The euro has the potential to also be a complete strategic success in the future  1. The euro has the potential to become a major reserve currency as an alternative to the US dollar  The euro is already the second most widely-used international currency in the global monetary and financial system. But, 18 months after the introduction of the single currency, it is fair to say that while the euro has become the first financing/issuing currency in the world, it has not so far made the same progress as a reserve/investment currency. The low level of interest rates in continental Europe has fostered the international financing role of the euro (euro-denominated bonds accounted for some 45% of new issues in 1999 which, as I mentioned earlier, somewhat exceeds the market share of new USD-denominated bonds). Conversely, these relatively low remuneration rates have reduced the role of the euro as a reserve currency (in central bank portfolios) or, more generally, as an investment currency (in private investors’ portfolios). Since the launch of the single currency, the low level of interest rates in the euro area and the continuous depreciation of the euro have temporarily slowed down the emergence of the euro as a major reserve currency. This leads me to say a few words on the depreciation of the euro in the past 18 months. 2.
This Banque de France view is now widely shared by the central banking community  1. Concerning gold holdings:  The ECB’s decision in July 1998 to hold 15% of its reserves in gold, taken from the gold stocks of the national central banks, was generally seen as a positive signal in a market hitherto inhibited by fears that governments might decide upon new gold sales. This was evidence that gold remains an important element of global monetary reserves. 2. Concerning gold selling and gold lending:  The Banque de France and the Bundesbank have been a driving force behind the 1999 joint statement on gold, which is fully consistent with our traditional position. And I quote: –  “The undersigned institutions will not enter the market as sellers, with the exception of already decided sales. –  The gold sales already decided will be achieved through a concerted programme of sales over the next 5 years. Annual sales will not exceed approximately 400 tons and total sales over this period will not exceed 2,000 tons. –  The signatories of this agreement have agreed not to expand their gold lendings and the use of gold futures and options over the period.” (End quote.) The so-called “Washington Agreement” has clarified the intentions of the Eurosystem as well as of the Sveriges Riksbank, the Swiss National Bank and the Bank of England with respect to their gold holdings.