1.

2.

1.

The European Council in its Resolution of 16 June 1997 (hereinafter the ‘Resolution’) agreed to set up an exchange rate mechanism (hereinafter ‘ERM II’) when the third stage of Economic and Monetary Union began on 1 January 1999. Under the terms of the Resolution, ERM II is designed to help ensure that non-euro area Member States participating in ERM II orient their policies to stability, foster convergence and thereby help the non-euro area Member States in their efforts to adopt the euro. As referred to in the recitals to the Resolution, the operating procedures of ERM II were to be laid down in an agreement between the European Central Bank and the national central banks of the Member States outside the euro area.

2.

The Bank of England is party to the Agreement of 16 March 2006 between the European Central Bank and the national central banks of the Member States outside the euro area laying down the operating procedures for an exchange rate mechanism in stage three of Economic and Monetary Union (1), as amended by the Agreement of 21 December 2006 (2), by the Agreement of 14 December 2007 (3), by the Agreement of 8 December 2008 (4), by the Agreement of 13 December 2010 (5), by the Agreement of 21 June 2013 (6), by the Agreement of 6 December 2013 (7) and by the Agreement of 13 November 2014 (8) (hereinafter collectively referred to as the ‘ERM II Central Bank Agreement’).

3.

On 29 March 2017, the United Kingdom of Great Britain and Northern Ireland (the ‘United Kingdom’) submitted the notification of its intention to withdraw from the European Union pursuant to Article 50 of the Treaty on European Union. According to this Article, the Treaty on European Union and the Treaty on the Functioning of the European Union are to cease to apply to the United Kingdom from the date of entry into force of a withdrawal agreement or, failing that, two years after that notification, i.e. from 30 March 2019, unless the European Council, in agreement with the United Kingdom, unanimously decides to extend that period.

4.

By European Council Decision (EU) 2019/476 taken in agreement with the United Kingdom of 22 March 2019 extending the period under Article 50(3) TEU (9), among others, the European Council decided to extend that period until 12 April 2019.

5.

By European Council Decision (EU) 2019/584 taken in agreement with the United Kingdom of 11 April 2019 extending the period under Article 50(3) TEU (10), among others, the European Council decided to further extend that period, as extended by European Council Decision (EU) 2019/476, until 31 October 2019.

6.

By European Council Decision (EU) 2019/1810 taken in agreement with the United Kingdom of 29 October 2019 extending the period under Article 50(3) TEU (11), among others, the European Council decided to further extend that period until 31 January 2020.

7.

Following the withdrawal of the United Kingdom from the European Union from 1 February 2020, the Bank of England (BoE) ceases to be a national central bank of a Member State. Therefore, as from that moment, the BoE cannot be a party to the ERM II Central Bank Agreement. It is necessary to amend the ERM II Central Bank Agreement to reflect the departure of the BoE from the ERM II Central Bank Agreement. It is also necessary to replace Annex II ‘Ceilings on Access to the Very Short-Term Financing Facility Referred to in Articles 8, 10 and 11 of the Central Bank Agreement’ (hereinafter ‘Annex II’) to take account of this departure.

8.

This Agreement should only apply from 1 February 2020 if, as at that date, the BoE is not a national central bank of a Member State,