# C_2015081EN.01000301.xml

| 9.3.2015 | EN | Official Journal of the European Union | C 81/3 |
| -------- | -- | -------------------------------------- | ------ |

---

Request for a preliminary ruling from the Ustavno sodišče (Slovenia) lodged on 20 November 2014 — Tadej Kotnik and others, Jože Sedonja and others, Fondazione cassa di risparmio di Imola, Imola, Italian Republic, Andrej Pipuš in Dušanka Pipuš, Tomaž Štrukelj, Luka Jukič, Angel Jaromil, Franc Marušič and others, Stajka Skrbinšek, Janez Forte and others, Marija Pipuš, Državni svet Republike Slovenije, Varuh človekovih pravic Republike Slovenije v Državni zbor Republike Slovenije

(Case C-526/14)

(2015/C 081/04)

Language of the case: Slovenian

Referring court

Ustavno sodišče

Parties to the main proceedings

Applicants: Tadej Kotnik and others, Jože Sedonja and others, Fondazione cassa di risparmio di Imola, Imola, Italian Republic, Andrej Pipuš in Dušanka Pipuš, Tomaž Štrukelj, Luka Jukič, Angel Jaromil, Franc Marušič and others, Stajka Skrbinšek, Janez Forte and others, Marija Pipuš, Državni svet Republike Slovenije, Varuh človekovih pravic Republike Slovenije

