EC COMMISSION VIEWS ON GOLD IN INTRA-EC SETTLEMENTS
1. SUMMARY. EC COMMISSION OFFICIALS HAVE TOLD US THE COMMISSION DOES NOT
INTEND TO MAKE ANY PROPOSALS TO THE EC COUNCIL CONCERNING THE PRICE OF
GOLD IN TRANSACTIONS BETWEEN EC CENTRAL BANKS, AND THAT IT DOES NOT
BELIEVE THE TIME IS RIPE TO MAKE ANY LIMITED OFFICIAL USE JUDGMENT ON THE CRITERIA FOR AN EVENTUAL INCREASE IN THE PRICE OF
MONETARY GOLD. AT THE SAME TIME, THE COMMISSION ADMITS THAT GOLD IS
BEING DISCUSSED IN THE MONETARY AND CENTRAL BANK GOVERNORS COMMITTEES.
WELL- PLACED COMMISSION SOURCES HAVE TOLD US, MOREOVER, THAT THERE IS
STRONG THOUGH MINORITY SUPPORT WITHIN THE COMMISSION FOR THE INCLUSION
OF GOLD IN INTRA-EC SETTLEMENTS AT A HIGHER PRICE. THIS WOULD CONSTITUTE
A POLITICAL GESTURE WHICH, AS EC COMMISSION VICE PRESIDENT HAFERKAMP
TOLD A PRESS CONFERENCE ON NOVEMBER 16, WOULD ENABLE THE COMMUNITY TO
ASSERT ITS OWN PERSONALI- TY. END SUMMARY...
2. THE EC COMMISSION'S DISINCLINATION TO TAKE ANY
INITIATIVE ON THE GOLD PRICE ISSUE ACTUALLY APPEARED
IN WRITING ON NOVEMBER 14 IN RESPONSE TO A EUROPEAN
PARLIAMENTARIAN'S QUESTION AS TO WHETHER OR NOT THE
COMMISSION WAS COMPETENT TO PROPOSE A NEW AND MORE
REALISTIC PRICE OF GOLD FOR INTRA-EC TRANSACTIONS. IN
REPLY, THE COMMISSION STATEMENT NOTED THAT THE POWER
OF DECISION IN FIXING THE PRICE OF GOLD WAS DETERMINED
BY ARTICLE IV, SECTION 7, OF THE IMF ARTICLES OF
AGREEMENT AS AMENDED ON JULY 29, 1969, THE AMENDED TEXT
STIPULATING THAT THE FUND CAN, BY AN ABSOLUTE MAJORITY
OF 85 PERCENT, CHANGE IN UNIFORM PROPORTION THE PARITY
OF THE CURRENCIES OF THE MEMBER STATES. THE COMMISSION
STATEMENT FURTHER NOTED THAT THE QUESTION OF GOLD WAS
CURRENTLY BEING DISCUSSED BY THE C-20 ON WHICH
SIX OF THE MEMBER STATES AND A COMMISSION OBSERVER WERE
REPRESENTED.
3. EC COMMISSION OFFICIALS HAVE CONFIRMED TO US THAT,
WHILE A HIGHER PRICE OF GOLD IS BEING DISCUSSED
WITHIN THE COMMISSION AS A WORKING HYPOTHESIS, THERE IS
NO INTENTION TO PRESS FOR A CHANGE IN PRICE IN
RESPECT TO INTRA-COMMUNITY TRANSACTIONS. THESE
OFFICIALS POINT OUT THAT THE COMMISSION'S PROPOSALS ON
RESERVE POOLING DO NOT REQUIRE A HIGHER GOLD PRICE
INASMUCH AS THEY PROVIDE THAT THE DISTRIBUTION OF ANY
INCREMENTAL VALUE ACCRUING TO THE EUROPEAN MONETARY
COOPERATION FUND AS THE RESULT OF AGREEMENT ON A NEW GOLD PRICE AT AN INTERNATIONAL LEVEL OR BETWEEN EC
CENTRAL BANKS WILL BE MADE IN UNITS OF ACCOUNT IN PRO-
PORTION TO EACH CENTRAL BANK'S GOLD CONTRIBUTIONS.
THUS, GOLD COULD BE PAID TO THE FUND AT THE CURRENT
OFFICIAL PRICE. THESE OFFICIALS FURTHER NOTE THAT IF
INTRA-EC GOLD TRANSACTIONS DID TAKE PLACE AT A HIGHER
PRICE, TECHNICAL PROBLEMS WOULD ARISE WITH RESPECT TO
THE UNIT OF ACCOUNT (WHICH IS DEFINED IN GRAMS OF
GOLD), THE COMMON AGRICULTURE POLICY, AND MEMBER STATE
CONTRIBUTIONS TO THE EC BUDGET, WHICH ARE STILL CALCU-
LATED IN PRE-SMITHSONIAN PARITIES. THE COMMISSION
HAS NOT YET TACKLED THESE TECHNICAL PROBLEMS.
4. SOME OF THE DISCUSSION WITHIN THE COMMISSION ON A
HIGHER GOLD PRICE WITHIN THE EC TURNS ON THE TECHNICAL
ARGUMENT OF WHETHER OR NOT THIS STEP WOULD FACILITATE
THE USE OF GOLD IN INTRA-COMMUNITY TRANSACTIONS.
SO FAR, GOLD HAS BEEN EFFECTIVELY NEUTRALIZED. AS A
RESULT OF THE IMF'S DECISION ON NOVEMBER 4 TO SUSPEND
FOR 120 DAYS THE EQUAL VALUE PRINCIPLE, COMMISSION
OFFICIALS NOW SAY IT WILL BE POSSIBLE FOR MEMBER STATES
TO TRANSFER AMONG THEMSELVES BOTH SDRS AND FUND
POSITIONS. THIS MEANS THAT GOLD-RELATED ASSETS MAY NOW
BE USED IN INTRA-EC SETTLEMENTS. WE UNDERSTAND, MORE-
OVER, THAT THE FRENCH INTEND TO PAY OFF A DEBT TO THE
BUNDESBANK IN SUCH ASSETS. ALTHOUGH THIS NEW SITUATION
WOULD SEEM TO REMOVE ONE ARGUMENT IN THE COMMUNITY FOR
A HIGHER GOLD PRICE, THE POINT IS MADE THAT TRANSACTIONS
IN GOLD AS SUCH (AS DISTINCT FROM GOLD-RELATED ASSETS)
ARE STILL EFFECTIVELY BLOCKED AND THAT A MEMBER STATE
MIGHT HAVE INSUFFICIENT GOLD-RELATED ASSETS TO COVER
ITS DEBTS IN ACCORDANCE WITH THE COMPOSITION OF ITS
RESERVES.
5. WHILE IT THUS APPEARS REASONABLY CLEAR THE COMMIS-
SION HAS NO INTENTION AT THIS TIME TO TAKE ANY INITIATIVE
ON GOLD, AND THAT THE COMMISSION WILL ABIDE BY ARTICLE IV,
SECTION 2 OF THE IMF ARTICLES OF AGREEMENT (PROHIBITING GOLD
PURCHASES ABOVE PAR VALUE), SEVERAL RELIABLE EC CONTACTS
TELL US THERE IS NONETHELESS VOCAL MINORITY SUPPORT
WITHIN THE COMMISSION FOR AN INITIATIVE IN THE MATTER.
THE BEST EVIDENCE OF THIS ATTITUDE IS IN EC COMMISSION
VICE PRESIDENT HAFERKAMP'S STATEMENT TO THE PRESS IN
BRUSSELS ON NOVEMBER 16 THAT, SINCE THE TWO-TIER
MARKET HAS BEEN AT LEAST PARTIALLY ABANDONED, THE
COMMUNITY COULD AGREE ON A HIGHER OFFICIAL GOLD PRICE FOR TRANSACTIONS BETWEEN THEIR CENTRAL BANKS. SUCH A
DECISION, ACCORDING TO HAFERKAMP, WOULD BE A MEANS FOR
THE COMMUNITY TO ASSERT ITS OWN PERSONALITY. WHILE
IN HIS VIEW SUCH A STEP WAS NOT NECESSARY FOR THE
COMMUNITY TO BEGIN POOLING RESERVES, INCLUDING GOLD,
HE SAID THE QUESTION WOULD HAVE TO BE EXAMINED.
6. SUBSEQUENT TO HAFERKAMP'S PRESS CONFERENCE, COM-
MISSION OFFICIALS APPEARED TO BACK AWAY SOMEWHAT FROM
HIS DECLARATION BY SAYING THAT HE SIMPLY WANTED TO
BRUSH ASIDE ANY OBJECTIONS TO THE COMMISSION'S PROPOSALS
ON RESERVE POOLING THAT WERE BASED ON THE NOTION THAT
TERMINATION OF THE TWO-TIER GOLD MARKET HAD CREATED A
NEW SITUATION. THUS, THE COMMISSION'S PROPOSAL ON POOLING
AND THE FUNCTIONING OF THE EC MONETARY COOPERATION FUND
WOULD REMAIN VALID WHATEVER THE PRICE OF GOLD.
7. COMMISSION OFFICIALS HAVE TOLD US THERE IS IN FACT
A BODY OF OPINION WITHIN THE COMMISSION THAT SEES THE
QUESTION OF A HIGHER GOLD PRICE FOR INTRA-EC TRANSACTIONS
AS ESSENTIALLY A POLITICAL PROBLEM. NOW THAT CENTRAL
BANKS ARE FREE TO SELL GOLD AT THE MARKET PRICE, THEY
MAINTAIN THERE IS NO REASON NOT TO FACILITATE ITS USE
WITHIN THE COMMUNITY BY ESTABLISHING A MORE REALISTIC
PRICE. BELIEVING THAT SUCH A STEP IS SIMPLY A MATTER
OF COMMON SENSE, THEY FAIL TO SEE WHY THE COMMUNITY
SHOULD REFRAIN FROM TAKING IT SIMPLY BECAUSE
IT MIGHT DISPLEASE THE U.S. ON THE CONTRARY, THEY
CONSIDER THAT IT WOULD BE AN EXCELLENT OPPORTUNITY FOR
THE COMMUNITY TO ASSERT ITS OWN "MONETARY PERSONALITY."
A FURTHER ARGUMENT THEY CITE IS THAT A HIGHER GOLD PRICE
WOULD COUNTER THE POINT ADVANCED BY SOME MEMBER STATES
THAT THERE CAN BE NO RESERVE POOLING PENDING RESOLUTION
OF THE GOLD PRICE ISSUE IN INTRA-EC TRANSACTIONS,
ALTHOUGH IT IS ADMITTED THAT THESE MEMBER STATES
WOULD THEN PROBABLY ADVANCE SOME OTHER ARGUMENT AGAINST
RESERVE POOLING.
8. THESE OFFICIALS FURTHER ARGUE THAT SUCH A MOVE
NEED NOT COMPLICATE INTERNATIONAL MONETARY REFORM
NEGOTIATIONS, WHICH IN ANY CASE ARE LIKELY
LIMITED OFFICIAL USE EVENTUALLY TO LEAD TO A MORE REALISTIC PRICE FOR GOLD
IN TRANSACTIONS BETWEEN CENTRAL BANKS. THEY NOTE THAT
EVEN THE U.S. AGREES THAT GOLD WILL CONTINUE TO PLAY
A ROLE IN A NEW INTERNATIONAL MONETARY SYSTEM. THE
OFFICIALS HOLDING THESE VIEWS, HOWEVER, GRANT THAT THEY
ARE UNLIKELY TO PREVAIL BECAUSE THE COMMUNITY WILL NOT
HAVE THE COURAGE TO ACT.
9. IN SUM, THERE ARE AT THIS TIME TWO DISTINCT
VIEWS IN THE COMMISSION. A MINORITY VIEW HOLDS THAT NOW
IS THE TIME FOR THE COMMUNITY TO ASSERT ITSELF BY
DECLARING A NEW AND HIGHER GOLD PRICE IN INTRA-COMMUNITY
TRANSACTIONS. ON THE OTHER HAND, A MAJORITY OF COMMISSION
OFFICIALS STILL APPEAR TO BELIEVE THAT THE ISSUE IS
BEST RESOLVED THROUGH THE C-20 TALKS ON INTER-
NATIONAL MONETARY REFORM. MANY OF THESE OFFICIALS,
HOWEVER, SAY THAT IT IS PROBABLY REALISTIC TO EXPECT THAT
CENTRAL BANK GOLD TRANSACTIONS WILL EVENTUALLY HAVE TO
TAKE PLACE AT A HIGHER PRICE. GREENWALD
Source: https://www.wikileaks.org/plusd/cables/1973ECBRU06770_b.html
Summary: Timeline overview
Wednesday, April 10, 2013
Monetary gold wikileaks - 1974BRUSSE02610_b
1. SENIOR BELGIAN FINANCE MINISTRY OFFICIAL GAVE EMBOFF
APRIL 30 A COPY OF THE BELGIAN TEXT (IN FRENCH) OF THE
EEC FINMIN/CENTRAL BANKERS AGREEMENT REACHED AT ZEIST
APRIL 22-23. HE NOTED THAT
THERE WAS NO "OFFICIAL" TEXT OF THE AGREEMENT SINCE EACH DELEGATION MADE ITS OWN RECORD OF WHAT WAS AGREED UPON.
AT UK SUGGESTION, NO TIME WAS "WASTED" IN DRAFTING AN
AGREED TEXT.
