Exchange rate matters and monetary agreements with the euro area

SUMMARY OF:

Decision 98/683/EC — exchange rate matters relating to the CFA Franc and the Comorian Franc

Decision 98/744/EC — exchange rate matters relating to the Cape Verde escudo

Decision 1999/95/EC — the monetary arrangements in the French territorial communities of Saint-Pierre-et-Miquelon and Mayotte

Decision 1999/96/EC — the position to be taken by the Community regarding an agreement concerning the monetary relations with the Principality of Monaco

Decision 1999/97/EC — the position to be taken by the Community regarding an agreement concerning the monetary relations with the Republic of San Marino

Decision 1999/98/EC — the position to be taken by the Community regarding an agreement concerning the monetary relations with Vatican City

Decision 2004/548/EC — the position to be taken by the Community regarding an agreement concerning the monetary relations with the Principality of Andorra

Decision 2004/750/EC — the opening of the negotiations on an agreement concerning monetary relations with the Principality of Andorra

Monetary agreement between the EU and the Vatican City State

Monetary agreement between the EU and Andorra

Monetary agreement between the EU and San Marino

Monetary agreement between the EU and Monaco

WHAT IS THE AIM OF DECISIONS AND THE AGREEMENTS?

• With the arrival of the euro on 1 January 1999, it was necessary for the European Union (EU) to redefine monetary relations with countries and territories which had previously used the French franc and the Portuguese escudo.
• Similarly, a new monetary footing needed to be established with EU neighbours, such as Monaco, San Marino and the Vatican. These had no national currency of their own, but used those of countries which subsequently adopted the euro.

KEY POINTS

The new arrangements are set out in the following agreements:

• 1.

  Exchange rate matters

  • France was able to continue its agreements with the West African Economic and Monetary Union, the Communauté économique et monétaire de l'Afrique centrale and the Comoros. These guaranteed the exchange of CFA (Communauté Financière Africaine) and Comorian francs into the French franc at a fixed rate for as long as the French franc continued to exist.
  • Portugal was able to continue its agreement with Cape Verde. This ensured exchange rate stability between the two countries’ currencies and allowed for financial and technical assistance from Portugal until the escudo ceased to exist.
  • France and Portugal had to inform the European Commission, the European Central Bank (ECB) and the Economic and Financial Committee of any developments that could affect monetary and exchange-rate policies.
• 2.

  Monetary arrangements

  • The French territories of Saint-Pierre-et-Miquelon, close to Canada’s eastern coast, and Mayotte in the Indian Ocean, neither of which are part of the EU, replace the French franc with the euro. They were allowed to use banknotes and coins in francs until 30 June 2002.
• 3.

  Monetary relations

  • Monaco, San Marino and the Vatican signed monetary agreements with the EU before the introduction of euro banknotes and coins in 2002. These have been renegotiated to correct some shortcomings. They authorise the 3 countries to use the euro as their official currency. They must:
    • not issue any euro notes or coins unless the agreement allows this;
    • comply with EU rules on euro notes and coins, copyright and exchange of damaged notes;
    • protect euro notes and coins against counterfeiting.
  • The agreements allow each of the 3 countries to issue a limited number of euro coins:
    • Monaco (an annual volume of 1/500th of the quantity of coins minted in France);
    • San Marino (a maximum annual face value of €1,944,000);
    • the Vatican (maximum annual face value of €1 million).
  • Andorra asked on 15 July 2003 for a monetary agreement with the EU. This was concluded on 30 June 2011, enabling the country to use the euro as its official currency and, from July 2013, to issue its own euro coins.

FROM WHEN DO THE DECISION AND THE AGREEMENTS APPLY?

• 1 January 1999 for the CFA franc, the French franc (Saint-Pierre-et-Miquelon and Mayotte), the Comorian franc and the Cape Verde escudo.
• 1 January 2010: the Vatican — this agreement replaced a previous monetary agreement concluded in 2000 between the European Community, represented by Italy in association with the Commission and the ECB, and the Vatican City State.
• 1 December 2011: Monaco — this agreement replaced an agreement concluded in 2001 by France, in association with the Commission and the ECB.
• 1 April 2012: Andorra.
• 1 September 2012: San Marino — this agreement replaced a previous agreement between Italy, on behalf of the European Community, and San Marino.

BACKGROUND

For more information, see:

• The euro outside the euro area (European Commission).

MAIN DOCUMENTS

Council Decision 98/683/EC of 23 November 1998 concerning exchange rate matters relating to the CFA Franc and the Comorian Franc (OJ L 320, 28.11.1998, pp. 58–59).

Successive amendments to Decision 98/683/EC have been incorporated into the original text. This consolidated version is of documentary value only.

Council Decision 98/744/EC of 21 December 1998 concerning exchange rate matters relating to the Cape Verde escudo (OJ L 358, 31.12.1998, pp. 111–112).

Council Decision 1999/95/EC of 31 December 1998 concerning the monetary arrangements in the French territorial communities of Saint-Pierre-et-Miquelon and Mayotte (OJ L 30, 4.2.1999, pp. 29–30).

Council Decision 1996/96/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 (OJ L 30, 4.2.1999, pp. 31–32).

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 (OJ L 30, 4.2.1999, pp. 33–34).

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 (OJ L 30, 4.2.1999, pp. 35–36).

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 (OJ L 244, 16.7.2004, pp. 47–49).

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 (OJ L 332, 6.11.2004, p. 15).

Monetary Agreement between the European Union and the Vatican City State (OJ C 28, 4.2.2010, pp. 13–18).

See consolidated version.

Monetary Agreement between the European Union and the Principality of Andorra (OJ C 369, 17.12.2011, pp. 1–13).

See consolidated version.

Monetary Agreement between the European Union and the Republic of San Marino (OJ C 121, 26.4.2012, pp. 5–17).

See consolidated version.

Monetary Agreement between the European Union and the Principality of Monaco (OJ C 310, 13.10.2012, pp. 1–11).

See consolidated version.

last update 26.08.2021