# 62021CJ0045

JUDGMENT OF THE COURT (Grand Chamber)

13 September 2022 (
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(Reference for a preliminary ruling – European System of Central Banks – National central bank – Directive 2001/24/EC – Reorganisation and winding up of credit institutions – Compensation for damage resulting from the adoption of reorganisation measures – Article 123 TFEU and Article 21.1 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank – Prohibition of monetary financing of Member States in the euro area – Article 130 TFEU and Article 7 of that protocol – Independence – Disclosure of confidential information)

In Case C‐45/21,

REQUEST for a preliminary ruling under Article 267 TFEU from the Ustavno sodišče (Constitutional Court, Slovenia), made by decision of 14 January 2021, received at the Court on 28 January 2021, in the proceedings

Banka Slovenije,

Banka Slovenije,

other party:

Državni zbor Republike Slovenije,

Državni zbor Republike Slovenije,

THE COURT (Grand Chamber),

composed of K. Lenaerts, President, L. Bay Larsen (Rapporteur), Vice-President, A. Arabadjiev, C. Lycourgos, E. Regan and S. Rodin, Presidents of Chambers, M. Ilešič, J.‐C. Bonichot, M. Safjan, A. Kumin, D. Gratsias, M.L. Arastey Sahún, M. Gavalec, Z. Csehi and O. Spineanu-Matei, Judges,

Advocate General: J. Kokott,

Registrar: M. Longar, Administrator,

having regard to the written procedure and further to the hearing on 18 January 2022,

after considering the observations submitted on behalf of:

| – | Banka Slovenije, by J. Žitko, acting as Agent, |
| --- | --- |

–

Banka Slovenije, by J. Žitko, acting as Agent,

| – | the Slovenian Government, by J. Morela and N. Pintar Gosenca, acting as Agents, |
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–

the Slovenian Government, by J. Morela and N. Pintar Gosenca, acting as Agents,

| – | the European Commission, by S. Delaude, B. Rous Demiri and A. Steiblytė, acting as Agents, |
| --- | --- |

–

the European Commission, by S. Delaude, B. Rous Demiri and A. Steiblytė, acting as Agents,

| – | the European Central Bank, by A. Grosu, K. Kaiser and C. Kroppenstedt, acting as Agents, and by G. Pajek, odvetnik, |
| --- | --- |

–

the European Central Bank, by A. Grosu, K. Kaiser and C. Kroppenstedt, acting as Agents, and by G. Pajek, odvetnik,

after hearing the Opinion of the Advocate General at the sitting on 31 March 2022,

gives the following

Judgment

Judgment

| 1 | This request for a preliminary ruling concerns the interpretation of Articles 123 and 130 TFEU, Articles 7 and 21 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank (‘the Protocol on the ESCB and the ECB’), Articles 44 to 52 of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (OJ 2006 L 177, p. 1), and Articles 53 to 62 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ 2013 L 176, p. 338). |
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1

This request for a preliminary ruling concerns the interpretation of Articles 123 and 130 TFEU, Articles 7 and 21 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank (‘the Protocol on the ESCB and the ECB’), Articles 44 to 52 of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (OJ 2006 L 177, p. 1), and Articles 53 to 62 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ 2013 L 176, p. 338).

| 2 | The request has been made in proceedings for review of the constitutionality of national legislative provisions defining the conditions for the liability of Banka Slovenije (Central Bank of Slovenia) for damage caused by the cancellation of certain financial instruments and access to certain information relating to that cancellation, held by that central bank. |
| --- | --- |

2

The request has been made in proceedings for review of the constitutionality of national legislative provisions defining the conditions for the liability of Banka Slovenije (Central Bank of Slovenia) for damage caused by the cancellation of certain financial instruments and access to certain information relating to that cancellation, held by that central bank.

Legal context

Legal context

Regulation (EC) No 3603/93

Regulation (EC) No 3603/93

| 3 | The second recital of Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred to in Article [123 TFEU] and [Article 125(1) TFEU] (OJ 1993 L 332, p. 1) is worded as follows:
  ‘Whereas the terms “overdraft facilities” and “other types of credit facility” used in Article [123 TFEU] should be defined, particularly with reference to the treatment of claims existing at 1 January 1994’. |
| --- | --- |

3

The second recital of Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred to in Article [123 TFEU] and [Article 125(1) TFEU] (OJ 1993 L 332, p. 1) is worded as follows:

‘Whereas the terms “overdraft facilities” and “other types of credit facility” used in Article [123 TFEU] should be defined, particularly with reference to the treatment of claims existing at 1 January 1994’.

| 4 | Article 1(1) of that regulation provides:
  ‘For the purposes of Article [123 TFEU]:





  (a) | “overdraft facilities” means any provision of funds to the public sector resulting or likely to result in a debit balance; |
| --- | --- | --- |

4

Article 1(1) of that regulation provides:

‘For the purposes of Article [123 TFEU]:

(a)

“overdraft facilities” means any provision of funds to the public sector resulting or likely to result in a debit balance;

| (b) | “other type of credit facility” means:





  (i) | any claim against the public sector existing at 1 January 1994, except for fixed-maturity claims acquired before that date; |
| --- | --- | --- |

(b)

“other type of credit facility” means:

(i)

any claim against the public sector existing at 1 January 1994, except for fixed-maturity claims acquired before that date;

| (ii) | any financing of the public sector’s obligations vis-à-vis third parties; |
| --- | --- |

(ii)

any financing of the public sector’s obligations vis-à-vis third parties;

vis-à-vis

| (iii) | without prejudice to Article [123(2) TFEU], any transaction with the public sector resulting or likely to result in a claim against that sector.’ |
| --- | --- |

(iii)

without prejudice to Article [123(2) TFEU], any transaction with the public sector resulting or likely to result in a claim against that sector.’