2. ACCORDING TO BELGIAN TEXT, THE PROPOSAL AGREED UPON AT ZEIST WOULD ALLOW THE MEMBER CENTRAL BANKS TO BUY OR SELL GOLD FREELY AT "MARKET RELATED" PRICES. A MOVABLE BAND (E.G. A SNAKE) WOULD BE ESTABLISHED WITHIN WHICH CENTRAL BANKERS COULD NEGOTIATE SALES/PURCHASES BETWEEN THEMSELVES OR IN THE MARKET. ALTERNATIVELY, CENTRAL BANKS MIGHT BE ALLOWED TO SELL GOLD TO EUROPEAN MONETARY COOPERATION FUND (FECOM) FOR EUROPEAN UNITS OF ACCOUNT WHICH THE BANKS COULD THEN USE TO BUY EEC CURRENCIES FROM OTHER CENTRAL BANKS.
3. BELGIAN TEXT ALSO NOTES THAT "CERTAIN COUNTRIES" BELIEVE THAT NO OVERALL INCREASE IN GOLD STOCKS HELD BY MEMBER CENTRAL BANKS SHOULD BE PERMITTED IN THE SHORT OR MEDIUM TERM.
4. AFTER CONSULTATIONS IN WASHINGTON BETWEEN THE USG AND DUISENBERG/ZIJLSTRA NEXT WEEK, THE MEETING AGREED THAT THE G-20 DEPUTIES SHOULD BE BRIEFED IN PARIS MAY 7-9, THE EEC COUNCIL OF MINISTERS SHOULD BE BRIEFED ON MAY 20 AND THE MINISTERIAL G-20 SHOULD FURTHER DISCUSS THE MATTER IN WASHINGTON DURING JUNE.
5. IN COMMENTING TO EMBOFF ON THE TEXT, OUR SOURCE REMARKED THAT THE GOB ENVISIONS A QUITE WIDE BAND (SNAKE) WITH CENTRAL BANKS MEETING TO SET REVISIONS APPROXIMATELY ONCE A MONTH. HE ALSO FELT THAT THERE WILL NOT BE MANY TRANSACTIONS, EVEN IF THE SYSTEM IS IMPLEMENTED IN JUNE, EXCEPT THAT THE ITALIANS MAY BE MODERATE SELLERS FOR A WHILE.
6. THE BELGIAN MINISTRY FEELS THAT THE NEW SYSTEM COULD HELP DEMONETIZE GOLD BY (A) HAVING FECOM PRUDENTLY SELL OFF ITS GOLD ACQUISITIONS ON OPEN MARKET, (B) ENCOURAGING OIL-PRODUCING COUNTRIES TO BUY GOLD ONCE A DEEPER MARKET HAD BEEN CREATED AND/OR, (C) IMF MIGHT START EXCHANGING GOLD FOR SDR'S (REF B).
7. COMMENT: BELGIANS SEEM RELAXED ON THIS ISSUE FEELING THAT THEY ARE UNLIKELY TO BE EITHER BUYERS OR SELLERS OF GOLD IN THE SHORT OR MEDIUM TERM. THE GOB FEELS, HOWEVER, THAT THE ITALIANS HAVE A REAL CASE FOR SOME WAY BEING FOUND FOR ITALY TO UTILIZE ITS GOLD HOLDINGS. FURTHERMORE, SINCE THE FRENCH ARE IN A SIMILAR POSITION (I.E. HOLDING A RELATIVELY LARGE PART OF THEIR RESERVES IN GOLD), THE GOB HOPES THAT BY GIVING THE FRENCH A WAY TO MAKE THIS GOLD USEABLE IN INTERNATIONAL SETTLEMENTS, THIS WILL HELP BRING FRANCE BACK INTO THE EEC SNAKE. STRAUSZ-HUP
Source: https://www.wikileaks.org/plusd/cables/1974BRUSSE02610_b.html
Summary: Timeline overview
2. ACCORDING TO BELGIAN TEXT, THE PROPOSAL AGREED UPON AT ZEIST WOULD ALLOW THE MEMBER CENTRAL BANKS TO BUY OR SELL GOLD FREELY AT "MARKET RELATED" PRICES. A MOVABLE BAND (E.G. A SNAKE) WOULD BE ESTABLISHED WITHIN WHICH CENTRAL BANKERS COULD NEGOTIATE SALES/PURCHASES BETWEEN THEMSELVES OR IN THE MARKET. ALTERNATIVELY, CENTRAL BANKS MIGHT BE ALLOWED TO SELL GOLD TO EUROPEAN MONETARY COOPERATION FUND (FECOM) FOR EUROPEAN UNITS OF ACCOUNT WHICH THE BANKS COULD THEN USE TO BUY EEC CURRENCIES FROM OTHER CENTRAL BANKS.
3. BELGIAN TEXT ALSO NOTES THAT "CERTAIN COUNTRIES" BELIEVE THAT NO OVERALL INCREASE IN GOLD STOCKS HELD BY MEMBER CENTRAL BANKS SHOULD BE PERMITTED IN THE SHORT OR MEDIUM TERM.
4. AFTER CONSULTATIONS IN WASHINGTON BETWEEN THE USG AND DUISENBERG/ZIJLSTRA NEXT WEEK, THE MEETING AGREED THAT THE G-20 DEPUTIES SHOULD BE BRIEFED IN PARIS MAY 7-9, THE EEC COUNCIL OF MINISTERS SHOULD BE BRIEFED ON MAY 20 AND THE MINISTERIAL G-20 SHOULD FURTHER DISCUSS THE MATTER IN WASHINGTON DURING JUNE.
5. IN COMMENTING TO EMBOFF ON THE TEXT, OUR SOURCE REMARKED THAT THE GOB ENVISIONS A QUITE WIDE BAND (SNAKE) WITH CENTRAL BANKS MEETING TO SET REVISIONS APPROXIMATELY ONCE A MONTH. HE ALSO FELT THAT THERE WILL NOT BE MANY TRANSACTIONS, EVEN IF THE SYSTEM IS IMPLEMENTED IN JUNE, EXCEPT THAT THE ITALIANS MAY BE MODERATE SELLERS FOR A WHILE.
6. THE BELGIAN MINISTRY FEELS THAT THE NEW SYSTEM COULD HELP DEMONETIZE GOLD BY (A) HAVING FECOM PRUDENTLY SELL OFF ITS GOLD ACQUISITIONS ON OPEN MARKET, (B) ENCOURAGING OIL-PRODUCING COUNTRIES TO BUY GOLD ONCE A DEEPER MARKET HAD BEEN CREATED AND/OR, (C) IMF MIGHT START EXCHANGING GOLD FOR SDR'S (REF B).
7. COMMENT: BELGIANS SEEM RELAXED ON THIS ISSUE FEELING THAT THEY ARE UNLIKELY TO BE EITHER BUYERS OR SELLERS OF GOLD IN THE SHORT OR MEDIUM TERM. THE GOB FEELS, HOWEVER, THAT THE ITALIANS HAVE A REAL CASE FOR SOME WAY BEING FOUND FOR ITALY TO UTILIZE ITS GOLD HOLDINGS. FURTHERMORE, SINCE THE FRENCH ARE IN A SIMILAR POSITION (I.E. HOLDING A RELATIVELY LARGE PART OF THEIR RESERVES IN GOLD), THE GOB HOPES THAT BY GIVING THE FRENCH A WAY TO MAKE THIS GOLD USEABLE IN INTERNATIONAL SETTLEMENTS, THIS WILL HELP BRING FRANCE BACK INTO THE EEC SNAKE. STRAUSZ-HUP
Source: https://www.wikileaks.org/plusd/cables/1974BRUSSE02610_b.html
Summary: Timeline overview
Monetary gold wikileaks - 1975ROME11625_b
B. EC BRUSSELS 6135 (NOTAL)
1. SUMMARY. BANK OF ITALY VICE DIRECTOR GENERAL OSSOLA DISCUSSED STATUS OF EC POSITION ON INTERNATIONAL MONETARY REFORM ISSUES WITH TREASATT ON AUGUST 12. HE WAS PREPARED TO VISIT WASHINGTON BEFORE NEXT EC MINFIN MEETING, IF THIS WOULD BE USEFUL. END SUMMARY.
2. OSSOLA SAID THAT AT EC MONETARY COMMITTEE MEETING ON AUGUST 11 EC COUNTRIES, EXCEPT FRANCE, WERE AGREED ON SO- CALLED FORMULA 2 SOLUTION OF FUTURE FOREIGN EXCHANGE REGIME QUESTION, I.E., IMF ARTICLES OF AGREEMENT WOULD ADOPT INTERIM COMMITTEE COMMUNIQUE LANGUAGE AND IT WOULD BE AGREED THAT, WHEN IMF EVENTUALLY CALLED UPON COUNTRIES TO FIX PARITIES, COUNTRIES IN SPECIAL CIRCUMSTANCES COULD CONTINUE TO FLOAT AND IMF WOULD NOT CHALLENGE SUCH A DECISION. (SEE PARA 7.A.2. OF REF B.) OSSOLA RECOGNIZED THAT THIS FORMULATION MIGHT STILL NOT PROVIDE BASIS FOR AGREEMENT BY BOTH U.S. AND FRANCE AND REFERRED AGAIN TO POSSIBILITY OF COMPROMISE TWO-PART APCKAGE INVOLVING AGREEMENT ON GOLD AND ON IMF QUOTAS ONLY (REF A).
3. OSSOLA POINTED TO RECENT EC AGREEMENT TO EXCLUDE GOLD FROM INTRA-COMMUNITY SETTLEMENTS UNDER VERY SHORT-TERM CREDIT ARRANGEMENTS AS EVIDENCE THAT EC DID NOT INTEND TO RE-ESTABLISH GOLD AS MEANS OF SETTLEMENT AMONG ITS CENTRAL BANKS. HE BELIEVED THAT AGREEMENT ON DISPOSITION OF IMF GOLD SHOULD ALSO PROVE POSSIBLE. OSSOLA WAS STILL UNCERTAIN AS TO WHETHER IMF QUOTA QUESTION COULD BE AGREED UPON AT FUND/BANK MEETING IN WASHINGTON.
4. OSSOLA SAID THAT TREASURY MINISTER COLOMBO, WHO WILL PRESIDE OVER AUGUST 24 MEETING OF EC MINISTERS OF FINANCE IN VENICE, HAD ASKED HIM TO KEEP IN TOUCH WITH U.S. TO ASSURE THAT ANY JOINT EC POSITION WHICH MIGHT BE ADOPTED AT VENICE MEETING NOT BE COMPLETELY UNACCEPTABLE TO U.S. OSSOLA SAID THAT HE AHD BEEN IN TOUCH WITH U.S. EXECUTIVE DIRECTOR AT IMF, CROSS, THROUGH ITALIAN EXECUTIVE DIRECTOR. HE HAD EXPLAINED THAT HE WOULD BE PREPARED TO VISIT WASHINGTON BEFORE AUGUST 24 MEETING IN EFFORT TO DETERMINE WHETHER THERE WAS REAL POSSIBILITY OF REACHING COMPROMISE AGREEMENT AT FUND/BANK MEETING. IF PROSPECTS FOR REACHING AGREEMENT JUSTIFIED IT, ANY SUCH VISIT WOULD ONLY BE AIMED AT CLARIFYING STATUS OF NEGOTIATIONS AND WOULD NOT CONSTITUTE ATTEMPT TO MEDIATE CONFLICTING POSITIONS. OSSOLA COMMENTED THAT AT MONETARY COMMITTEE MEETING FRENCH HAD REFERRED TO FUND/BANK MEETING IN SEPTEMBER AND INTERIM COMMITTEE MEETING IN JANUARY AS OCCASIONS FOR SEEKING COMPROMISE AGREEMENT. HOWEVER, HE SUSPECTED THAT FRENCH
WOULD PROCRASTINATE AT WASHINGTON MEETING IN ORDER TO POSTPONE ANY DECISION UNTIL FALL MONETARY SUMMIT MEETING, WHICH HE PRESUMED WOULD TAKE PLACE.
VOLPE
Source: https://www.wikileaks.org/plusd/cables/1975ROME11625_b.html
Summary: Timeline overview
1. SUMMARY. BANK OF ITALY VICE DIRECTOR GENERAL OSSOLA DISCUSSED STATUS OF EC POSITION ON INTERNATIONAL MONETARY REFORM ISSUES WITH TREASATT ON AUGUST 12. HE WAS PREPARED TO VISIT WASHINGTON BEFORE NEXT EC MINFIN MEETING, IF THIS WOULD BE USEFUL. END SUMMARY.
2. OSSOLA SAID THAT AT EC MONETARY COMMITTEE MEETING ON AUGUST 11 EC COUNTRIES, EXCEPT FRANCE, WERE AGREED ON SO- CALLED FORMULA 2 SOLUTION OF FUTURE FOREIGN EXCHANGE REGIME QUESTION, I.E., IMF ARTICLES OF AGREEMENT WOULD ADOPT INTERIM COMMITTEE COMMUNIQUE LANGUAGE AND IT WOULD BE AGREED THAT, WHEN IMF EVENTUALLY CALLED UPON COUNTRIES TO FIX PARITIES, COUNTRIES IN SPECIAL CIRCUMSTANCES COULD CONTINUE TO FLOAT AND IMF WOULD NOT CHALLENGE SUCH A DECISION. (SEE PARA 7.A.2. OF REF B.) OSSOLA RECOGNIZED THAT THIS FORMULATION MIGHT STILL NOT PROVIDE BASIS FOR AGREEMENT BY BOTH U.S. AND FRANCE AND REFERRED AGAIN TO POSSIBILITY OF COMPROMISE TWO-PART APCKAGE INVOLVING AGREEMENT ON GOLD AND ON IMF QUOTAS ONLY (REF A).
