CFA franc becomes eco: “France only responds to demand”
It is today that France ratifies the Monetary Cooperation Agreement concluded a year ago, on 21 December 2019, by Paris and the states of the West African Monetary Union. This agreement marks the conversion of the CFA franc, which will be echoed while maintaining the fixed parity with the euro. France withdraws its representatives from monetary governing bodies such as the BCEAO and no longer requires the deposit of foreign exchange reserves with the French treasury. LREM deputy Jean-François Mbaye, rapporteur for this ratification proposal, is Carine Frenk’s guest.
What will change after this ratification?
Jean-François Mbaye: There are two things that will change. The first is that France will no longer sit on the Monetary Policy Council of the Central Bank of West African States. Then there is the second thing that will finally happen very quickly, the closure of the Treasury’s current account, where 50% of the African reserves were placed, which was in this account for the Treasury and was paid at 0.75%.
But France continues to guarantee the fixed parity between the eco, the new West African currency and the euro …
Absolutely. As it currently does with the CFA franc. It must be said that this is first and foremost a request from the African states themselves, and it must be said that this issue of guaranteeing the currency, guaranteeing convertibility, allows when there are unstable situations in many countries to continue to support the economy in some way and that the country can face a number of challenges.
But do you know that for those who support real monetary liberation, this is the point that proves that the cord is not cut, that the reform is incomplete?
We can hear that. This is something that is unfortunately still being discussed and I have to say that France has only responded to a request to guarantee the conversion of the CFA franc into euros, even in the event of depreciation. of the European currency. So it is obviously with this new change, an enormous financial responsibility that France will take on, and once again knows that the reserve exchange rate between the reserves will no longer be on the French treasury.
What is France’s interest in maintaining this firm parity then?
In addition to supporting the economy of the sub-region, there are obviously, and I say this without wooden language, our interests in particular in preserving the large companies that are used to being in this zone. -the. And so there is really a desire to also preserve a currency that is stable enough to allow trading even for our French companies that are based abroad.
Following a report published in September by the Senate Finance Committee, Senator Nathalie Goulet at RFI declared that this reform was only cosmetic: “You have a car,” she explained, “you change body. CFA franc and you call it eco, but the engine remains the same. ”Do you agree with this image?
No, we can not refrain from saying that it is only cosmetic, firstly because a monetary zone does not already happen overnight; then we will only be able to succeed in this reform if the political choices that will be made by the officials of the states concerned are relevant. And that is why African states, parliaments, public opinion and civil society must say what they want to do on this issue. You can not continue to blame someone for doing makeup if you do not get to the bottom of it yourself. To date, we have no African Parliament that has done this material work that the French Parliament has done, that is, the passage in committee with a report for opinion in the Finance Committee, with a report to the Senate published, with a Foreign Affairs Committee that examined it mainly and a section of a public session of the National Assembly that will register the ratification of this agreement. There is not a single parliament in the UMOA zone that has done that, not one. And France is criticized for making up this item. The interparliamentary committee in the UMOA zone does not even address this issue. The Central Bank of West African States does not even address this issue. We can not blame France, we go head to head! When you have such a sensitive subject, so important because we are still talking about monetary sovereignty, it seems important to me that our African parliamentary colleagues and friends can also discuss this issue in more depth.
Should this agreement be seen as a first step?
That must be the first step. Now the reflection must be set around a certain number of principles. So let’s stop saying that it’s cosmetics, let’s lay, if I dare say so, the first stone through this agreement that is being reviewed, let’s open the field of perspective for regional integration, let’s open the perspective of construction. of the single currency, let us reflect on the convergence of economies, but all this is for Parliament and African states to take advantage of. Once the reflection has been set at their level, France will of course respond. Today, there is no African state in the UMOA zone with which we have entered into this agreement that explicitly asks us to no longer guarantee CFA francs. Nobody asks us, in any case, not as far as I know.