Defendant: Državni zbor Republike Slovenije

Questions referred

| 1. | (a)
Having regard to the legal effects actually produced by the Banking Communication( 1 ), and given that the European Union has exclusive competence in the State aid sector, in accordance with Article 3(1)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), and the Commission has competence to give decisions relating to the State aid sector, pursuant to Article 108 TFEU, must the Banking Communication be regarded as binding on Member States seeking to remedy a serious disturbance in the economy by granting State aid to credit institutions where such aid is intended to be permanent and cannot be easily revoked? (b)
Are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid intended to remedy a serious disturbance in the national economy conditional upon compliance with the requirement to write off capital, hybrid capital and subordinated debt and/or to convert into capital hybrid capital instruments and subordinated debt instruments, in order to limit the amount of aid to the minimum necessary in the light of the need to take account of the moral hazard — compatible with Articles 107 TFEU, 108 TFEU and 109 TFEU, in so far as they exceed the Commission’s competence, as defined in those TFEU provisions on State aid? (c)
If Question 2 is answered in the negative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital and/or convert into capital, in so far as that requirement relates to shares (capital), hybrid capital instruments and subordinated debt instruments issued before the publication of the Banking Communication, all or some of which, at the time they were issued, could have been written off without any provision for compensation only in the event of the bank’s collapse — compatible with the principle of the protection of legitimate expectations enshrined in EU law? (d)
If Question 2 is answered in the negative and Question 3 in the affirmative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital, hybrid capital and subordinated debt instruments and/or to convert into capital hybrid capital instruments and subordinated debt instruments, without the initiation and conclusion of an insolvency procedure by which the debtor’s assets may be liquidated by means of judicial proceedings in which the holders of subordinated financial instruments would have the opportunity to participate as parties to the proceedings — compatible with the right to property enshrined in Article 17(1) of the Charter of Fundamental Rights of the European Union? (e)
If Question 2 is answered in the negative and Questions 3 and 4 in the affirmative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital, hybrid capital and subordinated debt instruments and/or to convert into capital hybrid capital instruments and subordinated debt instruments, in so far as the implementation of those measures calls for a reduction and/or increase in the base capital of public limited liability companies on the basis of the decision of the competent administrative body, not that of the general meeting of shareholders of the public limited liability company — compatible with Articles 29, 34, 35 and 40 to 42 of Directive 2012/30/EU of the European Parliament and of the Council of 25 October 2012 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 54 of the Treaty on the Functioning of the European Union, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent( 2 )? (f)
With regard to paragraph 19 of the Banking Communication, in particular the requirement laid down in that provision to respect fundamental rights, to paragraph 20, and to the affirmation of the requirement, in principle, laid down in paragraphs 43 and 44 of the communication, to convert or write down hybrid capital and subordinated debt instruments before granting State aid, may the Banking Communication be interpreted as meaning that those measures do not require Member States seeking to remedy a serious disturbance in their economy by granting State aid to credit institutions to impose an obligation to adopt such conversion and writing down measures as a condition for the grant of State aid on the basis of Article 107(3)(b) TFEU, or as meaning that, in order to be able to grant State aid, it is sufficient that the conversion or writing down measure should merely operate in a manner that is proportionate? | (a) | Having regard to the legal effects actually produced by the Banking Communication( 1 ), and given that the European Union has exclusive competence in the State aid sector, in accordance with Article 3(1)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), and the Commission has competence to give decisions relating to the State aid sector, pursuant to Article 108 TFEU, must the Banking Communication be regarded as binding on Member States seeking to remedy a serious disturbance in the economy by granting State aid to credit institutions where such aid is intended to be permanent and cannot be easily revoked? | (b) | Are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid intended to remedy a serious disturbance in the national economy conditional upon compliance with the requirement to write off capital, hybrid capital and subordinated debt and/or to convert into capital hybrid capital instruments and subordinated debt instruments, in order to limit the amount of aid to the minimum necessary in the light of the need to take account of the moral hazard — compatible with Articles 107 TFEU, 108 TFEU and 109 TFEU, in so far as they exceed the Commission’s competence, as defined in those TFEU provisions on State aid? | (c) | If Question 2 is answered in the negative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital and/or convert into capital, in so far as that requirement relates to shares (capital), hybrid capital instruments and subordinated debt instruments issued before the publication of the Banking Communication, all or some of which, at the time they were issued, could have been written off without any provision for compensation only in the event of the bank’s collapse — compatible with the principle of the protection of legitimate expectations enshrined in EU law? | (d) | If Question 2 is answered in the negative and Question 3 in the affirmative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital, hybrid capital and subordinated debt instruments and/or to convert into capital hybrid capital instruments and subordinated debt instruments, without the initiation and conclusion of an insolvency procedure by which the debtor’s assets may be liquidated by means of judicial proceedings in which the holders of subordinated financial instruments would have the opportunity to participate as parties to the proceedings — compatible with the right to property enshrined in Article 17(1) of the Charter of Fundamental Rights of the European Union? | (e) | If Question 2 is answered in the negative and Questions 3 and 4 in the affirmative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital, hybrid capital and subordinated debt instruments