3. OSSOLA POINTED TO RECENT EC AGREEMENT TO EXCLUDE GOLD FROM INTRA-COMMUNITY SETTLEMENTS UNDER VERY SHORT-TERM CREDIT ARRANGEMENTS AS EVIDENCE THAT EC DID NOT INTEND TO RE-ESTABLISH GOLD AS MEANS OF SETTLEMENT AMONG ITS CENTRAL BANKS. HE BELIEVED THAT AGREEMENT ON DISPOSITION OF IMF GOLD SHOULD ALSO PROVE POSSIBLE. OSSOLA WAS STILL UNCERTAIN AS TO WHETHER IMF QUOTA QUESTION COULD BE AGREED UPON AT FUND/BANK MEETING IN WASHINGTON.
4. OSSOLA SAID THAT TREASURY MINISTER COLOMBO, WHO WILL PRESIDE OVER AUGUST 24 MEETING OF EC MINISTERS OF FINANCE IN VENICE, HAD ASKED HIM TO KEEP IN TOUCH WITH U.S. TO ASSURE THAT ANY JOINT EC POSITION WHICH MIGHT BE ADOPTED AT VENICE MEETING NOT BE COMPLETELY UNACCEPTABLE TO U.S. OSSOLA SAID THAT HE AHD BEEN IN TOUCH WITH U.S. EXECUTIVE DIRECTOR AT IMF, CROSS, THROUGH ITALIAN EXECUTIVE DIRECTOR. HE HAD EXPLAINED THAT HE WOULD BE PREPARED TO VISIT WASHINGTON BEFORE AUGUST 24 MEETING IN EFFORT TO DETERMINE WHETHER THERE WAS REAL POSSIBILITY OF REACHING COMPROMISE AGREEMENT AT FUND/BANK MEETING. IF PROSPECTS FOR REACHING AGREEMENT JUSTIFIED IT, ANY SUCH VISIT WOULD ONLY BE AIMED AT CLARIFYING STATUS OF NEGOTIATIONS AND WOULD NOT CONSTITUTE ATTEMPT TO MEDIATE CONFLICTING POSITIONS. OSSOLA COMMENTED THAT AT MONETARY COMMITTEE MEETING FRENCH HAD REFERRED TO FUND/BANK MEETING IN SEPTEMBER AND INTERIM COMMITTEE MEETING IN JANUARY AS OCCASIONS FOR SEEKING COMPROMISE AGREEMENT. HOWEVER, HE SUSPECTED THAT FRENCH
WOULD PROCRASTINATE AT WASHINGTON MEETING IN ORDER TO POSTPONE ANY DECISION UNTIL FALL MONETARY SUMMIT MEETING, WHICH HE PRESUMED WOULD TAKE PLACE.
VOLPE
Source: https://www.wikileaks.org/plusd/cables/1975ROME11625_b.html
Summary: Timeline overview
Monetary gold wikileaks - 1975ROME08650_b
1. SUMMARY. BANK OF ITALY VICE DIRECTOR GENERAL OSSOLA
GAVE TREASATT JUNE 17 HIS IMPRESSIONS OF PRESENT STATE OF
PLAY CONCERNING EVENTUAL AGREEMENT ON MONETARY REFORM
PACKAGE. HE MENTIONED POSSIBLE COMPROMISE FORMULA AND
HOPED THAT MORE EFFICIENT PROCEDURES COULD BE ADOPTED AT
NEXT MEETING OF INTERIM COMMITTEE. END SUMMARY.
2. IMF QUOTAS. OSSOLA MENTIONED THAT G-10 MINISTERS HAD ASKED G-10 DEPUTIES TO HOLD SPECIAL MEETING JUNE 10 IN ATTEMPT CONFIDENTIAL TO RESOLVE DISPUTE ON RE-ALLOCATION OF IMF QUOTAS AMONG INDUSTRIAL COUNTRIES. HE HAD BEEN SKEPTICAL OF THIS INITIATIVE WHICH, IN FACT, HAD FAILED, ON GROUNDS THAT ISSUE WAS A POLITICAL ONE THAT ONLY MINISTERS COULD DECIDE. HE COULD NOT CLEARLY FORESEE HOW COMPROMISE MIGHT BE REACHED ON THIS ISSUE, BUT WONDERED WHETHER US MIGHT EVENTUALLY AGREE TO REDUCED QUOTA ON ASSUMPTION THAT WEIGHTED VOTING REQUIREMENT ON KEY ISSUES WOULD BE REDUCED FROM 80 PERCENT TO 85 PERCENT SO AS TO PRESERVE US VETO.
3. IMF FOLD. OSSOLA WAS QUITE OPTIMISTIC THAT COMPROMISE COULD BE REACHED ON QUESTION OF DISPOSAL OF IMF GOLD THROUGH PARTIAL RESTORATION TO ORIGINAL CONTRIBUTORS, PARTIAL SALE IN MARKET WITH PROFIT CHANNELED TO LDC'S, AND ADOPTION OF ENABLING CLAUSE TO PERMIT BOARD OF EXECUTIVE DIRECTORS TO DECIDE LATER ON DISPOSAL OF REMAINDER OF IMF GOLD.
4. GOLD PURCHASES AND SALES IN MARKET. OSSOLA THOUGHT THAT THERE WAS STILL BASIC AGREEMENT THAT, DURING INTERIM PERIOD OF UP TO TWO YEARS, CENTRAL BANKS MIGHT PURCHASE AND SELL GOLD IN FREE MARKET, PROVIDED THAT THIS WOULD NOT RESULT IN ANY NET INCREASE IN OFFICIAL HOLDINGS.
5. GOLD TRADING AMONG CENTRAL BANKS. OSSOLA HAD BEEN SOMEWHAT SURPRISED THAT THIS ASPECT OF GOLD QUESTION HAD CREATED GREATEST DIFFICULTIES. HE, PERSONALLY, INTERPRETED US POSITION THAT ONE CENTRAL BANK COULD SELL GOLD TO ANOTHER ONLY IN "EMERGENCY" SITUATIONS AS MOTIVATED BY STRONG US DESIRE TO AVOID REVIVAL OF ROLE OF GOLD FOR OFFICIAL SETTLEMENTS. HE VIEWED THIS, ALONG WITH USG RELUCTANCE TO ELIMINATE LEGAL IMPEDIMENTS TO USE OF SDR'S, AS EVIDENCE OF US DESIRE TO CREATE STRONGER ROLE FOR DOLLAR IN REFORMED INTERNATIONAL MONETARY SYSTEM. SINCE ITALY IS LARGE HOLDER OF GOLD RESERVES, HE WAS SYMPATHETIC TO FRENCH POSITION.
6. EXCHANGE RATE SYSTEM. OSSOLA REPEATED HIS VIEW THAT THIS US-FRENCH DEBATE WAS LARGELY THEORETICAL AND THAT IT WAS NOT WISE OR NECESSARY TO ATTEMPT TO FORMALIZE AGREEMENT ON THIS ASPECT OF MONETARY SYSTEM IN VIEW OF GREAT UNCERTAINTIES IN EVOLUTION OF EXCHANGE RATE REGIME. HOWEVER, HE SEEMED RATHER SYMPATHETIC TO US VIEW IN FAVOR OF CONSIDERABLE FREEDOM TO OPT FOR FLOATING RATE.
7. FOLLOW-UP. OSSOLA SAID THAT AT JUNE 16 EC MINISTERS OF FINANCE MEETING, BELGIANS HAD PROPOSED THAT NEXT MEETING OF INTERIM COMMITTEE LAST FOR TWO DAYS AND THAT IT BE PRECEDED BY MEETINGS OF G-10, BOTH AT MINISTERIAL AND AT DEPUTY LEVEL. EC WILL PROBABLY REQUEST THAT CHAIRMAN TURNER OF INTERIM COMMITTEE SCHEDULE TWO-DAY MEETING AND THAT CHAIRMAN OHIRA OF G-10 MINISTERS ALSO SCHEDULE PRIOR G-10 MEETING. OSSOLA SAID THAT HE WOULD BE PREPARED TO CONVENE G-10 DEPUTIES ON REQUEST EITHER OF G-10 CHAIRMAN OR OF INDIVIDUAL COUNTRY, BUT HE WAS HIGHLY SKEPTICAL THAT DEPUTIES WOULD BE IN POSITION TO RESOLVE ANY OF THESE ISSUES.
8. OSSOLA PERSONALLY BELIEVED THAT COMPROMISE CALLED FOR FRENCH TO ACCEPT US POSITION ON EXCHANGE RATE REGIME AND FOR US TO ACCEPT FRENCH POSITION ON TRADING IN GOLD AMONG CENTRAL BANKS. (OSSOLA WAS CONVINCED THAT, EVEN IF GIVEN THE RIGHT TO MAKE OFFICIAL SETTLEMENTS IN GOLD, CENTRAL BANKS, IN PRACTICE, WOULD NOT WISH TO DO SO.) HE WAS AWARE THAT EVERYONE AGREED THAT RESOLUTION OF VARIOUS MONETARY REFORM ISSUES MUST BE CONTAINED IN SINGLE PACKAGE. AS PRACTICAL MATTER, HE HOPED THAT CHAIRMAN TURNER COULD BEGIN NEXT MEETING OF INTERIM COMMITTEE WITH INTRODUCTION OF SOME KIND OF WORKING DOCUMENT TO FOCUS ATTENTION ON REACHING PRACTICAL COMPROMISE, THUS AVOIDING RECITATION OF INDIVIDUAL COUNTRIES' POSITIONS, WHICH ARE ALREADY WELL-KNOWN FROM PREVIOUS MEETINGS. VOLPE
Source: https://www.wikileaks.org/plusd/cables/1975ROME08650_b.html
Summary: Timeline overview
2. IMF QUOTAS. OSSOLA MENTIONED THAT G-10 MINISTERS HAD ASKED G-10 DEPUTIES TO HOLD SPECIAL MEETING JUNE 10 IN ATTEMPT CONFIDENTIAL TO RESOLVE DISPUTE ON RE-ALLOCATION OF IMF QUOTAS AMONG INDUSTRIAL COUNTRIES. HE HAD BEEN SKEPTICAL OF THIS INITIATIVE WHICH, IN FACT, HAD FAILED, ON GROUNDS THAT ISSUE WAS A POLITICAL ONE THAT ONLY MINISTERS COULD DECIDE. HE COULD NOT CLEARLY FORESEE HOW COMPROMISE MIGHT BE REACHED ON THIS ISSUE, BUT WONDERED WHETHER US MIGHT EVENTUALLY AGREE TO REDUCED QUOTA ON ASSUMPTION THAT WEIGHTED VOTING REQUIREMENT ON KEY ISSUES WOULD BE REDUCED FROM 80 PERCENT TO 85 PERCENT SO AS TO PRESERVE US VETO.
3. IMF FOLD. OSSOLA WAS QUITE OPTIMISTIC THAT COMPROMISE COULD BE REACHED ON QUESTION OF DISPOSAL OF IMF GOLD THROUGH PARTIAL RESTORATION TO ORIGINAL CONTRIBUTORS, PARTIAL SALE IN MARKET WITH PROFIT CHANNELED TO LDC'S, AND ADOPTION OF ENABLING CLAUSE TO PERMIT BOARD OF EXECUTIVE DIRECTORS TO DECIDE LATER ON DISPOSAL OF REMAINDER OF IMF GOLD.
4. GOLD PURCHASES AND SALES IN MARKET. OSSOLA THOUGHT THAT THERE WAS STILL BASIC AGREEMENT THAT, DURING INTERIM PERIOD OF UP TO TWO YEARS, CENTRAL BANKS MIGHT PURCHASE AND SELL GOLD IN FREE MARKET, PROVIDED THAT THIS WOULD NOT RESULT IN ANY NET INCREASE IN OFFICIAL HOLDINGS.
5. GOLD TRADING AMONG CENTRAL BANKS. OSSOLA HAD BEEN SOMEWHAT SURPRISED THAT THIS ASPECT OF GOLD QUESTION HAD CREATED GREATEST DIFFICULTIES. HE, PERSONALLY, INTERPRETED US POSITION THAT ONE CENTRAL BANK COULD SELL GOLD TO ANOTHER ONLY IN "EMERGENCY" SITUATIONS AS MOTIVATED BY STRONG US DESIRE TO AVOID REVIVAL OF ROLE OF GOLD FOR OFFICIAL SETTLEMENTS. HE VIEWED THIS, ALONG WITH USG RELUCTANCE TO ELIMINATE LEGAL IMPEDIMENTS TO USE OF SDR'S, AS EVIDENCE OF US DESIRE TO CREATE STRONGER ROLE FOR DOLLAR IN REFORMED INTERNATIONAL MONETARY SYSTEM. SINCE ITALY IS LARGE HOLDER OF GOLD RESERVES, HE WAS SYMPATHETIC TO FRENCH POSITION.
6. EXCHANGE RATE SYSTEM. OSSOLA REPEATED HIS VIEW THAT THIS US-FRENCH DEBATE WAS LARGELY THEORETICAL AND THAT IT WAS NOT WISE OR NECESSARY TO ATTEMPT TO FORMALIZE AGREEMENT ON THIS ASPECT OF MONETARY SYSTEM IN VIEW OF GREAT UNCERTAINTIES IN EVOLUTION OF EXCHANGE RATE REGIME. HOWEVER, HE SEEMED RATHER SYMPATHETIC TO US VIEW IN FAVOR OF CONSIDERABLE FREEDOM TO OPT FOR FLOATING RATE.