Directive 2000/12/EC

Directive 2000/12/EC

| 5 | Article 1(4) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (OJ 2000 L 126, p. 1) stated:
  ‘For the purposes of this Directive:
  ...





  4. | “competent authorities” shall mean the national authorities which are empowered by law or regulation to supervise credit institutions’. |
| --- | --- | --- |

5

Article 1(4) of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions (OJ 2000 L 126, p. 1) stated:

‘For the purposes of this Directive:

...

4.

“competent authorities” shall mean the national authorities which are empowered by law or regulation to supervise credit institutions’.

Directive 2001/24/EC

Directive 2001/24/EC

| 6 | Under recital 6 of 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, p. 15):
  ‘The administrative or judicial authorities of the home Member State must have sole power to decide upon and to implement the reorganisation measures provided for in the law and practices in force in that Member State. Owing to the difficulty of harmonising Member States’ laws and practices, it is necessary to establish mutual recognition by the Member States of the measures taken by each of them to restore to viability the credit institutions which it has authorised.’ |
| --- | --- |

6

Under recital 6 of 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, p. 15):

‘The administrative or judicial authorities of the home Member State must have sole power to decide upon and to implement the reorganisation measures provided for in the law and practices in force in that Member State. Owing to the difficulty of harmonising Member States’ laws and practices, it is necessary to establish mutual recognition by the Member States of the measures taken by each of them to restore to viability the credit institutions which it has authorised.’

| 7 | Article 2 of that directive, in the version applicable to the facts of the main proceedings, provided:
  ‘For the purposes of this Directive:
  ...





  – | “competent authorities” shall mean the competent authorities within the meaning of Article 1, point (4) of Directive [2000/12]; |
| --- | --- | --- |

7

Article 2 of that directive, in the version applicable to the facts of the main proceedings, provided:

‘For the purposes of this Directive:

...

–

“competent authorities” shall mean the competent authorities within the meaning of Article 1, point (4) of Directive [2000/12];

...’

| 8 | Article 3(1) of Directive 2001/24 provides:
  ‘The administrative or judicial authorities of the home Member State shall alone be empowered to decide on the implementation of one or more reorganisation measures in a credit institution, including branches established in other Member States.’ |
| --- | --- |

8

Article 3(1) of Directive 2001/24 provides:

‘The administrative or judicial authorities of the home Member State shall alone be empowered to decide on the implementation of one or more reorganisation measures in a credit institution, including branches established in other Member States.’

| 9 | Article 33 of that directive is worded as follows:
  ‘All persons required to receive or divulge information in connection with the information or consultation procedures laid down in Articles 4, 5, 8, 9, 11 and 19 shall be bound by professional secrecy, in accordance with the rules and conditions laid down in Article 30 of Directive [2000/12], with the exception of any judicial authorities to which existing national provisions apply.’ |
| --- | --- |

9

Article 33 of that directive is worded as follows:

‘All persons required to receive or divulge information in connection with the information or consultation procedures laid down in Articles 4, 5, 8, 9, 11 and 19 shall be bound by professional secrecy, in accordance with the rules and conditions laid down in Article 30 of Directive [2000/12], with the exception of any judicial authorities to which existing national provisions apply.’

Directive 2006/48

Directive 2006/48

| 10 | Article 4(4) of Directive 2006/48 provided:
  ‘For the purposes of this Directive, the following definitions shall apply:
  ...





  (4) | “competent authorities” means the national authorities which are empowered by law or regulation to supervise credit institutions’. |
| --- | --- | --- |

10

Article 4(4) of Directive 2006/48 provided:

‘For the purposes of this Directive, the following definitions shall apply:

...

(4)

“competent authorities” means the national authorities which are empowered by law or regulation to supervise credit institutions’.

| 11 | Article 44(1) of that directive provided:
  ‘Member States shall provide that all persons working for or who have worked for the competent authorities, as well as auditors or experts acting on behalf of the competent authorities, shall be bound by the obligation of professional secrecy.
  No confidential information which they may receive in the course of their duties may be divulged to any person or authority whatsoever, except in summary or collective form, such that individual credit institutions cannot be identified, without prejudice to cases covered by criminal law.
  Nevertheless, where a credit institution has been declared bankrupt or is being compulsorily wound up, confidential information which does not concern third parties involved in attempts to rescue that credit institution may be divulged in civil or commercial proceedings.’ |
| --- | --- |

11

Article 44(1) of that directive provided:

‘Member States shall provide that all persons working for or who have worked for the competent authorities, as well as auditors or experts acting on behalf of the competent authorities, shall be bound by the obligation of professional secrecy.

