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
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