WRITTEN QUESTION No. 684/98 by Umberto BOSSI to the Council. The Banca d'Italia's gold and the Italian public sector borrowing requirement
2. 10. 98 EN Official Journal of the European Communities C 304/145 distinction between structural and temporary measures. In doing so, the Commission has watched over the transparency and the accuracy of the accounting systems of all Member States. Concerning the specific operation to which the present question refers, the Commission has already analysed its nature and determined its appropriate accounting treatment in terms of the system of integrated accounts ESA 79í. In particular, in its decision No 5/98 of 27 January 1998 Eurostat has decided to treat this payment as a financial transaction which has no effect on the measurement of the government deficit as defined for the purposes of the excessive deficit procedureí. In other words, this operation will not reduce the deficit in the definition which is relevant for access to European monetary union (EMU), that is, the general government net borrowing. The Commission will present an assessment of the sustainability of the Italian budgetary position, as well as that of other Member States, in its report on convergence, in accordance with Article 109j(1) EC Treaty to be released by 25 March 1998. (98/C 304/216) WRITTEN QUESTION E-0684/98 by Umberto Bossi (NI) to the Council (16 March 1998) Subject: The Banca díItaliaís gold and the Italian public sector borrowing requirement The circumstances surrounding the sale of gold belonging to the Banca díItalia to the Ufficio Italiano Cambi (UIC, the Italian Foreign Exchange Office) is only the latest in a long series of scandals which have shown Italy in the undignified role of desperately attempting to meet the Maastricht criteria. A document recently approved in Brussels by the Commission, to the effect that the Council will look into this case and that Eurostat is in the process of investigating the matter to ascertain the nature of the transaction in question, notes that in 1974, to protect the lira against attacks by speculators, the Banca díItalia obtained a US $ 2 billion loan from the Bundesbank. The UIC purchased 543 tonnes of gold from the Banca díItalia to underwrite the loan. The loan was paid off in September 1978, but the gold remained on the UICís balance sheet. It was revalued over the years, but the corresponding capital gains were never taxed because, under Italian tax law, capital gains are not subject to tax until they are realized. In July 1997 the UIC -which, by the way, was in the process of being wound up- sold the gold back to the Banca díItalia. That operation generated a capital gain of c. Lit 7600 billion, and hence the requirement to pay Lit 4000 billion in tax, part of which (Lit 3 400 billion) was paid in November 1997. Consequently the sum of Lit 3400 billion was credited to the public exchequer and duly entered against the public sector deficit, which proved to have been kept down to 2. 7% of GDP by the end of 1997, in other words well below the crucial 3% ceiling set by the Maastricht criteria. Does the Council intend to finally ascertain the nature of this transaction? Does the Council intend to establish whether it is permissible to encourage tax revenues of this kind to be offset against the public sector deficit? If not, does the Council not consider that this incident shows yet again that Italy has not changed its ways and is prepared to stoop to dubious accounting practices in order to enter Europe? Answer (8 June 1998) On the basis of the convergence reports presented by the Commission and the European Monetary Institute, and in the light of the favourable Opinion delivered by the European Parliament, on 2 May 1998 the Council, meeting at the level of Heads of State or Government, took the view that eleven Member States, including Italy, fulfilled the necessary conditions for the adoption of the single currency. The Councilís assessment took account of all relevant factors and in particular evaluated the sustainability of the Italian governmentís financial position