No confidential information which they may receive in the course of their duties may be divulged to any person or authority whatsoever, except in summary or collective form, such that individual credit institutions cannot be identified, without prejudice to cases covered by criminal law.

Nevertheless, where a credit institution has been declared bankrupt or is being compulsorily wound up, confidential information which does not concern third parties involved in attempts to rescue that credit institution may be divulged in civil or commercial proceedings.’

| 12 | Articles 45 to 52 of that directive set out a series of rules governing the use, exchange, transmission and disclosure of information by the competent authorities within the meaning of Article 4(4) of that directive. |
| --- | --- |

12

Articles 45 to 52 of that directive set out a series of rules governing the use, exchange, transmission and disclosure of information by the competent authorities within the meaning of Article 4(4) of that directive.

| 13 | Article 158 of Directive 2006/48 was thus worded as follows:
  ‘1.   [Directive 2000/12] as amended by the Directives set out in Annex XIII, Part A, is hereby repealed without prejudice to the obligations of the Member States concerning the deadlines for transposition of the said Directives listed in Annex XIII, Part B.
  2.   References to the repealed Directives shall be construed as being made to this Directive and should be read in accordance with the correlation table in Annex XIV.’ |
| --- | --- |

13

Article 158 of Directive 2006/48 was thus worded as follows:

‘1.   [Directive 2000/12] as amended by the Directives set out in Annex XIII, Part A, is hereby repealed without prejudice to the obligations of the Member States concerning the deadlines for transposition of the said Directives listed in Annex XIII, Part B.

2.   References to the repealed Directives shall be construed as being made to this Directive and should be read in accordance with the correlation table in Annex XIV.’

Directive 2013/36

Directive 2013/36

| 14 | Article 3(1)(36) of Directive 2013/36 provides:
  ‘For the purposes of this Directive, the following definitions shall apply:
  ...





  (36) | “competent authority” means competent authority as defined in point (40) of Article 4(1) of Regulation (EU) No 575/2013 [of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ 2013 L 176, p. 1)]’. |
| --- | --- | --- |

14

Article 3(1)(36) of Directive 2013/36 provides:

‘For the purposes of this Directive, the following definitions shall apply:

...

(36)

“competent authority” means competent authority as defined in point (40) of Article 4(1) of Regulation (EU) No 575/2013 [of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ 2013 L 176, p. 1)]’.

| 15 | Article 53(1) of that directive is worded as follows:
  ‘Member States shall provide that all persons working for or who have worked for the competent authorities and auditors or experts acting on behalf of the competent authorities shall be bound by the obligation of professional secrecy.
  Confidential information which such persons, auditors or experts receive in the course of their duties may be disclosed only in summary or aggregate form, such that individual credit institutions cannot be identified, without prejudice to cases covered by criminal law.
  Nevertheless, where a credit institution has been declared bankrupt or is being compulsorily wound up, confidential information which does not concern third parties involved in attempts to rescue that credit institution may be disclosed in civil or commercial proceedings.’ |
| --- | --- |

15

Article 53(1) of that directive is worded as follows:

‘Member States shall provide that all persons working for or who have worked for the competent authorities and auditors or experts acting on behalf of the competent authorities shall be bound by the obligation of professional secrecy.

Confidential information which such persons, auditors or experts receive in the course of their duties may be disclosed only in summary or aggregate form, such that individual credit institutions cannot be identified, without prejudice to cases covered by criminal law.

Nevertheless, where a credit institution has been declared bankrupt or is being compulsorily wound up, confidential information which does not concern third parties involved in attempts to rescue that credit institution may be disclosed in civil or commercial proceedings.’

| 16 | Articles 54 to 62 of that directive set out a series of rules governing the use, exchange, transmission and disclosure of information by the competent authorities within the meaning of Article 3(1)(36) of that directive. |
| --- | --- |

16

Articles 54 to 62 of that directive set out a series of rules governing the use, exchange, transmission and disclosure of information by the competent authorities within the meaning of Article 3(1)(36) of that directive.

| 17 | Article 163 of Directive 2013/36 provides:
  ‘Directives [2006/48] and 2006/49/EC [of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (OJ 2006 L 177, p. 201)] are repealed with effect from 1 January 2014.
  References to the repealed Directives shall be construed as references to this Directive and to [Regulation No 575/2013] and shall be read in accordance with the correlation table set out in Annex II to this Directive and in Annex IV to [Regulation No 575/2013].’ |
| --- | --- |

17

Article 163 of Directive 2013/36 provides:

‘Directives [2006/48] and 2006/49/EC [of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (OJ 2006 L 177, p. 201)] are repealed with effect from 1 January 2014.

References to the repealed Directives shall be construed as references to this Directive and to [Regulation No 575/2013] and shall be read in accordance with the correlation table set out in Annex II to this Directive and in Annex IV to [Regulation No 575/2013].’