7. FOLLOW-UP. OSSOLA SAID THAT AT JUNE 16 EC MINISTERS OF FINANCE MEETING, BELGIANS HAD PROPOSED THAT NEXT MEETING OF INTERIM COMMITTEE LAST FOR TWO DAYS AND THAT IT BE PRECEDED BY MEETINGS OF G-10, BOTH AT MINISTERIAL AND AT DEPUTY LEVEL. EC WILL PROBABLY REQUEST THAT CHAIRMAN TURNER OF INTERIM COMMITTEE SCHEDULE TWO-DAY MEETING AND THAT CHAIRMAN OHIRA OF G-10 MINISTERS ALSO SCHEDULE PRIOR G-10 MEETING. OSSOLA SAID THAT HE WOULD BE PREPARED TO CONVENE G-10 DEPUTIES ON REQUEST EITHER OF G-10 CHAIRMAN OR OF INDIVIDUAL COUNTRY, BUT HE WAS HIGHLY SKEPTICAL THAT DEPUTIES WOULD BE IN POSITION TO RESOLVE ANY OF THESE ISSUES.
8. OSSOLA PERSONALLY BELIEVED THAT COMPROMISE CALLED FOR FRENCH TO ACCEPT US POSITION ON EXCHANGE RATE REGIME AND FOR US TO ACCEPT FRENCH POSITION ON TRADING IN GOLD AMONG CENTRAL BANKS. (OSSOLA WAS CONVINCED THAT, EVEN IF GIVEN THE RIGHT TO MAKE OFFICIAL SETTLEMENTS IN GOLD, CENTRAL BANKS, IN PRACTICE, WOULD NOT WISH TO DO SO.) HE WAS AWARE THAT EVERYONE AGREED THAT RESOLUTION OF VARIOUS MONETARY REFORM ISSUES MUST BE CONTAINED IN SINGLE PACKAGE. AS PRACTICAL MATTER, HE HOPED THAT CHAIRMAN TURNER COULD BEGIN NEXT MEETING OF INTERIM COMMITTEE WITH INTRODUCTION OF SOME KIND OF WORKING DOCUMENT TO FOCUS ATTENTION ON REACHING PRACTICAL COMPROMISE, THUS AVOIDING RECITATION OF INDIVIDUAL COUNTRIES' POSITIONS, WHICH ARE ALREADY WELL-KNOWN FROM PREVIOUS MEETINGS. VOLPE
Source: https://www.wikileaks.org/plusd/cables/1975ROME08650_b.html
Summary: Timeline overview
Monetary gold wikileaks - 1975ROME01201_b
1. SUMMARY. TREASATT SAW BANK OF ITALY VICE DIRECTOR
GENERAL OSSOLA JANUARY 27 TO DISCUSS FOLLOWING POINTS:
(1) RESULTS OF WASHINGTON MEETINGS OF G-10 AND IMF AND
(2) PROSPECTS FOR FINANCING ITALY'S EXPECTED 1975 BALANCE
OF PAYMENTS DEFICIT. END SUMMARY.
2. COLOMBO AND CARLI STATEMENTS ON SOLIDARITY FUND. FIRST OF ALL, OSSOLA SAID THAT HE AND BOI GOVERNOR CARLI WERE CHAGRINED BY PRESS REPORTS OF SOME RECENT STATEMENTS ATTRIBUTED TO TREASURY MINISTER COLOMBO AND GOVERNOR CARLI WHICH CONTAINED CRITICAL COMMENTS ON PROPOSED OECD SOLIDARITY FUND (REFS A AND B). OSSOLA REGRETTED THAT THESE STATEMENTS HAD BEEN TAKEN OUT OF CONTEXT AND HAD CAUSED SOME DIFFICULTIES FOR ITALIAN DELEGATION DURING WASHINGTON MEETINGS.
3. IMF OIL FACILITY. OSSOLA WAS QUITE PLEASED WITH WASHINGTON COMPROMISE ON IMF OIL FACILITY. HE COMMENTED THAT, NOTWITHSTANDING EARLIER MEETING OF BIG FIVE MINISTERS, G-10 DEPUTIES HAD HAD TO SPEND 4-1/2 HOURS IN NEGOTIATING AGREEMENT ON G-10 COMMUNIQUE. OSSOLA THOUGHT THAT 5 BILLION SDR AMOUND WAS RATHER SMALL BUT MIGHT BE ENOUGH WHEN COMBINED WITH OTHER IMF RESOURCES. ALSO, DESPITE STATEMENT BY IRAQI GOVERNOR WHICH SEEMED TO FAVOR IMF OIL FACILITY AS LARGE AS $12 BILLION, OSSOLA WONDERED WHETHER OIL PRODUCERS WOULD REALLY BE PREPARED TO CONTRIBUTE MORE THAN FINAL 5 BILLION SDR FIGURE.
4. OECD SOLIDARITY FUND. OSSOLA WAS PLEASED THAT G-10 MINISTERS HAD AGREED NOT TO PLACE RIGID LIMIT ON DRAWING RIGHTS UNDER PROPOSED SOLIDARITY FUND. WHILE AGREEMENT HAD NOT YET BEEN REACHED ON SOURCE OF FINANCING FOR THIS FUND, OSSOLA WAS INCLINED TO THINK THAT AGREEMENT WOULD BE REACHED FOR DIRECT CONTRIBUTIONS BY MOST COUNTRIES, WITH OTHER COUNTRIES (E.G., GERMANY) CONTRIBUTING GUARANTEES FOR BIS BORROWINGS IN MARKET. ITALIAN HAD BEEN SOMEWHAT DISAPPOINTED AT EMPHASIS PLACED ON "LAST RESORT" NATURE OF DRAWINGS FOR SOLIDARITY FUND FOR FEAR THAT ANY COUNTRY RESORTING TO FUND WOULD IMMEDIATELY BE CLASSED AS VERGING ON BANKRUPTCY. HOWEVER, THEY UNDERSTOOD REASONS FOR STRESSING THIS ASPECT OF FUND FROM POINT OF VIEW OF POTENTIAL CREDITOR COUNTRIES.
5. IMF QUOTAS. OSSOLA WAS PLEASED THAT INTERIM COMMITTEE HAD BEEN ABLE TO AGREE TO 32.5 PERCENT INCREASE IN IMF QUOTAS. HOWEVER, HE WAS SOMEWHAT CONCERNED ABOUT PROSPECTS FOR ALLOCATING QUOTA CUTS AMONG DEVELOPED COUNTRIES. AT WASHINGTON MEETINGS, US, JAPAN AND GERMANY HAD ALL INDICATED THAT THEY DID NOT WISH ANY CUT IN THEIR QUOTAS AND DUTCH THOUGHT THAT THEY DESERVED SOME INCREASE, AS AN ENERGY EXPORTER. IT WAS RATHER DIFFICULT TO SEE WHICH COUNTRIES WOULD BE WILLING TO ACCEPT NECESSARY CUTS IN QUOTAS. OSSOLA ACKNOWLEDGED THAT ITALY MIGHT BE ABLE TO ACCEPT MODEST REDUCTION BUT IT WISHED TO PRESERVE ITS RIGHT TO CHOOSE ITS OWN EXECUTIVE DIRECTOR.
6. GOLD. OSSOLA THOUGHT THAT SIGNIFICANT PROGRESS HAD BEEN MADE ON FUTURE ROLE OF GOLD INCLUDING GENTLEMEN'S AGREEMENT FOR INTERIM PERIOD AIMED AT AVOIDING NET INCREASES IN CENTRAL BANK GOLD HOLDINGS. HE SAID THAT, WHILE FRENCH WOULD NOT WANT TO OPENLY SUBSCRIBE TO SUCH AN AGREEMENT SO AS NOT TO LOSE FACE, THEY WOULD VERY LIKELY ABIDE BY AGREEMENT, AS HAD BEEN THE CASE WITH MARCH 1968 GOLD AGREEMENT.
7. FINANCING ITALY'S 1975 DEFICIT. OSSOLA SEEMED FAIRLY OPTIMISTIC ABOUT ITALY'S ABILITY TO FINANCE ITS EXPECTED 1975 BLANCE OF PAYMENTS DEFICIT. HOWEVER, HE ACKNOWLEDGED THAT THE BANK HAD NOT YET DRAWN UP A DETAILED FINANCING PROGRAM FOR 1975. SOMEWHAT SURPRISINGLY, HE SAID THAT HE WAS NOT IN FAVOR OF PROPOSED EC BORROWING FROM OIL PRODUCERS. HE THOUGHT THAT THIS TECHNIQUE WAS INFERIOR TO BOTH IMF OIL FACILITY AND TO SOLIDARITY FUND APPROACH. ITS WEAKNESS WAS THAT CREDITORS WOULD KNOW WHICH COUNTRIES WERE TO BE ULTIMATE BORROWERS. THIS COULD AFFECT TERMS OF LOAN AND HAVE ADVERSE PSYCHOLOGICAL EFFECTS ON THESE BORROWERS. OSSOLA THOUGHT THAT HE HAD DISCOURAGED GOVERNOR CARLI FROM THIS SOURCE OF FINANCING, BUT RECOGNIZED THAT CARLI AND COLOMBO HAD BOTH COMMITTED THEMSELVES, TO SOME EXTENT, TO USE OF THIS FACILITY. PRESUMABLY SOME DECISION WOULD HAVE TO BE MADE BY ITALIAN AUTHORITIES AS TO WHETHER OR NOT TO FORMALLY ASK FOR EC BORROWING WHEN EC MINISTERS OF FINANCE CONVENED ON FEBRUARY 17.
8. AS T USE OF EXPANDED IMF OIL FACILITY, OSSOLA NOTED THAT IMF WAS CONTINUING TO USE DECLINE IN GROSS RESERVES AS CRITERION OF ELIGIBILITY FOR BORROWING. BECAUSE OF $2. BILLION GERMAN GOLD LOAN, BOI GROSS RESERVES WERE NOW RATHER HIGH BUT OFFICIAL LIABILITIES WERE VERY LARGE AND NET RESERVE POSITION WEAK. THEORETICALLY, ITALY MIGHT EVEN BE ASKED TO MAKE REPAYMENTS ON 1974 OIL FACILITY DRAWINGS THIS YEAR. IN ANY CASE, OSSOLA INDICATED THAT ITALIANS SAW IMF OIL FACILITY AS IMPORTANT POTENTIAL SOURCE OF ITALIAN BORROWING IN 1975.
9. OSSOLA PROFESSED IGNORANCE ABOUT EXACT STATUS AND PROSPECTS FOR DIRECT ITALAN BORROWING FROM IRAN AND SAUDI ARABIA. HE SAID HE WAS NOT JUST BEING "RETICENT" BUT REALLY DID NOT KNOW ABOUT THIS. HE PLANNED TO INQUIRE FURTHER WITHIN BANK AND WITHIN GOI. HE HAD IMPRESSION THAT REPORTED ADVANCE PAYMENTS OF $1. BILLION OR MORE FROM IRANIANS WAS STILL ONLY VAGUE COMMITMENT (SEE REF C).
10. AS TO PROSPECTS FOR EUROMARKET BORROWING, OSSOLA SEEMED TO CONTEMPLATE THAT 1972-1974 EUROMARKET TERM LOAN REPAYMENTS WOULD BE MET ON SCHEDULE IN 1975. HE DID NOT COMPLETELY EXCLUDE POSSIBILITY OF PARTIAL REFINANCING BY EUROBANKS, BUT HAD EVIDENTLY NOT THOUGHT MUCH ABOUT THIS POSSIBILITY. HE MENTIONED THAT $3 BILLION SWAP WITH FEDERAL RESERVE COULD BE USED FOR "BRIDGE" FINANCING OF DEBT REPAYMENTS, IF THERE WERE SHORT-TERM CASH FLOW PROBLEM. HE MENTIONED THAT BANK OF ITALY MIGHT TERMINATE $500 MILLION SWAP LINE WITH BUNDESBANK, SINCE SWAP WAS MAINLY FOR UNNECESSARY WINDOW DRESSING PURPOSES. VOLPE
Source: https://www.wikileaks.org/plusd/cables/1975ROME01201_b.html
Summary: Timeline overview
2. COLOMBO AND CARLI STATEMENTS ON SOLIDARITY FUND. FIRST OF ALL, OSSOLA SAID THAT HE AND BOI GOVERNOR CARLI WERE CHAGRINED BY PRESS REPORTS OF SOME RECENT STATEMENTS ATTRIBUTED TO TREASURY MINISTER COLOMBO AND GOVERNOR CARLI WHICH CONTAINED CRITICAL COMMENTS ON PROPOSED OECD SOLIDARITY FUND (REFS A AND B). OSSOLA REGRETTED THAT THESE STATEMENTS HAD BEEN TAKEN OUT OF CONTEXT AND HAD CAUSED SOME DIFFICULTIES FOR ITALIAN DELEGATION DURING WASHINGTON MEETINGS.
