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dossier	COM(2020)658 - Amendment of the Council Decision of 23 November 1998 concerning exchange rate matters relating to the CFA franc and the ...
document	COM(2020)658
date	October 20, 2020

(1) The Union has exclusive competence for monetary and exchange rate matters in the Member States whose currency is the euro. Where the Treaties confer on the Union an exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts, the Member States being able to do so themselves only if so empowered by the Union.

(2) Pursuant to Article 219(3) of the Treaty, the Council is to determine the appropriate arrangements for the negotiation and conclusion of agreements concerning monetary or foreign exchange regime matters.

(3) Before the introduction of the euro, France had concluded several agreements with the UEMOA (Union économique et monétaire ouest-africaine), the CEMAC (Communauté économique et monétaire de l’Afrique Centrale) and the Comores, which were intended to guarantee the convertibility of the CFA and Comorian francs into the French franc at a fixed parity( ² ). Upon the substitution of the euro for the French franc on 1 January 1999, the Council authorised France to continue such existing agreements (“present agreements”) concerning exchange rate matters with the UEMOA, the CEMAC and the Comores pursuant to the framework laid down in the Decision of the Council of 23 November 1998 (98/683/EC) (“the Council Decision”)( ³ ).

(4) Pursuant to Articles 4 and 5 of Decision 98/683/EC, France may negotiate and conclude modifications to the existing agreements, which either maintain or change the nature or scope of the existing agreements.

(5) France and the States of the UEMOA are in the process of replacing their existing agreement of 4 December 1973 by a new cooperation agreement concerning exchange rate matters. That agreement was signed on 21 December 2019. It is accompanied by a new guarantee agreement to be concluded with the Central Bank of the States of the UEMOA. On 22 May 2020 the French Government put forward a bill to the National Assembly to ratify the new cooperation agreement.

(6) The replacement of existing agreements concerning exchange rate matters between France, the UEMOA, CEMAC and Comores, as France and the UEMOA currently intend to achieve, is not covered by Articles 4 and 5 of Decision 98/683/EC. This is the case even if the nature and scope of such new cooperation agreements remains unchanged, namely to ensure a convertiblity between the euro and the currencies of the UEMOA, CEMAC and the Comores at a fixed parity supported by a budgetary commitment from France.

(7) France should be empowered to replace the agreements in force with UEMOA, CEMAC and the Comores. In line with Council Decision 98/683/EC, the different existing procedures should continue to apply depending on whether the replacement affects or does not affect the nature or scope of these agreements. In both cases, it will be necessary to involve the competent Union bodies in accordance with the existing information sharing and approval regime, as the case may be, before replacing the agreements with subsequent agreements.

(8) Decision 98/683/EC should therefore be amended accordingly.