Regulation No 575/2013

Regulation No 575/2013

| 18 | Article 4(1)(40) of Regulation No 575/2013 provides as follows:
  ‘For the purposes of this Regulation, the following definitions shall apply:
  ...





  (40) | “competent authority” means a public authority or body officially recognised by national law, which is empowered by national law to supervise institutions as part of the supervisory system in operation in the Member State concerned’. |
| --- | --- | --- |

18

Article 4(1)(40) of Regulation No 575/2013 provides as follows:

‘For the purposes of this Regulation, the following definitions shall apply:

...

(40)

“competent authority” means a public authority or body officially recognised by national law, which is empowered by national law to supervise institutions as part of the supervisory system in operation in the Member State concerned’.

The main proceedings and the questions referred for a preliminary ruling

The main proceedings and the questions referred for a preliminary ruling

| 19 | By decision of 19 October 2016, the Ustavno sodišče (Constitutional Court, Slovenia) held that legislative provisions authorising the Central Bank of Slovenia to cancel certain financial instruments when a credit institution is likely to become insolvent and threaten the financial system as a whole were compatible with the Slovenian Constitution. By contrast, that court found a deficiency that was contrary to the Slovenian Constitution, on account of the absence, in the legislation at issue, of special procedural rules concerning actions for damages that may be brought by former holders of cancelled financial instruments. |
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19

By decision of 19 October 2016, the Ustavno sodišče (Constitutional Court, Slovenia) held that legislative provisions authorising the Central Bank of Slovenia to cancel certain financial instruments when a credit institution is likely to become insolvent and threaten the financial system as a whole were compatible with the Slovenian Constitution. By contrast, that court found a deficiency that was contrary to the Slovenian Constitution, on account of the absence, in the legislation at issue, of special procedural rules concerning actions for damages that may be brought by former holders of cancelled financial instruments.

| 20 | In order to remedy that deficiency, the Državni zbor Republike Slovenije (National Assembly of the Republic of Slovenia) adopted the zakon o postopku sodnega in izvensodnega varstva nekdanjih imetnikov kvalificiranih obveznosti bank (Law on the procedure applicable to the judicial and extra-judicial protection of former holders of eligible bank liabilities; ‘the ZPSVIKOB’), which lays down rules for the effective judicial protection of the former holders of financial instruments cancelled by the Central Bank of Slovenia. |
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20

In order to remedy that deficiency, the Državni zbor Republike Slovenije (National Assembly of the Republic of Slovenia) adopted the zakon o postopku sodnega in izvensodnega varstva nekdanjih imetnikov kvalificiranih obveznosti bank (Law on the procedure applicable to the judicial and extra-judicial protection of former holders of eligible bank liabilities; ‘the ZPSVIKOB’), which lays down rules for the effective judicial protection of the former holders of financial instruments cancelled by the Central Bank of Slovenia.

| 21 | The Central Bank of Slovenia made an application for review of the constitutionality of several provisions of the ZPSVIKOB and of a provision of the zakon o bančništvu (Law on Banking), arguing, inter alia, that the rules laid down in those provisions as regards its liability and access to information which it holds were incompatible with EU law. |
| --- | --- |

21

The Central Bank of Slovenia made an application for review of the constitutionality of several provisions of the ZPSVIKOB and of a provision of the zakon o bančništvu (Law on Banking), arguing, inter alia, that the rules laid down in those provisions as regards its liability and access to information which it holds were incompatible with EU law.

| 22 | In that regard, the referring court states that, under the ZPSVIKOB, the liability of the Central Bank of Slovenia for damage caused by the cancellation of certain financial instruments may be incurred under two separate and alternative regimes. |
| --- | --- |

22

In that regard, the referring court states that, under the ZPSVIKOB, the liability of the Central Bank of Slovenia for damage caused by the cancellation of certain financial instruments may be incurred under two separate and alternative regimes.

| 23 | First, that liability may, in principle, be incurred where it is established that the cancellation of a financial instrument did not constitute a measure necessary to prevent the failure of the bank concerned and to ensure the stability of the financial system or that the principle that no creditor may be more disadvantaged than in the event of insolvency has been breached. That said, that liability can be incurred only if the Central Bank of Slovenia does not establish that it or the persons it authorised to act on its behalf acted with due diligence, taking into account the fact that such cancellation takes place in the specific circumstances of a crisis situation requiring a rapid assessment of complex issues. |
| --- | --- |

23

First, that liability may, in principle, be incurred where it is established that the cancellation of a financial instrument did not constitute a measure necessary to prevent the failure of the bank concerned and to ensure the stability of the financial system or that the principle that no creditor may be more disadvantaged than in the event of insolvency has been breached. That said, that liability can be incurred only if the Central Bank of Slovenia does not establish that it or the persons it authorised to act on its behalf acted with due diligence, taking into account the fact that such cancellation takes place in the specific circumstances of a crisis situation requiring a rapid assessment of complex issues.

| 24 | Second, natural persons who previously held a financial instrument that has been cancelled and whose annual income is below a certain threshold may obtain from the Central Bank of Slovenia compensation in an amount equivalent to 80% of the price paid on acquisition of that financial instrument, up to a maximum amount of EUR 20000. |
| --- | --- |

