Answer given by Mr Hahn on behalf of the European Commission
3.5.2021
In June 2014, the European Central Bank was the first major central bank to lower one of its interest rates into negative. It has gradually lowered the deposit facility rate until it reached ‐0.5% in September 2019; any deposit in EUR generating negative interest.
Tools available to the Commission to limit negative interest are limited. Without possibility to invest in financial products, the interest management strategy focuses on adequate cash planning and forecasting and just-in-time payments[1].
The vast part of these cash and cash equivalents (EUR 15.5 billion at year-end 2019) is kept on the Commission’s Own Resources accounts held at national treasuries and central banks[2], kept free of charges.
For treasury operations, a small amount of cash is kept on accounts opened in central and commercial banks. This generated EUR 246 805.99 negative interest in 2019 (i.e. less than 0.0002% of 2019 payment appropriations). The applied rate was comprised between ‐0.45 and ‐0.5%.
Other financial operations require keeping deposits to cover the Commission’s financial obligations and generate negative interest. For fiduciary accounts supporting financial instruments’ implementation, EUR 2 682 537.54 negative interest were charged to the Commission in 2019. In addition, EUR 2 451 365.52 negative interest were charged to the European Fund for Strategic Investments, the European Fund for Sustainable Development and the fund created to manage fines imposed and provisionally cashed.
The Commission does not maintain a comprehensive overview of the negative interest paid by other institutions, agencies and bodies. No additional negative interest was generated for the 18 EU bodies benefiting from the treasury services of the Commission in 2019.