3. IMF OIL FACILITY. OSSOLA WAS QUITE PLEASED WITH WASHINGTON COMPROMISE ON IMF OIL FACILITY. HE COMMENTED THAT, NOTWITHSTANDING EARLIER MEETING OF BIG FIVE MINISTERS, G-10 DEPUTIES HAD HAD TO SPEND 4-1/2 HOURS IN NEGOTIATING AGREEMENT ON G-10 COMMUNIQUE. OSSOLA THOUGHT THAT 5 BILLION SDR AMOUND WAS RATHER SMALL BUT MIGHT BE ENOUGH WHEN COMBINED WITH OTHER IMF RESOURCES. ALSO, DESPITE STATEMENT BY IRAQI GOVERNOR WHICH SEEMED TO FAVOR IMF OIL FACILITY AS LARGE AS $12 BILLION, OSSOLA WONDERED WHETHER OIL PRODUCERS WOULD REALLY BE PREPARED TO CONTRIBUTE MORE THAN FINAL 5 BILLION SDR FIGURE.
4. OECD SOLIDARITY FUND. OSSOLA WAS PLEASED THAT G-10 MINISTERS HAD AGREED NOT TO PLACE RIGID LIMIT ON DRAWING RIGHTS UNDER PROPOSED SOLIDARITY FUND. WHILE AGREEMENT HAD NOT YET BEEN REACHED ON SOURCE OF FINANCING FOR THIS FUND, OSSOLA WAS INCLINED TO THINK THAT AGREEMENT WOULD BE REACHED FOR DIRECT CONTRIBUTIONS BY MOST COUNTRIES, WITH OTHER COUNTRIES (E.G., GERMANY) CONTRIBUTING GUARANTEES FOR BIS BORROWINGS IN MARKET. ITALIAN HAD BEEN SOMEWHAT DISAPPOINTED AT EMPHASIS PLACED ON "LAST RESORT" NATURE OF DRAWINGS FOR SOLIDARITY FUND FOR FEAR THAT ANY COUNTRY RESORTING TO FUND WOULD IMMEDIATELY BE CLASSED AS VERGING ON BANKRUPTCY. HOWEVER, THEY UNDERSTOOD REASONS FOR STRESSING THIS ASPECT OF FUND FROM POINT OF VIEW OF POTENTIAL CREDITOR COUNTRIES.
5. IMF QUOTAS. OSSOLA WAS PLEASED THAT INTERIM COMMITTEE HAD BEEN ABLE TO AGREE TO 32.5 PERCENT INCREASE IN IMF QUOTAS. HOWEVER, HE WAS SOMEWHAT CONCERNED ABOUT PROSPECTS FOR ALLOCATING QUOTA CUTS AMONG DEVELOPED COUNTRIES. AT WASHINGTON MEETINGS, US, JAPAN AND GERMANY HAD ALL INDICATED THAT THEY DID NOT WISH ANY CUT IN THEIR QUOTAS AND DUTCH THOUGHT THAT THEY DESERVED SOME INCREASE, AS AN ENERGY EXPORTER. IT WAS RATHER DIFFICULT TO SEE WHICH COUNTRIES WOULD BE WILLING TO ACCEPT NECESSARY CUTS IN QUOTAS. OSSOLA ACKNOWLEDGED THAT ITALY MIGHT BE ABLE TO ACCEPT MODEST REDUCTION BUT IT WISHED TO PRESERVE ITS RIGHT TO CHOOSE ITS OWN EXECUTIVE DIRECTOR.
6. GOLD. OSSOLA THOUGHT THAT SIGNIFICANT PROGRESS HAD BEEN MADE ON FUTURE ROLE OF GOLD INCLUDING GENTLEMEN'S AGREEMENT FOR INTERIM PERIOD AIMED AT AVOIDING NET INCREASES IN CENTRAL BANK GOLD HOLDINGS. HE SAID THAT, WHILE FRENCH WOULD NOT WANT TO OPENLY SUBSCRIBE TO SUCH AN AGREEMENT SO AS NOT TO LOSE FACE, THEY WOULD VERY LIKELY ABIDE BY AGREEMENT, AS HAD BEEN THE CASE WITH MARCH 1968 GOLD AGREEMENT.
7. FINANCING ITALY'S 1975 DEFICIT. OSSOLA SEEMED FAIRLY OPTIMISTIC ABOUT ITALY'S ABILITY TO FINANCE ITS EXPECTED 1975 BLANCE OF PAYMENTS DEFICIT. HOWEVER, HE ACKNOWLEDGED THAT THE BANK HAD NOT YET DRAWN UP A DETAILED FINANCING PROGRAM FOR 1975. SOMEWHAT SURPRISINGLY, HE SAID THAT HE WAS NOT IN FAVOR OF PROPOSED EC BORROWING FROM OIL PRODUCERS. HE THOUGHT THAT THIS TECHNIQUE WAS INFERIOR TO BOTH IMF OIL FACILITY AND TO SOLIDARITY FUND APPROACH. ITS WEAKNESS WAS THAT CREDITORS WOULD KNOW WHICH COUNTRIES WERE TO BE ULTIMATE BORROWERS. THIS COULD AFFECT TERMS OF LOAN AND HAVE ADVERSE PSYCHOLOGICAL EFFECTS ON THESE BORROWERS. OSSOLA THOUGHT THAT HE HAD DISCOURAGED GOVERNOR CARLI FROM THIS SOURCE OF FINANCING, BUT RECOGNIZED THAT CARLI AND COLOMBO HAD BOTH COMMITTED THEMSELVES, TO SOME EXTENT, TO USE OF THIS FACILITY. PRESUMABLY SOME DECISION WOULD HAVE TO BE MADE BY ITALIAN AUTHORITIES AS TO WHETHER OR NOT TO FORMALLY ASK FOR EC BORROWING WHEN EC MINISTERS OF FINANCE CONVENED ON FEBRUARY 17.
8. AS T USE OF EXPANDED IMF OIL FACILITY, OSSOLA NOTED THAT IMF WAS CONTINUING TO USE DECLINE IN GROSS RESERVES AS CRITERION OF ELIGIBILITY FOR BORROWING. BECAUSE OF $2. BILLION GERMAN GOLD LOAN, BOI GROSS RESERVES WERE NOW RATHER HIGH BUT OFFICIAL LIABILITIES WERE VERY LARGE AND NET RESERVE POSITION WEAK. THEORETICALLY, ITALY MIGHT EVEN BE ASKED TO MAKE REPAYMENTS ON 1974 OIL FACILITY DRAWINGS THIS YEAR. IN ANY CASE, OSSOLA INDICATED THAT ITALIANS SAW IMF OIL FACILITY AS IMPORTANT POTENTIAL SOURCE OF ITALIAN BORROWING IN 1975.
9. OSSOLA PROFESSED IGNORANCE ABOUT EXACT STATUS AND PROSPECTS FOR DIRECT ITALAN BORROWING FROM IRAN AND SAUDI ARABIA. HE SAID HE WAS NOT JUST BEING "RETICENT" BUT REALLY DID NOT KNOW ABOUT THIS. HE PLANNED TO INQUIRE FURTHER WITHIN BANK AND WITHIN GOI. HE HAD IMPRESSION THAT REPORTED ADVANCE PAYMENTS OF $1. BILLION OR MORE FROM IRANIANS WAS STILL ONLY VAGUE COMMITMENT (SEE REF C).
10. AS TO PROSPECTS FOR EUROMARKET BORROWING, OSSOLA SEEMED TO CONTEMPLATE THAT 1972-1974 EUROMARKET TERM LOAN REPAYMENTS WOULD BE MET ON SCHEDULE IN 1975. HE DID NOT COMPLETELY EXCLUDE POSSIBILITY OF PARTIAL REFINANCING BY EUROBANKS, BUT HAD EVIDENTLY NOT THOUGHT MUCH ABOUT THIS POSSIBILITY. HE MENTIONED THAT $3 BILLION SWAP WITH FEDERAL RESERVE COULD BE USED FOR "BRIDGE" FINANCING OF DEBT REPAYMENTS, IF THERE WERE SHORT-TERM CASH FLOW PROBLEM. HE MENTIONED THAT BANK OF ITALY MIGHT TERMINATE $500 MILLION SWAP LINE WITH BUNDESBANK, SINCE SWAP WAS MAINLY FOR UNNECESSARY WINDOW DRESSING PURPOSES. VOLPE
Source: https://www.wikileaks.org/plusd/cables/1975ROME01201_b.html
Summary: Timeline overview
Monetary gold wikileaks - 1974ROME15912_b
OSSOLA IDEAS ON: (A) DEFERRED OIL PAYMENTS: (B) SALE OF IMF GOLD BONDS
1. SUMMARY. IN MEETING WITH TREASATT NOVEMBER 14, BANK OF ITALY VICE DIRECTOR GENERAL OSSOLA EXPLAINED BASIC CONCEPT OF TWO IDEAS FOR DEFERMENT OF OIL PAYMENTS AND FOR ISSUANCE OF GOLD BONDS BY IMF WHICH HE HAD FLOATED ON NOVEMBER 11 AT KILLARNEY SEMINAR SPONSORED BY IRISH INSTITUTE OF CHARTERED ACCOUNTANTS. END SUMMARY.
2. OSSOLA FIRST DESCRIBED DIFFERENCES IN POSITINS OF US AND EC ON FUTURE OF IMF GOLD. HE SAID THAT US THOUGHT THAT IMF SHOULD EVENTUALLY SELL ITS GOLD IN FREE MARKET. THIS CONTRASTED WITH VIEWS OF SOME EC COUNTRIES (E.G., FRENTH) WHO WISHED TO RECOUP FROM IMF THEIR GOLD CONTRIBUTIONS. INTENT BEHIND OSSOLA'S IDEA OF SALE OF GOLD BONDS BY IMF WAS BOTH TO PROVIDE NEW FORM OF RECYCLING OF PETRODOLLARS AND TO REACH COMPROMISE SOLUTION RE EVENTUAL DISPOSITION OF IMF GOLD. HE STRESSED THAT HIS IDEAS WERE ENTIRELY PERSONAL, BUT IF THERE WERE SUFFICIENT INTEREST HE MIGHT PREPARE BACKGROUND PAPER FOR SUBMISSION TO EC MONETARY COMMITTEE, G-10 DEPUTIES, OR OTHER APPROPRIATE GROUP. OSSOLA'S PLAN WOULD INVOLVE SALE "ON TAP" OF MEDIUM- TERM BONDS (7-10 YEARS) TO OIL PRODUCERS OR OTHER INTERESTED INVESTORS. BONDS WOULD BE DENOMINATED AND REDEEMABLE IN GOLD AND WOULD PAY LOW RATE OF INTEREST, E.G., 2-1/2 TO 3 PERCENT. ALTHOUGH OIL PRODUCERS AT PRESENT SEEM HESITANT TO BUY GOLD AT PRESENT MARKET PRICE, OSSOLA THOUGHT THAT GOLD-DENOMINATED SECURITIES MIGHT BE MORE ATTRACTIVE TO THEM. AT SAME TIME, AMORTIZATION OF BONDS WITH IMF GOLD WOULD CONFORM TO US PREFERENCE FOR EVENTUAL DISPOSITION OF IMF GOLD IN FREE MARKET. PROCEEDS FROM GOLD BOND ISSUES WOULD BE RE-LENT TO OIL CONSUMERS BY IMF THROUGH NEW CREDIT "WINDOW." INTEREST CHARGED ON SUC LOANS MIGHT BE SIMILAR TO THAT OF IMF OIL FACILITY.
3. ON SUBJECT OF DEFERRED PAYMENT SCHEME (SEE "FINANCIAL TIMES" ARTICLE OF NOVEMBER 12,) OSSOLA SAID THAT THIS IDEA GREW OUT OF HIS CONVICTION, AND THAT OF OTHER ITALIAN AUTHORITIES, THAT MERE RECYCLING OF CONFIDENTIAL ENORMOUS PAYMENTS FOR OIL IMPORTS WOULD NOT SOLVE PROBLEM. REDUCE AT SOURCE AMOUNTS OF CASH INCOME OF OIL PRODUCERS WHICH MUST BE RECYCLED. UNDER OSSOLA PLAN, OIL CONSUMERS WOULD RECEIVE FROM SOME INTRNATIONAL AGENCY NON-REDEEMABLE BONDS DENOMINATED IN SDR'S TO COVER SOME PERCENTAGE OF THEIR IMPORTS OF OIL. THEY WOULD USE THESE BONDS FOR PARTIAL PAYMENT OF THEIR OIL IMPORTS FROM PRODUCING COUNTRIES. (ACCORDING TO "FINANCIAL TIMES" ARTICLE, PERCENTAGE OF OIL IMPORT PAYMENTS MADE IN FORM OF BONDS WOULD BE GRADUALLY REDUCED OVER TIME AND INTEREST PAYMENTS ON BONDS ISSUED TO OIL IMPORTERS WOULD BE TRANSFERRED TOPRODUCER NATIONS.)
4. OSSOLA COMMENTED THAT HE HAD STATED QUITE CLEARLY AT KILLARNEY SEMINAR THAT PROESENT OIL PRICE WAS CREATING IMPOSSIBLE SITUATION. BASIC PROBLEM WAS NOT INABILITY OF IMPORTING COUNTRIES TO PAY FOR OIL, BUT INABILITY OF OIL PRODUCERS TO UTILIZE THEIR CURRENT INCOME FOR PURCHASE OF GOODS AND SERVICES. DEFERRED PAYMENT PLAN WOULD DEAL DIRECTLY WITH THIS PROBLEM, WHILE IMF GOLD BOND SALES WOULD HELP RESOLVE INTERIM FINANCING PROBLEMS.