24

Second, natural persons who previously held a financial instrument that has been cancelled and whose annual income is below a certain threshold may obtain from the Central Bank of Slovenia compensation in an amount equivalent to 80% of the price paid on acquisition of that financial instrument, up to a maximum amount of EUR 20000.

| 25 | The referring court also points out that, in order to ensure that the costs arising from the application of the liability regimes established by the ZPSVIKOB are covered, the ZPSVIKOB provides that the profits made by the Central Bank of Slovenia as from 1 January 2019 must be paid into special reserves for the purpose of that cover. If those special reserves were to prove insufficient for that purpose, the Central Bank of Slovenia would have to use up to 50% of its general reserves and then, if the use of those reserves was also insufficient to ensure that cover, it would have to borrow the necessary sums from the Slovenian authorities. |
| --- | --- |

25

The referring court also points out that, in order to ensure that the costs arising from the application of the liability regimes established by the ZPSVIKOB are covered, the ZPSVIKOB provides that the profits made by the Central Bank of Slovenia as from 1 January 2019 must be paid into special reserves for the purpose of that cover. If those special reserves were to prove insufficient for that purpose, the Central Bank of Slovenia would have to use up to 50% of its general reserves and then, if the use of those reserves was also insufficient to ensure that cover, it would have to borrow the necessary sums from the Slovenian authorities.

| 26 | In the light of those factors, that court questions the compatibility of those liability regimes with Article 123 TFEU and Article 21 of the Protocol on the ESCB and the ECB, in so far as the responsibility assumed by the Central Bank of Slovenia in place of the Slovenian authorities could be equated with a form of financing of those authorities, and with the principle of the independence of central banks under Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB. |
| --- | --- |

26

In the light of those factors, that court questions the compatibility of those liability regimes with Article 123 TFEU and Article 21 of the Protocol on the ESCB and the ECB, in so far as the responsibility assumed by the Central Bank of Slovenia in place of the Slovenian authorities could be equated with a form of financing of those authorities, and with the principle of the independence of central banks under Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB.

| 27 | Furthermore, that court notes that the ZPSVIKOB lays down rules relating to the automatic disclosure, to all potential complainants and their representatives, of certain confidential documents which have been used to decide to cancel financial instruments and relating to the publication of a more limited number of such documents. It states that it has doubts as to the compatibility of those rules with the provisions on the confidentiality of certain information set out in Directives 2006/48 and 2013/36. |
| --- | --- |

27

Furthermore, that court notes that the ZPSVIKOB lays down rules relating to the automatic disclosure, to all potential complainants and their representatives, of certain confidential documents which have been used to decide to cancel financial instruments and relating to the publication of a more limited number of such documents. It states that it has doubts as to the compatibility of those rules with the provisions on the confidentiality of certain information set out in Directives 2006/48 and 2013/36.

| 28 | In those circumstances, the Ustavno sodišče (Constitutional Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:





  ‘(1) | Are Article 123 TFEU and Article 21 of [the Protocol on the ESCB and the ECB] to be interpreted as prohibiting a national central bank that is a member of the European System of Central Banks [ESCB] from incurring liability to pay compensation from its own resources to former holders of financial instruments that have been cancelled by decision of the central bank in the exercise of its own statutory power to adopt extraordinary measures in the public interest in order to avert threats to the stability of the financial system, in the event that it transpires in the course of subsequent legal proceedings that, in the context of the cancellation of financial instruments, there was a failure to observe the principle that no holder of a financial instrument should, as a result of an extraordinary measure, be placed in a worse position than he [or she] would have been in had the measure not been adopted, where, in that context, the national central bank is liable (i) for loss that was foreseeable from the facts and circumstances obtaining at the time of the central bank’s decision and of which the bank was aware or ought to have been aware, and (ii) for loss resulting from the conduct of individuals who acted in the exercise of such powers of the central bank and on instructions from it where, in that context, having regard to the facts and circumstances of which they were aware or ought to have been aware in accordance with the powers conferred, those individuals did not act with the diligence of a prudent expert? |
| --- | --- | --- |

28

In those circumstances, the Ustavno sodišče (Constitutional Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘(1)

Are Article 123 TFEU and Article 21 of [the Protocol on the ESCB and the ECB] to be interpreted as prohibiting a national central bank that is a member of the European System of Central Banks [ESCB] from incurring liability to pay compensation from its own resources to former holders of financial instruments that have been cancelled by decision of the central bank in the exercise of its own statutory power to adopt extraordinary measures in the public interest in order to avert threats to the stability of the financial system, in the event that it transpires in the course of subsequent legal proceedings that, in the context of the cancellation of financial instruments, there was a failure to observe the principle that no holder of a financial instrument should, as a result of an extraordinary measure, be placed in a worse position than he [or she] would have been in had the measure not been adopted, where, in that context, the national central bank is liable (i) for loss that was foreseeable from the facts and circumstances obtaining at the time of the central bank’s decision and of which the bank was aware or ought to have been aware, and (ii) for loss resulting from the conduct of individuals who acted in the exercise of such powers of the central bank and on instructions from it where, in that context, having regard to the facts and circumstances of which they were aware or ought to have been aware in accordance with the powers conferred, those individuals did not act with the diligence of a prudent expert?

