreement concerning the monetary relations with the Principality of Andorra.
Council Decision 2004/750/EC of 21 October 2004 on the opening of the negotiations on an agreement concerning monetary relations with the Principality of Andorra.
SITUATION BEFORE THE INTRODUCTION OF THE EURO
France has particular monetary links with Monaco which are based on various legal instruments and whereby, before the introduction of the euro, notes and coins issued by France were legal tender in Monaco. Coins issued by Monaco were legal tender only there. Monaco does not have a currency or central bank of its own.
Financial institutions located in Monaco had access to - but had never used - the refinancing facilities of the Banque de France under the same conditions as French banks. They also participated in certain French payment systems on the same terms. Similarly, they are subject to the same minimum reserve and statistical reporting requirements. They are also supervised by the competent French authorities.
Italy has concluded several agreements with San Marino containing provisions on monetary matters to the effect that notes and coins issued by Italy were legal tender in San Marino. With the exception of gold coins, coins issued by San Marino had the same shape, size and composition as coins circulating in Italy. The agreements limited the number of such coins that could be issued; these coins were legal tender in San Marino and in Italy. San Marino has undertaken not to issue any notes, coins or monetary surrogates of any kind. It does not have a currency or central bank of its own even though the Instituto di Credito Sammarinese performs functions similar to those of a central bank.
Financial institutions located in San Marino do not have access to the refinancing facilities of the Bank of Italy. Only one of them participates in Italy's real-time gross settlement system (RTGS).
Italy also has particular monetary links with the Vatican that are based on an agreement whereby coins issued by Italy were legal tender in the Vatican. Notes issued by the Bank of Italy were not legal tender but, in practice, circulated on Vatican territory. Coins other than gold coins issued by the Vatican had the same shape, size and composition as coins circulating in Italy. The agreement limited the number of such coins that could be issued; these were legal tender in the Vatican and in Italy. The Vatican does not have a currency or central bank of its own.
Financial institutions located in the Vatican do not have access to the refinancing facilities of the Bank of Italy or to Italy's national real-time gross settlement system. They are not subject to supervision by the Italian authorities.
GENERAL PROVISIONS OF THE COUNCIL DECISIONS
On 1 January 1999 the euro became the currency of France and of Italy. The European System of Central Banks (ESCB) is responsible for formulating monetary policy. In their present form, the agreements are not compatible with the allocation of competence laid down in the Maastricht Treaty for monetary and exchange-rate matters. New agreements must, therefore, be concluded between the Community, Monaco, San Marino and the Vatican.
These decisions stipulate that Monaco, San Marino and the Vatican could be authorised, subject to an agreement with the Community, to use the euro as their official currency.
They must undertake not to issue any notes, coins or monetary surrogates unless this is expressly provided for in the agreement.
Monaco, San Marino and the Vatican must comply with the Community rules governing euro notes and coins and, in particular, copyright, the exchange of damaged notes and the reproduction of notes and coins. They must also cooperate with the Community in protecting euro notes and coins against counterfeiting.
The Community may authorise financial institutions located in Monaco, San Marino and the Vatican to have access to some or all of the national payment systems in France and Italy. Such a decision can be taken only with the consent of the European Central Bank (ECB).
France and Italy are conducting the negotiations and will conclude the agreements in accordance with Article 111(3) of the EC Treaty.
France and Italy will submit the draft agreement to the Economic and Financial Committee for its opinion. If the Commission or the ECB, each of which will be fully associated with the negotiations, or the Economic and Financial Committee considers that the agreement must be submitted to the Council, the agreement will be concluded only once the Council has taken a decision in accordance with Article 111(3) of the EC Treaty.
Any bilateral agreement must be compatible not only with the allocation of competence laid down in the Maastricht Treaty for monetary and exchange-rate matters but also with the agreements already concluded between the Community and Monaco, San Marino and the Vatican.
This decision authorises Italy to amend the Monetary Convention concluded between the Italian Republic and the Vatican and to raise the total face value of the euro coins which the Vatican is allowed to issue each year to EUR 1 000 000 (from EUR 670 000).
On 15 July 2003 Andorra formally requested the conclusion of a monetary agreement with the Community that would allow it to officially grant the euro legal-tender status and to issue banknotes, coins and collector coins.
Before the introduction of the euro, French and Spanish banknotes and coins were used as a quasi-official currency without having legal-tender status. They were replaced by the euro in 2002. In its decision of 11 May 2004, the Council adopted the position to be taken in the negotiations which the Commission will conduct on behalf of the Community.
The Commission formally recommended the opening of negotiations on 9 August 2004 since all the conditions had been met. Firstly, the Agreement providing for measures equivalent to those laid down in Council Directive 2003/48/EC on taxation of savings income in the form of interest payments was signed in Brussels on 1 July 2004. Secondly, Andorra notified the Commission in writing of its intention to ratify this Agreement before 30 April 2005.
On 21 October 2004, the Council adopted a decision stating that the necessary conditions for the opening of the negotiations with the Principality of Andorra have been fulfilled. The European Commission informed Andorra of the Community's readiness to conclude an agreement on monetary matters and proposed negotiations for such an agreement.
|Act||Entry into force - Date of expiry||Deadline for transposition in the Member States||Official Journal|
|Decision 1999/96/EC||31.12.1998||-||OJ L 30 of 4.2.1999|
|Decision 1999/97/EC||31.12.1998||-||OJ L 30 of 4.2.1999|
|Decision 1999/98/EC||31.12.1998||-||OJ L 30 of 4.2.1999|
|Decision 2003/738/EC||7.10.2003||-||OJ L 267 of 17.10.2003|
|Decision 2004/548/EC||11.5.2004||-||OJ L 244 of 16.7.2004|
|Decision 2004/750/EC||6.11.2004||-||OJ L 332 of 6.11.2004|