5. COMMENT: THESE RATHER COMPLEX SCHEMES ARE TYPICAL OF OSSOLA'S EVER-IMAGINATIVE ATTEMPTS TO SOLVE PROBLEMS AND SEEK COMPROMISES. THEY WOULD, OF COURSE, ALSO CONFORM TO CURRENT PERCEPTIONS OF ITALY'S OWN BEST INTERESTS. VOLPE
Source: https://www.wikileaks.org/plusd/cables/1974ROME15912_b.html
Summary: Timeline overview
1. SUMMARY. IN MEETING WITH TREASATT NOVEMBER 14, BANK OF ITALY VICE DIRECTOR GENERAL OSSOLA EXPLAINED BASIC CONCEPT OF TWO IDEAS FOR DEFERMENT OF OIL PAYMENTS AND FOR ISSUANCE OF GOLD BONDS BY IMF WHICH HE HAD FLOATED ON NOVEMBER 11 AT KILLARNEY SEMINAR SPONSORED BY IRISH INSTITUTE OF CHARTERED ACCOUNTANTS. END SUMMARY.
2. OSSOLA FIRST DESCRIBED DIFFERENCES IN POSITINS OF US AND EC ON FUTURE OF IMF GOLD. HE SAID THAT US THOUGHT THAT IMF SHOULD EVENTUALLY SELL ITS GOLD IN FREE MARKET. THIS CONTRASTED WITH VIEWS OF SOME EC COUNTRIES (E.G., FRENTH) WHO WISHED TO RECOUP FROM IMF THEIR GOLD CONTRIBUTIONS. INTENT BEHIND OSSOLA'S IDEA OF SALE OF GOLD BONDS BY IMF WAS BOTH TO PROVIDE NEW FORM OF RECYCLING OF PETRODOLLARS AND TO REACH COMPROMISE SOLUTION RE EVENTUAL DISPOSITION OF IMF GOLD. HE STRESSED THAT HIS IDEAS WERE ENTIRELY PERSONAL, BUT IF THERE WERE SUFFICIENT INTEREST HE MIGHT PREPARE BACKGROUND PAPER FOR SUBMISSION TO EC MONETARY COMMITTEE, G-10 DEPUTIES, OR OTHER APPROPRIATE GROUP. OSSOLA'S PLAN WOULD INVOLVE SALE "ON TAP" OF MEDIUM- TERM BONDS (7-10 YEARS) TO OIL PRODUCERS OR OTHER INTERESTED INVESTORS. BONDS WOULD BE DENOMINATED AND REDEEMABLE IN GOLD AND WOULD PAY LOW RATE OF INTEREST, E.G., 2-1/2 TO 3 PERCENT. ALTHOUGH OIL PRODUCERS AT PRESENT SEEM HESITANT TO BUY GOLD AT PRESENT MARKET PRICE, OSSOLA THOUGHT THAT GOLD-DENOMINATED SECURITIES MIGHT BE MORE ATTRACTIVE TO THEM. AT SAME TIME, AMORTIZATION OF BONDS WITH IMF GOLD WOULD CONFORM TO US PREFERENCE FOR EVENTUAL DISPOSITION OF IMF GOLD IN FREE MARKET. PROCEEDS FROM GOLD BOND ISSUES WOULD BE RE-LENT TO OIL CONSUMERS BY IMF THROUGH NEW CREDIT "WINDOW." INTEREST CHARGED ON SUC LOANS MIGHT BE SIMILAR TO THAT OF IMF OIL FACILITY.
3. ON SUBJECT OF DEFERRED PAYMENT SCHEME (SEE "FINANCIAL TIMES" ARTICLE OF NOVEMBER 12,) OSSOLA SAID THAT THIS IDEA GREW OUT OF HIS CONVICTION, AND THAT OF OTHER ITALIAN AUTHORITIES, THAT MERE RECYCLING OF CONFIDENTIAL ENORMOUS PAYMENTS FOR OIL IMPORTS WOULD NOT SOLVE PROBLEM. REDUCE AT SOURCE AMOUNTS OF CASH INCOME OF OIL PRODUCERS WHICH MUST BE RECYCLED. UNDER OSSOLA PLAN, OIL CONSUMERS WOULD RECEIVE FROM SOME INTRNATIONAL AGENCY NON-REDEEMABLE BONDS DENOMINATED IN SDR'S TO COVER SOME PERCENTAGE OF THEIR IMPORTS OF OIL. THEY WOULD USE THESE BONDS FOR PARTIAL PAYMENT OF THEIR OIL IMPORTS FROM PRODUCING COUNTRIES. (ACCORDING TO "FINANCIAL TIMES" ARTICLE, PERCENTAGE OF OIL IMPORT PAYMENTS MADE IN FORM OF BONDS WOULD BE GRADUALLY REDUCED OVER TIME AND INTEREST PAYMENTS ON BONDS ISSUED TO OIL IMPORTERS WOULD BE TRANSFERRED TOPRODUCER NATIONS.)
4. OSSOLA COMMENTED THAT HE HAD STATED QUITE CLEARLY AT KILLARNEY SEMINAR THAT PROESENT OIL PRICE WAS CREATING IMPOSSIBLE SITUATION. BASIC PROBLEM WAS NOT INABILITY OF IMPORTING COUNTRIES TO PAY FOR OIL, BUT INABILITY OF OIL PRODUCERS TO UTILIZE THEIR CURRENT INCOME FOR PURCHASE OF GOODS AND SERVICES. DEFERRED PAYMENT PLAN WOULD DEAL DIRECTLY WITH THIS PROBLEM, WHILE IMF GOLD BOND SALES WOULD HELP RESOLVE INTERIM FINANCING PROBLEMS.
5. COMMENT: THESE RATHER COMPLEX SCHEMES ARE TYPICAL OF OSSOLA'S EVER-IMAGINATIVE ATTEMPTS TO SOLVE PROBLEMS AND SEEK COMPROMISES. THEY WOULD, OF COURSE, ALSO CONFORM TO CURRENT PERCEPTIONS OF ITALY'S OWN BEST INTERESTS. VOLPE
Source: https://www.wikileaks.org/plusd/cables/1974ROME15912_b.html
Summary: Timeline overview
Monetary gold wikileaks - 1974ROME16949_b
PASS TREASURY AND FRB
1. BANK OF ITALY VICE DIRECTOR GENERAL OSSOLA HAD LITTLE TO SAY TO TREASATT ON DECEMBER 5 ABOUT U.S. TREASURY DECISION TO OFFER 2 MILLION OUNCES OF GOLD FROM U.S. RESERVES FOR PUBLIC SALE IN JANUARY, DESPITE WIDE COVERAGE OF ISSUE IN ITALIAN PRESS (REFTEL). HE MERELY SAID THAT HE WAS "PERPLEXED" BY U.S. DECISION AND QUESTIONED WHETHER IT REALLY CONTRIBUTED TO INTER- NATIONAL MONETARY REFORM (A REFERNCE TO USIS WIRELESS REPORT OF DECEMBER 5 OF SECRETARY SIMON'S TESTIMONY). OSSOLA ACKNOWLEDGED THAT ITALY OBVIOUSLY FAVORED HIGH PRICE FOR GOLD, FOR PRACTICAL REASON THAT IT HAS LARGE BALANCE OF PAYMENTS DEFICIT TO FINANCE.
2. ITALIAN PRESS DECEMBER 6 WIDELY REPORTS TESTIMONY BY FRB CHAIRMAN BURNS FAVORING POSTPONEMENT OF PERMISSION FOR U.S. CITIZENS TO PURCHASE GOLD, AT LEAST UNTIL JUNE 30, 1975. ARTICLES STRESS APPARENT CONFLICT BETWEEN THIS POSITION AND THAT OF TREASURY SECRETARY SIMON.
VOLPE
Source: https://www.wikileaks.org/plusd/cables/1974ROME16949_b.html
Summary: Timeline overview
1. BANK OF ITALY VICE DIRECTOR GENERAL OSSOLA HAD LITTLE TO SAY TO TREASATT ON DECEMBER 5 ABOUT U.S. TREASURY DECISION TO OFFER 2 MILLION OUNCES OF GOLD FROM U.S. RESERVES FOR PUBLIC SALE IN JANUARY, DESPITE WIDE COVERAGE OF ISSUE IN ITALIAN PRESS (REFTEL). HE MERELY SAID THAT HE WAS "PERPLEXED" BY U.S. DECISION AND QUESTIONED WHETHER IT REALLY CONTRIBUTED TO INTER- NATIONAL MONETARY REFORM (A REFERNCE TO USIS WIRELESS REPORT OF DECEMBER 5 OF SECRETARY SIMON'S TESTIMONY). OSSOLA ACKNOWLEDGED THAT ITALY OBVIOUSLY FAVORED HIGH PRICE FOR GOLD, FOR PRACTICAL REASON THAT IT HAS LARGE BALANCE OF PAYMENTS DEFICIT TO FINANCE.
2. ITALIAN PRESS DECEMBER 6 WIDELY REPORTS TESTIMONY BY FRB CHAIRMAN BURNS FAVORING POSTPONEMENT OF PERMISSION FOR U.S. CITIZENS TO PURCHASE GOLD, AT LEAST UNTIL JUNE 30, 1975. ARTICLES STRESS APPARENT CONFLICT BETWEEN THIS POSITION AND THAT OF TREASURY SECRETARY SIMON.
VOLPE
Source: https://www.wikileaks.org/plusd/cables/1974ROME16949_b.html
Summary: Timeline overview
Monetary gold wikileaks - 1974ECBRU01808_b
C) LUXEMBOURG 0187
1. SUMMARY: THE DEPUTIES OF THE EC MONETARY COMMITTEE
MET IN BRUSSELS MARCH 22. THEY REJECTED AS INADEQUATE
THE PAPER OF THE SECRETARIAT OF THE COMMITTEE (REF C)
SUMMARIZING VARIOUS OPTIONS ON GOLD. THE PAPER WILL
BE REDRAFTED TO NARROW THE NUMBER OF OPTIONS FURTHER.
CONFIDENTIAL ACCORDING TO OUR SOURCES, THE DUPTIES MADE LITTLE
PROGRESS. THE APPROACH RETAINING THE MOST ATTENTION
INVOLVED CENTRAL BANK SALES AND PURCHASES ON THE FREE
MARKET, TRANSACTIONS AMONG CENTRAL BANKS AT AGREED
PRICES AND EXCLUSION OF GOLD FROM INTRA-EC SETTLEMENTS.
THE APRIL 4-5 MONETARY COMMITTEE MEETING IS IN PREPARA-
TION FOR AN INFORMAL MEETING ON GOLD OF THE FINANCE
MINISTERS OF THE NINE IN THE HAGUE APRIL 22-23. END
SUMMARY.
2. PERM REP SOURCES HAVE TOLD THE MISSION THAT THE MARCH 22 MEETING OF THE DEPUTIES OF THE MONETARY COMMITTEE MADE LITTLE PROGRESS ON A COMMON EC POSITION ON GOLD. THE BASIS FOR THE DISCUSSION WAS A PAPER PREPARED BY THE SECRETARIAT OF THE MONETARY COMMITTEE IN THE FORM OF A DRAFT REPORT FOR ADOPTION BY THE FULL COMMITTEE ON APRIL 5. THE SECRETARIAT HAD PREPARED THIS PAPER FOLLOWING THE MONETARY COMMITTEE DISCUSSION REPORTED IN REF A. THE PAPER DISCUSSES THE CURRENT STATE OF THE COMMITEE'S EXAMINATION OF VARIOUS FORMULAS FOR THE MOBLIZATION OF THE GOLD PORTION OF OFFICIAL RESERVES. THE PAPER NARROWS DOWN A SERIES OF OPTIONS DISCUSSED IN A PAPER BY OSSOLA (POUCHED TO RPE AND TREASURY) PREPARED FOR THE MONETARY COMMITTEE MEETING FEBRUARY 4-5.
3. ACCORDING TO OUR SOURCES, THE DUPUTIES REJECTED THE SECRETARIAT PAPER AS INADEQUATE AND ASKED THAT IT BE REDRAFTED TO NARROW DOWN FURTHER THE NUMBER OF OPTIONS AND TO ELABORATE IN GREATER DETAIL ON THE CONSEQUENCES OF THEIR EVENTUAL ADOPTION--PARTICULARLY THE BROAD ECONOMIC AND POLITICAL CONSEQUENCES. IT IS WORTH NOTING, HOWEVER, THAT THE PAPER CONFIRMS THE INFORMATION REPORTED IN REF A THAT THE MONETARY COMMITTEE BELIEVES INTERNATIONAL- TYPE FORMULAS ARE PREFERABLE IN PRINCIPLE TO REGIONAL ARRANGEMENTS IN THAT THE FORMER DEAL MORE RELAISTICALLY WITH THE CURRENT PROBLEM OF BALANCE OF PAYMENTSDEFICITS BETWEEN THE COMMUNITY AND THE OUTSIDE WORLD. THE PAPER STATES THAT THE COMMITTEE RECOGNIZES, HOWEVER, THAT WORLD-WIDE FORMULAS ARE UNLIKELY AT THIS TIME AND THAT, CONSEQUENTLY, "COMMUNITY" ARRANGEMENTS CANNOT BE RULED OUT.