| (2) | Are Article 123 TFEU and Article 21 of [the Protocol on the ESCB and the ECB] to be interpreted as prohibiting a national central bank that is a member of the ESCB from paying special monetary compensation from its own resources to some of the former holders of financial instruments that have been cancelled (in accordance with the criterion of the asset situation) on account of the cancellation of instruments decided upon by the bank in the exercise of its own statutory power to adopt extraordinary measures in the public interest in order to avert threats to the stability of the financial system, where, in that context, entitlement to receive compensation arises from the mere fact of cancellation of the financial instrument, regardless of whether or not there has been a breach of the principle that no holder of a financial instrument should, as a result of an extraordinary measure, be placed in a worse position than he [or she] would have been in had that measure not been adopted? |
| --- | --- |

(2)

Are Article 123 TFEU and Article 21 of [the Protocol on the ESCB and the ECB] to be interpreted as prohibiting a national central bank that is a member of the ESCB from paying special monetary compensation from its own resources to some of the former holders of financial instruments that have been cancelled (in accordance with the criterion of the asset situation) on account of the cancellation of instruments decided upon by the bank in the exercise of its own statutory power to adopt extraordinary measures in the public interest in order to avert threats to the stability of the financial system, where, in that context, entitlement to receive compensation arises from the mere fact of cancellation of the financial instrument, regardless of whether or not there has been a breach of the principle that no holder of a financial instrument should, as a result of an extraordinary measure, be placed in a worse position than he [or she] would have been in had that measure not been adopted?

| (3) | Are Article 130 TFEU and Article 7 of [the Protocol on the ESCB and the ECB] to be interpreted as meaning that a national central bank cannot be required to pay compensation for losses arising as a result of the exercise of its statutory powers in such sums as might impair the bank’s ability to perform its own tasks effectively? In that context, are the legal conditions under which such liability is incurred relevant to establishing whether the principle of the financial independence of the national central bank has been infringed? |
| --- | --- |

(3)

Are Article 130 TFEU and Article 7 of [the Protocol on the ESCB and the ECB] to be interpreted as meaning that a national central bank cannot be required to pay compensation for losses arising as a result of the exercise of its statutory powers in such sums as might impair the bank’s ability to perform its own tasks effectively? In that context, are the legal conditions under which such liability is incurred relevant to establishing whether the principle of the financial independence of the national central bank has been infringed?

| (4) | Are Articles 53 to 62 of [Directive 2013/36] or Articles 44 to 52 of [Directive 2006/48], which protect the confidentiality of confidential information received or generated in the context of the prudential supervision of banks, to be interpreted in the sense that those two directives also protect the confidentiality of information received or generated in the context of the implementation of measures the purpose of which was to rescue banks in order to ensure the stability of the financial system, where the threats to the solvency and liquidity of the banks could not be eliminated by means of normal prudential supervision measures and where such measures were regarded as reorganisation measures within the meaning of [Directive 2001/24]? |
| --- | --- |

(4)

Are Articles 53 to 62 of [Directive 2013/36] or Articles 44 to 52 of [Directive 2006/48], which protect the confidentiality of confidential information received or generated in the context of the prudential supervision of banks, to be interpreted in the sense that those two directives also protect the confidentiality of information received or generated in the context of the implementation of measures the purpose of which was to rescue banks in order to ensure the stability of the financial system, where the threats to the solvency and liquidity of the banks could not be eliminated by means of normal prudential supervision measures and where such measures were regarded as reorganisation measures within the meaning of [Directive 2001/24]?

| (5) | In the event that [the fourth question] is answered in the affirmative, are Articles 53 to 62 of [Directive 2013/36] or Articles 44 to 52 of [Directive 2006/48], which concern the protection of confidential information received or generated in the context of the prudential supervision of banks, to be interpreted as meaning that, for the purposes of the protection which they afford, the later directive, [Directive 2013/36], is relevant even with regard to information received or generated during the period when [Directive 2006/48] was applicable, where such information is to be disclosed during the period when [Directive 2013/36] is applicable? |
| --- | --- |

(5)

In the event that [the fourth question] is answered in the affirmative, are Articles 53 to 62 of [Directive 2013/36] or Articles 44 to 52 of [Directive 2006/48], which concern the protection of confidential information received or generated in the context of the prudential supervision of banks, to be interpreted as meaning that, for the purposes of the protection which they afford, the later directive, [Directive 2013/36], is relevant even with regard to information received or generated during the period when [Directive 2006/48] was applicable, where such information is to be disclosed during the period when [Directive 2013/36] is applicable?

