§ Under the terms of the Anglo-Belgian Monetary Agreement which was signed on 14th November, 1947, and which will with one modification, continue to provide the mechanism for payments between the sterling area and the Belgian monetary area during the period from 1st January, 1948, to 30th June, 1949, it was agreed that Belgium should hold sterling within a maximum of £27 million. The inflow of sterling to the National Bank of Belgium was such that this limit was passed and the United 1890 Kingdom was obliged to sell gold to obtain its requirements of Belgian francs. As this state of affairs could not be allowed to continue, the Belgian Government were asked to discuss what measures could be taken to avoid any further drain on our gold reserves, which would not at the same time lead to a dislocation of Anglo-Belgian trade.
§ It has now been agreed that, although trade exchanges should be maintained at the highest possible level, payments between the two monetary areas should be regulated in such a way that they should be brought into balance as soon as possible, and indeed show some balance in favour of the sterling area over the period of eighteen months ending on 30th June, 1949, thus avoiding further losses of gold by the United Kingdom. It was recognised, however, that although the two Governments would introduce measures to make this policy effective as soon as possible, some further sales of gold by the United Kingdom might be unavoidable in the near future. In that event, the United Kingdom will have the right to repurchase later in the period the gold sold after 1st March, 1948, when payments move in favour of the sterling area and provided that the level of Belgian exports to the United Kingdom is maintained in accordance with the agreed programme. Under this programme, the United Kingdom is to receive increased quantities of steel, and also flex, fertilisers, copper and other essential raw materials and manufactured goods from Belgium and the Belgian Congo.
§ The Belgian Government have agreed that the Belgian market is ready to admit imports from the sterling area to the greatest possible extent, and it is hoped that sterling area exporters will take full advantage of this. Exports of coal from the United Kingdom to Belgium will be resumed, and there is no doubt that a wide range of United Kingdom exports will find their way to the Belgian market.
§ In addition, in order to assist in bringing payments into equilibrium, the Belgian Government have agreed that they will, over the period of eighteen months, restrict drastically the acceptance of sterling from countries outside the sterling area.
§ When payments have been brought into balance and any gold losses have been 1891 recouped to the United Kingdom the two Governments will consider whether there is room for increasing these acceptances of sterling from outside the sterling area, or whether additional imports can be licensed from the Belgian monetary area. For this purpose, and for the general supervision of the new arrangements, an Anglo-Belgian Joint Committee will be set up and will meet regularly. The first meeting will take place this week.