4. THE FORMULA THAT IS NOW GIVEN SOME CHANCE OF EVENTUAL SUPPORT BY THE NINE IS ONE DESCRIBED TO US AS A DANISH PROPOSAL. IT WOULD ALLOW CENTRAL BANKS TO BUY AND SELL GOLD ON THE FREE MARKET AND ENGAGE IN GOLD TRANSACTIONS AMONG EACH OTHER AT AGREED-ON PRICES, WITH AN OPTION TO RE-PURCHASE THE GOLD AT A FIXED PRICE. GOLD WOULD NOT BE MENTIONED IN THE EUROPEAN MONETARY COOPERATION FUND'S RULES FOR INTR-EC SETTLEMENTS. THESE WOULD DEAL ONLY WITH FOREIGN EXHANGE, SDRS, AND POSSIBLY IMF POSITIONS. GOLD WOULD ALSO BE ELIMINATED FROM ANY FORMULA FOR RESERVE POOLING WITHING THE EC. THIS PROPOSAL WOULD APPEAR TO CONTAIN ELEMENTS OF OPTIONS 3 AND 5 IN THE SECRETARIAT PAPER (REF C).
5. ACCORDING TO OUR INFORMATIONS, THE PURPOSE OF THE MONETARY COMMITTEE MEETING APRIL 4-5 IS TO PREPARE FOR THE INFORMAL MEETING OF THE EC FINANCE MINISTERS (THE NINE) IN THE NETHERLANDS APRIL 22-23. IT SHOULD BE NOTED THAT THE MEETING OF THE MINISTERS OF FINANCE OF THE SNAKE CURRENCIES ON APRIL 10 IN COPENHAGEN (REF C) IS AN EXTRA- COMMUNITY UNDERTAKING. THE SECRETARIAT OF THE MONETARY COMMITTEE IS NOT INVOLVED IN THE MEETINGS OF THE MINI- SNAKE COUNTRIES AND, INDEED, HAS HAD DIFFICULTY KEEPING INFORMED OF THE RESULTS OF THESE MEETINGS.
6. THE "BRI" REFERRED TO UNDER OPTION B (INVOLVING TRANSFERS OF GOLD AGAINST DOLLARS AND OTHER MEANS OF SETTLEMENT) OF THE SECRETARIAT PAPER (REF C) IS THE BANK FOR INTERNATIONAL SETTLEMENTS (BANQUE POUR LES REGLEMENTS INTERNATIONAUX). GREENWALD
Source: https://www.wikileaks.org/plusd/cables/1974ROME01847_b.html
Summary: Timeline overview
2. PERM REP SOURCES HAVE TOLD THE MISSION THAT THE MARCH 22 MEETING OF THE DEPUTIES OF THE MONETARY COMMITTEE MADE LITTLE PROGRESS ON A COMMON EC POSITION ON GOLD. THE BASIS FOR THE DISCUSSION WAS A PAPER PREPARED BY THE SECRETARIAT OF THE MONETARY COMMITTEE IN THE FORM OF A DRAFT REPORT FOR ADOPTION BY THE FULL COMMITTEE ON APRIL 5. THE SECRETARIAT HAD PREPARED THIS PAPER FOLLOWING THE MONETARY COMMITTEE DISCUSSION REPORTED IN REF A. THE PAPER DISCUSSES THE CURRENT STATE OF THE COMMITEE'S EXAMINATION OF VARIOUS FORMULAS FOR THE MOBLIZATION OF THE GOLD PORTION OF OFFICIAL RESERVES. THE PAPER NARROWS DOWN A SERIES OF OPTIONS DISCUSSED IN A PAPER BY OSSOLA (POUCHED TO RPE AND TREASURY) PREPARED FOR THE MONETARY COMMITTEE MEETING FEBRUARY 4-5.
3. ACCORDING TO OUR SOURCES, THE DUPUTIES REJECTED THE SECRETARIAT PAPER AS INADEQUATE AND ASKED THAT IT BE REDRAFTED TO NARROW DOWN FURTHER THE NUMBER OF OPTIONS AND TO ELABORATE IN GREATER DETAIL ON THE CONSEQUENCES OF THEIR EVENTUAL ADOPTION--PARTICULARLY THE BROAD ECONOMIC AND POLITICAL CONSEQUENCES. IT IS WORTH NOTING, HOWEVER, THAT THE PAPER CONFIRMS THE INFORMATION REPORTED IN REF A THAT THE MONETARY COMMITTEE BELIEVES INTERNATIONAL- TYPE FORMULAS ARE PREFERABLE IN PRINCIPLE TO REGIONAL ARRANGEMENTS IN THAT THE FORMER DEAL MORE RELAISTICALLY WITH THE CURRENT PROBLEM OF BALANCE OF PAYMENTSDEFICITS BETWEEN THE COMMUNITY AND THE OUTSIDE WORLD. THE PAPER STATES THAT THE COMMITTEE RECOGNIZES, HOWEVER, THAT WORLD-WIDE FORMULAS ARE UNLIKELY AT THIS TIME AND THAT, CONSEQUENTLY, "COMMUNITY" ARRANGEMENTS CANNOT BE RULED OUT.
4. THE FORMULA THAT IS NOW GIVEN SOME CHANCE OF EVENTUAL SUPPORT BY THE NINE IS ONE DESCRIBED TO US AS A DANISH PROPOSAL. IT WOULD ALLOW CENTRAL BANKS TO BUY AND SELL GOLD ON THE FREE MARKET AND ENGAGE IN GOLD TRANSACTIONS AMONG EACH OTHER AT AGREED-ON PRICES, WITH AN OPTION TO RE-PURCHASE THE GOLD AT A FIXED PRICE. GOLD WOULD NOT BE MENTIONED IN THE EUROPEAN MONETARY COOPERATION FUND'S RULES FOR INTR-EC SETTLEMENTS. THESE WOULD DEAL ONLY WITH FOREIGN EXHANGE, SDRS, AND POSSIBLY IMF POSITIONS. GOLD WOULD ALSO BE ELIMINATED FROM ANY FORMULA FOR RESERVE POOLING WITHING THE EC. THIS PROPOSAL WOULD APPEAR TO CONTAIN ELEMENTS OF OPTIONS 3 AND 5 IN THE SECRETARIAT PAPER (REF C).
5. ACCORDING TO OUR INFORMATIONS, THE PURPOSE OF THE MONETARY COMMITTEE MEETING APRIL 4-5 IS TO PREPARE FOR THE INFORMAL MEETING OF THE EC FINANCE MINISTERS (THE NINE) IN THE NETHERLANDS APRIL 22-23. IT SHOULD BE NOTED THAT THE MEETING OF THE MINISTERS OF FINANCE OF THE SNAKE CURRENCIES ON APRIL 10 IN COPENHAGEN (REF C) IS AN EXTRA- COMMUNITY UNDERTAKING. THE SECRETARIAT OF THE MONETARY COMMITTEE IS NOT INVOLVED IN THE MEETINGS OF THE MINI- SNAKE COUNTRIES AND, INDEED, HAS HAD DIFFICULTY KEEPING INFORMED OF THE RESULTS OF THESE MEETINGS.
6. THE "BRI" REFERRED TO UNDER OPTION B (INVOLVING TRANSFERS OF GOLD AGAINST DOLLARS AND OTHER MEANS OF SETTLEMENT) OF THE SECRETARIAT PAPER (REF C) IS THE BANK FOR INTERNATIONAL SETTLEMENTS (BANQUE POUR LES REGLEMENTS INTERNATIONAUX). GREENWALD
| References to this document in other cables | References in this document to other cables |
|---|---|
| 1974BONN05053 1974BRUSSE02032 1974ECBRU02208 | 1974ECBRU01531 1974LONDON03530 1975LONDON03530 1976LONDON03530 |
Source: https://www.wikileaks.org/plusd/cables/1974ROME01847_b.html
Summary: Timeline overview
Monetary gold wikileaks - 1974ROME01282_b
1. SUMMARY. DURING DISCUSSION ON JANUARY 28, BANK OF
ITALY VICE DIRECTOR GENERAL OSSOLA WAS UNCHARACTERISTICALLY PESSIMISTIC BOTH ABOUT FINANCING OF INDUSTRIAL CONTRIES
DEFICITS DUE TO RISING OIL IMPORT BILL AND ABOUT ITALY'S
OWN FINANCING PROBLEM. HE REGRETTED ABSENCE OF STRONGER
EUROPEAN LEADERSHIP AND BETTER EUROPEAN COORDINATION.
HE THOUGHT VARIETY OF FINANCING SOURCES SHOULD BE
EXPLORED INCLUDING INTRA-EC GOLD SETTLEMENTS AT MARKET-
RELATED PRICES. END SUMMARY
2. TREASURY ATTACHE VISITED OSSOLA JANUARY 28 TO DIS- CUSS POST C-20 INTERNATIONAL FINANCIAL SITUATION. OSSOLA WAS NOT HIS USUAL EBULIENT SELF AND WAS VERY PESSIMISTIC ABOUT PRESENT SITUATION. HE LAMENTED ABSENCE OF STRONG LEADERSHIP IN EUROPEAN COUNTRIES AND HOPED THAT U.S. INITIATIVES, INCLUDING FEBRUARY 11 ENERGY CONFERENCE, COULD HELP TO FILL VOID. HE REGRETTED MOVEMENT TOWARD BILATERAL OIL DEALS AND COMPETITIVE DEVALUATIONS BUT SAID THAT ONCE PATTERN HAD BEGUN, EACH COUNTRY WAS FORCED TO FOLLOW SUIT.
3. OSSOLA WAS EQUALLY WORRIED ABOUT ITALY'S 1974 ACCOUNT DEFICIT WAS EXPECTED TO BE ABOUT $6 BILLION OF WHICH $3.5 BILLION WOULD BE DUE TO ENERGY CRISIS. BANK WAS CONTINUING TO SEEK FINANCING IN EURO-MARKET WHILE BEING FORCED TO INTERVENE FROM DAY TO DAY TO AVOID A SHARP DECLINE IN LIRE. HE THOUGHT THAT TOTAL INTERVENTION IN JANUARY MIGHT REACH $1 BILLION. (PRELIMINARY MONETARY MOVEMENT DATA FOR JANUARY 1-15 INDICATE OVERALL DEFICIT OF $238 MILLION, WITH OFFICIAL GOLD AND FOREIGN CURRENCY RESERVES FALLING BY $421 MILLION. DIFFERENCE BETWEEN TWO FIGURES MAINLY ACCOUNTED FOR BY REDUCTION IN COMMERCIAL BANKS NET FOREIGN LIABILITIES AND RED- UCTION IN SHORT-TERM LIABILITIES OF BANK OF ITALY RESULTING FROM PARTIAL REPAYMENT OF 1973 BORROWING FROM BELGIAN NATIONAL BANK.)
4. OSSOLA RETURNED TO WELL-KNOWN ITALIAN THEME OF NEED TO OBTAIN AGREEMENT FOR SETTLEMENT OF INTRA- EC DEBTS IN GOLD AT MARKET RELATED PRICE. HE POINTED OUT THAT HE HAD ADVISED U.S. OF MOVE IN THIS DIRECTION, PERHAPS 18 MONTHS AGO, AND THAT HE HOPED THAT AGREEMENT COULD BE REACHED AMONG ALL MAJOR INDUSTRIAL COUNTRIES (INCLUDING U.S. ) IN WAY SO AS NOT TO PREJUDGE EVENTUAL RESOLUTION OF LONG-TERM GOLD PRICE PROBLEM. OSSOLA CLEARLY MEANT TO BE SURE THAT U.S. WERE AWARE OF GROWING PRESSURE FOR SOME KIND OF AGREEMENT (MAYBE EVEN WITHOUT U.S. CONCURRENCE) FOR GOLD SETTLEMENTS, AT LEAST WITHIN EC. AGREEMENT MIGHT BE PRECIPITATED BY RISING DEFICITS IN ITALY AND IN OTHER EC COUNTRIES WHICH HAVE A LARGE PART OF THEIR RESERVES IN FORM OF GOLD. OSSOLA THROUGH THAT EVEN IF IMBALANCES WERE NOT MAINLY AMONG EC COUNTRIES BUT WITH OIL-PRODUCING COUNTRIES OUTSIDE EC, AGREEMENT ON GOLD PRICE QUESTION INSIDE EC MIGHT PERMIT REDISTRIBUTION OF DOLLAR HOLDINGS OF EC COUNTRIES WHICH COULD THEN BE USED FOR SETTLEMENTS WITH OIL PRODUCERS. IN OTHER WORDS, IF PRICE WERE RIGHT, ITALIANS AND FRENCH MIGHT BE ABLE TO DRAW UPON GERMANY'S LARGE FOREIGN CORRENCY RESERVES THROUGH SALES OF GOLD TO GERMANY OR THROUGH SALES OF GOLD TO EUROPEAN MONETARY COOPERATION FUND IN SOME WAY SO AS TO PERMIT INDIRECT ACCESS TO GERMANY'S DOLLAR RESERVES.
5. OSSOLA SAID THAT EC MONETARY COMMITTEE WOULD DISCUSS GOLD PRICE QUESTION AND OTHER MATTERS AT ITS FEBRUARY 4-5 MEETING. HE WOULD URGE COMMITTEE TO EXAMINE TOGETHER ALL SOURCES OF FINANCING OF EXPECTED EC DEFICITS, INCOUDING PERHAPS SOME COORDINATION OF EC COUNTRIES, RESORT TO EURO-MARKET BORROWING. WHILE OSSOLA BELIEVED IN LONGER RUN PHASING OUT OF GOLD FROM INTERNATIONAL SYSTEM, HE THOUGHT THAT INTERIM SOLUTION OF GOLD PRICE PROBLEM COULD BE JUSTIFIED, SINCE SO MANY OTHER MATTERS OF PRINCIPLE CONCERNING MONETARY REFORM HAVE ALREADY BEEN SET ASIDE BY VIRTURE OF NECESSITY. HE HOPED THAT OTHER COUNTRIES WOULD NOT BE DOGMATIC ON GOLD PRICE QUESTION.