| (6) | In the event that [the fourth question] is answered in the affirmative, is the first subparagraph of Article 53(1) of [Directive 2013/36] (or the first subparagraph of Article 44(1) of [Directive 2006/48], depending on the answer to the preceding question) to be interpreted as meaning that information held by a national central bank in its capacity as supervisory body that has become public information subsequently to the time of its generation, or information which could constitute a professional secret but which is five or more years old and which, on account of the passage of time, is in principle regarded as historical information that is no longer confidential, is no longer confidential information to which the obligation of professional secrecy applies? In the case of historical information five or more years old, does the maintenance of confidentiality depend on whether confidentiality can be justified on grounds other than the commercial situation of the bank under supervision or that of other undertakings? |
| --- | --- |

(6)

In the event that [the fourth question] is answered in the affirmative, is the first subparagraph of Article 53(1) of [Directive 2013/36] (or the first subparagraph of Article 44(1) of [Directive 2006/48], depending on the answer to the preceding question) to be interpreted as meaning that information held by a national central bank in its capacity as supervisory body that has become public information subsequently to the time of its generation, or information which could constitute a professional secret but which is five or more years old and which, on account of the passage of time, is in principle regarded as historical information that is no longer confidential, is no longer confidential information to which the obligation of professional secrecy applies? In the case of historical information five or more years old, does the maintenance of confidentiality depend on whether confidentiality can be justified on grounds other than the commercial situation of the bank under supervision or that of other undertakings?

| (7) | In the event that [the fourth question] is answered in the affirmative, is the third subparagraph of Article 53(1) of [Directive 2013/36] (or the third subparagraph of Article 44(1) of [Directive 2006/48], depending on the answer to [the fifth question]) to be interpreted as meaning that confidential documents which do not concern third parties involved in attempts to rescue a credit institution but which are legally relevant for the purposes of the court’s decision in a civil damages action against the competent prudential supervisory body should automatically be disclosed, even prior to the commencement of legal proceedings, to all potential plaintiffs and their representatives, without there first being established a specific procedure for determining the lawfulness of the disclosure of each individual document to each individual or entity having standing, and without there first being any weighing of the interests at stake in each specific case? Does that apply even in the case of information concerning credit institutions which have not been declared bankrupt or are not being compulsorily wound up but which have received assistance from the State in the procedure in which financial instruments held by shareholders or subordinated creditors of the credit institution were cancelled? |
| --- | --- |

(7)

In the event that [the fourth question] is answered in the affirmative, is the third subparagraph of Article 53(1) of [Directive 2013/36] (or the third subparagraph of Article 44(1) of [Directive 2006/48], depending on the answer to [the fifth question]) to be interpreted as meaning that confidential documents which do not concern third parties involved in attempts to rescue a credit institution but which are legally relevant for the purposes of the court’s decision in a civil damages action against the competent prudential supervisory body should automatically be disclosed, even prior to the commencement of legal proceedings, to all potential plaintiffs and their representatives, without there first being established a specific procedure for determining the lawfulness of the disclosure of each individual document to each individual or entity having standing, and without there first being any weighing of the interests at stake in each specific case? Does that apply even in the case of information concerning credit institutions which have not been declared bankrupt or are not being compulsorily wound up but which have received assistance from the State in the procedure in which financial instruments held by shareholders or subordinated creditors of the credit institution were cancelled?

| (8) | In the event that [the fourth question] is answered in the affirmative, is the second subparagraph of Article 53(1) of [Directive 2013/36] (or the second subparagraph of Article 44(1) of [Directive 2006/48], depending on the answer to [the fifth question]) to be interpreted as permitting the publication on the Internet, in a manner accessible to all, of confidential documents or summaries of confidential documents which do not concern third parties involved in attempts to rescue a credit institution but which are legally relevant for the purposes of the court’s decision in a civil damages action against the competent prudential supervisory body, in the event that those documents contain information concerning credit institutions which have not been declared bankrupt or are not being compulsorily wound up but which have received help from the State in a procedure in which financial instruments held by shareholders or subordinated creditors of the credit institution were cancelled, where provision is made for the redacting of all confidential information prior to publication on the Internet?’ |
| --- | --- |

(8)

In the event that [the fourth question] is answered in the affirmative, is the second subparagraph of Article 53(1) of [Directive 2013/36] (or the second subparagraph of Article 44(1) of [Directive 2006/48], depending on the answer to [the fifth question]) to be interpreted as permitting the publication on the Internet, in a manner accessible to all, of confidential documents or summaries of confidential documents which do not concern third parties involved in attempts to rescue a credit institution but which are legally relevant for the purposes of the court’s decision in a civil damages action against the competent prudential supervisory body, in the event that those documents contain information concerning credit institutions which have not been declared bankrupt or are not being compulsorily wound up but which have received help from the State in a procedure in which financial instruments held by shareholders or subordinated creditors of the credit institution were cancelled, where provision is made for the redacting of all confidential information prior to publication on the Internet?’

