31.12.98 Official Journal of the European Communities L 358/111 COUNCIL DECISION of 21 December 1998 concerning exchange rate matters relating to the Cape Verde escudo (98/744/EC) THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 109(3) thereof, Having regard to the recommendation from the Commis- sion, Having regard to the opinion of the European Central Bank (%), (1)  Whereas according to Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (°), the euro will be substituted as from 1 January 1999 for the currency of each participating Member State at the conversion rate; (2)  Whereas the Community will have the competence for monetary and exchange rate matters in the Member States adopting the euro as from the same date; (3)  Whereas the Council decides the arrangements for the negotiation and conclusion of agreements concerning monetary or foreign exchange regime matters; (40 Whereas the Portuguese Republic has concluded an agreement with the Republic of Cape Verde (%) which is intended to ensure the convertibility of the Cape Verde escudo into the Portuguese escudo at a fixed parity; ) Whereas the euro will be substituted for the Portu- guese escudo on 1 January 1999; (6)  Whereas the convertibility of the Cape Verde escudo is ensured by a limited credit facility provided by the Portuguese government; whereas the Portuguese government has given the assurance that the agreement with Cape Verde has no substantial financial implications for Portugal; (7)  Whereas this agreement is unlikely to have any material effect on the monetary and exchange rate policy of the euro area; whereas in its present form and state of implementation this agreement there- fore is unlikely to present any obstacle to a smooth (") Opinion delivered on 17. 12. 1998 (not yet published in the Official Journal). ® OJ L 139, 11. 5. 1998, p. 1. (°) Acordo de cooperacdo cambial entre a Republica Portuguesa e a Republica de Cabo Verde. (Decreto n? 24/98 de 15 de Julho 1998). (11 (12) (13) functioning of Economic and Monetary Union; whereas nothing in this agreement can be construed as implying an obligation for the ECB or any NCB to support the convertibility of the Cape Verde escudo; whereas modifications to the existing agreement shall not lead to any obligation for the ECB or any NCB; Whereas Portugal and Cape Verde are willing to continue the present agreement after the substitu- tion of the euro for the Portuguese escudo; whereas it is appropriate that Portugal may continue the present agreement after this substitution and that Portugal and Cape Verde implement it under their sole responsibility; Whereas it is necessary for the Community to be informed on a regular basis about the implementa- tion and envisaged modifications of the agreement; Whereas the modification or implementation of this agreement should be without prejudice to the primary objective of the Community’s exchange rate policy to maintain price stability, in accord- ance with Article 3a(2) of the Treaty; Whereas it is necessary to involve the competent Community bodies before making any changes to the nature or scope of the present agreement; whereas this applies in particular to the principle of free convertibility at a fixed parity between the euro and the Cape Verde escudo, convertibility being ensured by a limited credit facility provided by the Portuguese government; Whereas without prejudice to Community compet- ence and Community agreements as regards economic and monetary union, Member States may negotiate in international bodies and conclude international agreements; Whereas this Decision does not establish a prece- dent with respect to any arrangements that may be decided in the future with respect to the nego- tiation and conclusion of similar agreements concerning monetary or foreign exchange regime matters by the Community with other States or international organisations,