6. OSSOLA NOTED THAT NEXT OPPORTUNITY FOR DISCUSSION OF THESE FINANCIAL ISSUES AT MINISTERIAL LEVEL WOULD SEEM TO BE AT FEBRUARY 11 ENERGY MEETING IN WASHINGTON. HE WAS PREPARED TO ATTEND MEETING AS PART OF ITALIAN DELEGATION TO DISCUSS INTERNATIONAL FINANCIAL ASPECTS OF ENERGY QUESTION IF FOREIGN MINISTER MORO WERE TO INVITE HIM. HE DID NOT KNOW WHETHER DECISION HAD BEEN TAKEN ON COMPOSITION OF ITALIAN DELEGATION SO AS TO INCLUDE ANYONE FROM FINANCIAL MINISTRIES (E.G., TREASURY MINISTER LA MALFA) OR FROM BANK OF ITALY. VOLPE
Source: https://www.wikileaks.org/plusd/cables/1974ROME01282_b.html
Summary: Timeline overview
2. TREASURY ATTACHE VISITED OSSOLA JANUARY 28 TO DIS- CUSS POST C-20 INTERNATIONAL FINANCIAL SITUATION. OSSOLA WAS NOT HIS USUAL EBULIENT SELF AND WAS VERY PESSIMISTIC ABOUT PRESENT SITUATION. HE LAMENTED ABSENCE OF STRONG LEADERSHIP IN EUROPEAN COUNTRIES AND HOPED THAT U.S. INITIATIVES, INCLUDING FEBRUARY 11 ENERGY CONFERENCE, COULD HELP TO FILL VOID. HE REGRETTED MOVEMENT TOWARD BILATERAL OIL DEALS AND COMPETITIVE DEVALUATIONS BUT SAID THAT ONCE PATTERN HAD BEGUN, EACH COUNTRY WAS FORCED TO FOLLOW SUIT.
3. OSSOLA WAS EQUALLY WORRIED ABOUT ITALY'S 1974 ACCOUNT DEFICIT WAS EXPECTED TO BE ABOUT $6 BILLION OF WHICH $3.5 BILLION WOULD BE DUE TO ENERGY CRISIS. BANK WAS CONTINUING TO SEEK FINANCING IN EURO-MARKET WHILE BEING FORCED TO INTERVENE FROM DAY TO DAY TO AVOID A SHARP DECLINE IN LIRE. HE THOUGHT THAT TOTAL INTERVENTION IN JANUARY MIGHT REACH $1 BILLION. (PRELIMINARY MONETARY MOVEMENT DATA FOR JANUARY 1-15 INDICATE OVERALL DEFICIT OF $238 MILLION, WITH OFFICIAL GOLD AND FOREIGN CURRENCY RESERVES FALLING BY $421 MILLION. DIFFERENCE BETWEEN TWO FIGURES MAINLY ACCOUNTED FOR BY REDUCTION IN COMMERCIAL BANKS NET FOREIGN LIABILITIES AND RED- UCTION IN SHORT-TERM LIABILITIES OF BANK OF ITALY RESULTING FROM PARTIAL REPAYMENT OF 1973 BORROWING FROM BELGIAN NATIONAL BANK.)
4. OSSOLA RETURNED TO WELL-KNOWN ITALIAN THEME OF NEED TO OBTAIN AGREEMENT FOR SETTLEMENT OF INTRA- EC DEBTS IN GOLD AT MARKET RELATED PRICE. HE POINTED OUT THAT HE HAD ADVISED U.S. OF MOVE IN THIS DIRECTION, PERHAPS 18 MONTHS AGO, AND THAT HE HOPED THAT AGREEMENT COULD BE REACHED AMONG ALL MAJOR INDUSTRIAL COUNTRIES (INCLUDING U.S. ) IN WAY SO AS NOT TO PREJUDGE EVENTUAL RESOLUTION OF LONG-TERM GOLD PRICE PROBLEM. OSSOLA CLEARLY MEANT TO BE SURE THAT U.S. WERE AWARE OF GROWING PRESSURE FOR SOME KIND OF AGREEMENT (MAYBE EVEN WITHOUT U.S. CONCURRENCE) FOR GOLD SETTLEMENTS, AT LEAST WITHIN EC. AGREEMENT MIGHT BE PRECIPITATED BY RISING DEFICITS IN ITALY AND IN OTHER EC COUNTRIES WHICH HAVE A LARGE PART OF THEIR RESERVES IN FORM OF GOLD. OSSOLA THROUGH THAT EVEN IF IMBALANCES WERE NOT MAINLY AMONG EC COUNTRIES BUT WITH OIL-PRODUCING COUNTRIES OUTSIDE EC, AGREEMENT ON GOLD PRICE QUESTION INSIDE EC MIGHT PERMIT REDISTRIBUTION OF DOLLAR HOLDINGS OF EC COUNTRIES WHICH COULD THEN BE USED FOR SETTLEMENTS WITH OIL PRODUCERS. IN OTHER WORDS, IF PRICE WERE RIGHT, ITALIANS AND FRENCH MIGHT BE ABLE TO DRAW UPON GERMANY'S LARGE FOREIGN CORRENCY RESERVES THROUGH SALES OF GOLD TO GERMANY OR THROUGH SALES OF GOLD TO EUROPEAN MONETARY COOPERATION FUND IN SOME WAY SO AS TO PERMIT INDIRECT ACCESS TO GERMANY'S DOLLAR RESERVES.
5. OSSOLA SAID THAT EC MONETARY COMMITTEE WOULD DISCUSS GOLD PRICE QUESTION AND OTHER MATTERS AT ITS FEBRUARY 4-5 MEETING. HE WOULD URGE COMMITTEE TO EXAMINE TOGETHER ALL SOURCES OF FINANCING OF EXPECTED EC DEFICITS, INCOUDING PERHAPS SOME COORDINATION OF EC COUNTRIES, RESORT TO EURO-MARKET BORROWING. WHILE OSSOLA BELIEVED IN LONGER RUN PHASING OUT OF GOLD FROM INTERNATIONAL SYSTEM, HE THOUGHT THAT INTERIM SOLUTION OF GOLD PRICE PROBLEM COULD BE JUSTIFIED, SINCE SO MANY OTHER MATTERS OF PRINCIPLE CONCERNING MONETARY REFORM HAVE ALREADY BEEN SET ASIDE BY VIRTURE OF NECESSITY. HE HOPED THAT OTHER COUNTRIES WOULD NOT BE DOGMATIC ON GOLD PRICE QUESTION.
6. OSSOLA NOTED THAT NEXT OPPORTUNITY FOR DISCUSSION OF THESE FINANCIAL ISSUES AT MINISTERIAL LEVEL WOULD SEEM TO BE AT FEBRUARY 11 ENERGY MEETING IN WASHINGTON. HE WAS PREPARED TO ATTEND MEETING AS PART OF ITALIAN DELEGATION TO DISCUSS INTERNATIONAL FINANCIAL ASPECTS OF ENERGY QUESTION IF FOREIGN MINISTER MORO WERE TO INVITE HIM. HE DID NOT KNOW WHETHER DECISION HAD BEEN TAKEN ON COMPOSITION OF ITALIAN DELEGATION SO AS TO INCLUDE ANYONE FROM FINANCIAL MINISTRIES (E.G., TREASURY MINISTER LA MALFA) OR FROM BANK OF ITALY. VOLPE
Source: https://www.wikileaks.org/plusd/cables/1974ROME01282_b.html
Summary: Timeline overview
Monetary gold wikileaks - 1973ROME09110_b
1. /SUMMARY/: AT TWO-DAY CONFERENCE HELD IN SIENA CONCERNING
INFLATION AND RFORM OF INTERNATIONAL MONETARY SYSTEM,
RINALDO OSSOLA, VICE DIRECTOR OF BANK OR ITALY, EXPRESSED
OPINION THAT NAIROBI MEETING OF IMF IN SEPTEMBER WOULD BE
BEGINNING RATHER THAN CONCLUSION OF MONETARY NEGOTIATIONS
AND THAT REFORM WOULD TAKE ABOUT TWO MORE YEARS TO REALIZE.
/END SUMMARY/.
2. TWO-DAY CONFERENCE ON INTERNATIONAL MONETARY REFORM ORGANIZED BY INTERNATIONAL CENTER FOR MONETARY AND BANKING STUDIES OF GENEVA NAD MONTE DEI PASCHI DI SIENA, PRESTIGIOUS PRIVATE ITALIAN BANK, WAS HELD IN RENAISSANCE PALAZZO OF CANADIAN ECONOMIST, ROBERT MUNDELL, A FEW MILES OUTSIDE SIENA ON AUGUST 31 AND SEPTEMBER 1. CONFERENCE WAS ATTENDED BY REPUTABLE ACADEMIC ECONOMISTS FROM EUROPE AND THE U.S. AS WELL AS BY OFFICIALS FROM BANK OF ITALY.
3. DISCUSSIONS DURING CONFERENCE CENTERED ON WELL-KNOWN THEMES OF DOLLAR CONVERTIBILITY, CONSOLIDATION OF DOLLAR OVER-HANG, ROLE OF GOLD AND SDR'S, ADJUSTMENT MCHANISM AND FUTURE ROLE OF DOLLAR. PRESS REPORTS INDICATE THAT CONFERENCE PRODUCED NO SURPRISES, ALTHOUGH AGREEMENT ON A SUMMARY DOCUMENT TO BE SENT TO IMF MEETING IN NAIROBI APPARENTLY ECOUNTERED SOME OBSTACLES AND HAS NOT YET BEEN MADE PUBLIC.
4. DURING CONFERENCE OSSOLA COMMENTED ON TIME FRAME FOR INTERNATIONAL MONETARY REFORM BY SAYING THAT PARTICIPANTS AT ANNUAL IMF MEETING WOULD BE EXAMINING DOCUMENT WHICH WILL BE PUT TOGETHER BY C-20 DEPUTIES IN PARIS SHORTLY OUTLINING VARIOUS COUNTRIES POSITIONS. WORK WOULD CONTINUE DURING 1974 ON BASIS OF INSTRUCTIONS ISSUED AT SEPTEMBER MEETING. ALTHOUGH INFORMAL AGREEMENT ON MONETARY REFORM MIGHT BE REACHED BY MID-1974, FORMAL AGREEMENT WOULD HAVE TO WAIT UNTIL NEXT ANNUAL IMF MEETING IN WASHINGTON IN SEPTEMBER 1974. REFORM WOULD THEREFORE TAKE SOME TWO YEARS AFTER NAIROBI TO REALIZE.
VOLPE
Source: https://www.wikileaks.org/plusd/cables/1973ROME09110_b.html
Summary: Timeline overview
2. TWO-DAY CONFERENCE ON INTERNATIONAL MONETARY REFORM ORGANIZED BY INTERNATIONAL CENTER FOR MONETARY AND BANKING STUDIES OF GENEVA NAD MONTE DEI PASCHI DI SIENA, PRESTIGIOUS PRIVATE ITALIAN BANK, WAS HELD IN RENAISSANCE PALAZZO OF CANADIAN ECONOMIST, ROBERT MUNDELL, A FEW MILES OUTSIDE SIENA ON AUGUST 31 AND SEPTEMBER 1. CONFERENCE WAS ATTENDED BY REPUTABLE ACADEMIC ECONOMISTS FROM EUROPE AND THE U.S. AS WELL AS BY OFFICIALS FROM BANK OF ITALY.
3. DISCUSSIONS DURING CONFERENCE CENTERED ON WELL-KNOWN THEMES OF DOLLAR CONVERTIBILITY, CONSOLIDATION OF DOLLAR OVER-HANG, ROLE OF GOLD AND SDR'S, ADJUSTMENT MCHANISM AND FUTURE ROLE OF DOLLAR. PRESS REPORTS INDICATE THAT CONFERENCE PRODUCED NO SURPRISES, ALTHOUGH AGREEMENT ON A SUMMARY DOCUMENT TO BE SENT TO IMF MEETING IN NAIROBI APPARENTLY ECOUNTERED SOME OBSTACLES AND HAS NOT YET BEEN MADE PUBLIC.
4. DURING CONFERENCE OSSOLA COMMENTED ON TIME FRAME FOR INTERNATIONAL MONETARY REFORM BY SAYING THAT PARTICIPANTS AT ANNUAL IMF MEETING WOULD BE EXAMINING DOCUMENT WHICH WILL BE PUT TOGETHER BY C-20 DEPUTIES IN PARIS SHORTLY OUTLINING VARIOUS COUNTRIES POSITIONS. WORK WOULD CONTINUE DURING 1974 ON BASIS OF INSTRUCTIONS ISSUED AT SEPTEMBER MEETING. ALTHOUGH INFORMAL AGREEMENT ON MONETARY REFORM MIGHT BE REACHED BY MID-1974, FORMAL AGREEMENT WOULD HAVE TO WAIT UNTIL NEXT ANNUAL IMF MEETING IN WASHINGTON IN SEPTEMBER 1974. REFORM WOULD THEREFORE TAKE SOME TWO YEARS AFTER NAIROBI TO REALIZE.
VOLPE
Source: https://www.wikileaks.org/plusd/cables/1973ROME09110_b.html
Summary: Timeline overview
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