• Economics

CRF: assets of 5.7 billion at the end of 2019

5 August 2020 - 7h32

The Constitutional Reserve Fund (CRF) should, this year, be used to finance the budget deficit generated by the covid 19 crisis. A deficit reduced from 477 million to 270 million in the amending budget which was tabled on June 30 on the National Council office. The CRF is, in fact, as IMSEE reminds us, which devotes its development in the 2020 “Monaco in figures”, the “nest egg” of the Monegasque state.

In this publication, the Institute for Statistics recalls that the CRF created by the 1962 Constitution is “an autonomous accounting entity with its own assets and enjoying a special status”. Its income consists of the excess of revenue over expenditure of the budget as well as income from the management of its assets and the sale of its assets while conversely its expenditure includes the excess of expenditure over revenue of the budget as well as the expenses of the various managements or the purchases of goods.

It should be noted that under a sovereign ordinance of last November, the CRF now includes a canton dedicated to covering civil servants’ retirement commitments.

Strong progress last year

The evolution of the CRF assets and their amount are therefore closely monitored by the Government, elected officials but not only… At the end of last year, its net assets were close to 5.7 billion (against 5.2 billion a year earlier). It includes three items: the gold reserve, the available part, and the so-called illiquid part.

The gold reserve was in the order of 250 million at the end of the year, the available part 2.5 billion and the illiquid part 2.9 billion. The cash is made up of securities from financial investments and bank cash and can precisely be used to finance the budget deficit if there is one. Its value could only vary according to movements in the markets following the covid crisis, but moderately because it is the subject of prudent management, as regularly underlined by the Government advisor-Minister of Finance and Economy, Jean Castellini.

Buildings and participations

As for the illiquid part, it is mainly composed of buildings whose value was estimated at the end of the year at 1.72 billion knowing that the revaluation of real estate is based on the BT01 construction index. These are real estate located in Monaco or in neighboring municipalities, with the exception of embassies. The vast majority of these buildings generate rental income since they are occupied by businesses, trades or individuals. In this illiquid part, there are also state holdings. Including 47.9% of the capital of SBM. A proportion which increased following the repurchase of shares which appeared previously in the accounts of the budget which still held 16.3% of the capital at the end of last year. This item includes State holdings in other companies such as the concessionaires SMEG, SMEAUX, the operating company of the Grimaldi Forum or the operating company of the Ports of Monaco. In contrast, the state’s 50% stake in Monaco Télécom is held by the budget. Finally, it is specified that the CRF, “when necessary, makes cash advances to the state budget”.

The links between the CRF and the budget and its role lead elected officials, in particular Jean-Louis Grinda, chairman of the committee of the monitoring of the CRF and the modernisation of public accounts, to ask that it be endowed with legal personality and clarification of its use.


© Direction de la communication

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