and/or to convert into capital hybrid capital instruments and subordinated debt instruments, in so far as the implementation of those measures calls for a reduction and/or increase in the base capital of public limited liability companies on the basis of the decision of the competent administrative body, not that of the general meeting of shareholders of the public limited liability company — compatible with Articles 29, 34, 35 and 40 to 42 of Directive 2012/30/EU of the European Parliament and of the Council of 25 October 2012 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 54 of the Treaty on the Functioning of the European Union, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent( 2 )? | (f) | With regard to paragraph 19 of the Banking Communication, in particular the requirement laid down in that provision to respect fundamental rights, to paragraph 20, and to the affirmation of the requirement, in principle, laid down in paragraphs 43 and 44 of the communication, to convert or write down hybrid capital and subordinated debt instruments before granting State aid, may the Banking Communication be interpreted as meaning that those measures do not require Member States seeking to remedy a serious disturbance in their economy by granting State aid to credit institutions to impose an obligation to adopt such conversion and writing down measures as a condition for the grant of State aid on the basis of Article 107(3)(b) TFEU, or as meaning that, in order to be able to grant State aid, it is sufficient that the conversion or writing down measure should merely operate in a manner that is proportionate? |
| --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| (a) | Having regard to the legal effects actually produced by the Banking Communication( 1 ), and given that the European Union has exclusive competence in the State aid sector, in accordance with Article 3(1)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), and the Commission has competence to give decisions relating to the State aid sector, pursuant to Article 108 TFEU, must the Banking Communication be regarded as binding on Member States seeking to remedy a serious disturbance in the economy by granting State aid to credit institutions where such aid is intended to be permanent and cannot be easily revoked? | | | | | | | | | | | | |
| (b) | Are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid intended to remedy a serious disturbance in the national economy conditional upon compliance with the requirement to write off capital, hybrid capital and subordinated debt and/or to convert into capital hybrid capital instruments and subordinated debt instruments, in order to limit the amount of aid to the minimum necessary in the light of the need to take account of the moral hazard — compatible with Articles 107 TFEU, 108 TFEU and 109 TFEU, in so far as they exceed the Commission’s competence, as defined in those TFEU provisions on State aid? | | | | | | | | | | | | |
| (c) | If Question 2 is answered in the negative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital and/or convert into capital, in so far as that requirement relates to shares (capital), hybrid capital instruments and subordinated debt instruments issued before the publication of the Banking Communication, all or some of which, at the time they were issued, could have been written off without any provision for compensation only in the event of the bank’s collapse — compatible with the principle of the protection of legitimate expectations enshrined in EU law? | | | | | | | | | | | | |
| (d) | If Question 2 is answered in the negative and Question 3 in the affirmative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital, hybrid capital and subordinated debt instruments and/or to convert into capital hybrid capital instruments and subordinated debt instruments, without the initiation and conclusion of an insolvency procedure by which the debtor’s assets may be liquidated by means of judicial proceedings in which the holders of subordinated financial instruments would have the opportunity to participate as parties to the proceedings — compatible with the right to property enshrined in Article 17(1) of the Charter of Fundamental Rights of the European Union? | | | | | | | | | | | | |
| (e) | If Question 2 is answered in the negative and Questions 3 and 4 in the affirmative, are paragraphs 40 to 46 of the Banking Communication — which make the possibility of granting State aid conditional on the requirement to write off capital, hybrid capital and subordinated debt instruments and/or to convert into capital hybrid capital instruments and subordinated debt instruments, in so far as the implementation of those measures calls for a reduction and/or increase in the base capital of public limited liability companies on the basis of the decision of the competent administrative body, not that of the general meeting of shareholders of the public limited liability company — compatible with Articles 29, 34, 35 and 40 to 42 of Directive 2012/30/EU of the European Parliament and of the Council of 25 October 2012 on coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 54 of the Treaty on the Functioning of the European Union, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent( 2 )? | | | | | | | | | | | | |
| (f) | With regard to paragraph 19 of the Banking Communication, in particular the requirement laid down in that provision to respect fundamental rights, to paragraph 20, and to the affirmation of the requirement, in principle, laid down in paragraphs 43 and 44 of the communication, to convert or write down hybrid capital and subordinated debt instruments before granting State aid, may the Banking Communication be interpreted as meaning that those measures do not require Member States seeking to remedy a serious disturbance in their economy by granting State aid to credit institutions to impose an obligation to adopt such conversion and writing down measures as a condition for the grant of State aid on the basis of Article 107(3)(b) TFEU, or as meaning that, in order to be able to grant State aid, it is sufficient that the conversion or writing down measure should merely operate in a manner that is proportionate? | | | | | | | | | | | | |

| 2. | May the seventh indent of Article 2 of Directive 2001/24/EC( 3 ) be interpreted as meaning that the measures requiring burden sharing by shareholders and subordinated creditors provided for in paragraphs 40 to 46 of the Banking Communication (write-down of Common Equity Tier 1, hybrid capital, subordinated debt instruments and the conversion into capital of hybrid capital instruments and subordinated debt instruments) may also be classified as reorganisation measures? |
| -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |

---

( 1 )  Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis (‘Banking Communication’) (OJ 2013 C 216, p. 1).

( 2 )  OJ 2012 L 315.

( 3 )  Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and winding up of credit institutions (OJ 2001 L 125).

---