Procedure before the Court

Procedure before the Court

The application for an expedited procedure

The application for an expedited procedure

| 29 | In its order for reference, the referring court requested that the present reference for a preliminary ruling be dealt with under an expedited procedure pursuant to Article 105 of the Rules of Procedure of the Court of Justice. |
| --- | --- |

29

In its order for reference, the referring court requested that the present reference for a preliminary ruling be dealt with under an expedited procedure pursuant to Article 105 of the Rules of Procedure of the Court of Justice.

| 30 | In support of its request, that court notes that only the application of the ZPSVIKOB is capable, as the Slovenian legal system currently stands, of allowing former holders of cancelled financial instruments to obtain compensation and that the actions for damages brought by them have been suspended pending the Court’s response to the present request for a preliminary ruling. As a result, the integrity of the securities market has been threatened and a large number of persons have been denied an effective remedy to defend their right to property for more than six years. Furthermore, since the questions referred concern, inter alia, the prohibition of monetary financing and the principle of independence of national central banks, the Court’s answer would make it possible to remedy uncertainty as to the interpretation of fundamental principles of EU law and Slovenian constitutional law. |
| --- | --- |

30

In support of its request, that court notes that only the application of the ZPSVIKOB is capable, as the Slovenian legal system currently stands, of allowing former holders of cancelled financial instruments to obtain compensation and that the actions for damages brought by them have been suspended pending the Court’s response to the present request for a preliminary ruling. As a result, the integrity of the securities market has been threatened and a large number of persons have been denied an effective remedy to defend their right to property for more than six years. Furthermore, since the questions referred concern, inter alia, the prohibition of monetary financing and the principle of independence of national central banks, the Court’s answer would make it possible to remedy uncertainty as to the interpretation of fundamental principles of EU law and Slovenian constitutional law.

| 31 | Article 105(1) of the Rules of Procedure provides that, at the request of the referring court or tribunal or, exceptionally, of his or her own motion, the President of the Court may, where the nature of the case requires that it be dealt with within a short time, after hearing the Judge-Rapporteur and the Advocate General, decide that a reference for a preliminary ruling is to be determined pursuant to an expedited procedure derogation from the provisions of those rules. |
| --- | --- |

31

Article 105(1) of the Rules of Procedure provides that, at the request of the referring court or tribunal or, exceptionally, of his or her own motion, the President of the Court may, where the nature of the case requires that it be dealt with within a short time, after hearing the Judge-Rapporteur and the Advocate General, decide that a reference for a preliminary ruling is to be determined pursuant to an expedited procedure derogation from the provisions of those rules.

| 32 | In the present case, the President of the Court decided, on 9 February 2021, after hearing the Judge-Rapporteur and the Advocate General, that it was not appropriate to grant the request referred to in paragraph 29 above. |
| --- | --- |

32

In the present case, the President of the Court decided, on 9 February 2021, after hearing the Judge-Rapporteur and the Advocate General, that it was not appropriate to grant the request referred to in paragraph 29 above.

| 33 | It must be borne in mind, in that regard, that such an expedited procedure laid down in Article 105 of the Rules of Procedure is a procedural instrument intended to address matters of exceptional urgency (see, to that effect, judgment of 10 March 2022, Commissioners for Her Majesty’s Revenue and Customs (Comprehensive sickness insurance), C‐247/20, EU:C:2022:177, paragraph 41 and the case-law cited). |
| --- | --- |

33

It must be borne in mind, in that regard, that such an expedited procedure laid down in Article 105 of the Rules of Procedure is a procedural instrument intended to address matters of exceptional urgency (see, to that effect, judgment of 10 March 2022, Commissioners for Her Majesty’s Revenue and Customs (Comprehensive sickness insurance), C‐247/20, EU:C:2022:177, paragraph 41 and the case-law cited).

| 34 | Accordingly, the interest of litigants in determining as quickly as possible the scope of their rights under EU law, while legitimate, is not such as to establish the existence of an exceptional circumstance within the meaning of Article 105(1) of the Rules of Procedure (see, to that effect, judgment of 28 April 2022, Phoenix Contact, C‐44/21, EU:C:2022:309, paragraph 16 and the case-law cited). |
| --- | --- |

34

Accordingly, the interest of litigants in determining as quickly as possible the scope of their rights under EU law, while legitimate, is not such as to establish the existence of an exceptional circumstance within the meaning of Article 105(1) of the Rules of Procedure (see, to that effect, judgment of 28 April 2022, Phoenix Contact, C‐44/21, EU:C:2022:309, paragraph 16 and the case-law cited).

| 35 | Furthermore, the economic sensitivity of a case or economic interests concerned, however important and legitimate they may be, cannot, in themselves, justify recourse to the expedited procedure provided for in Article 105 (see, to that effect, judgment of 28 April 2022, Phoenix Contact, C‐44/21, EU:C:2022:309, paragraph 15 and the case-law cited). Nor is the large number of persons or legal situations which may be affected by the questions referred capable, as such, of constituting an exceptional circumstance justifying the application of that procedure (see, to that effect, judgment of 28 April 2022, Caruter, C‐642/20, EU:C:2022:308, paragraph 22 and the case-law cited). |
| --- | --- |

35

Furthermore, the economic sensitivity of a case or economic interests concerned, however important and legitimate they may be, cannot, in themselves, justify recourse to the expedited procedure provided for in Article 105 (see, to that effect, judgment of 28 April 2022, Phoenix Contact, C‐44/21, EU:C:2022:309, paragraph 15 and the case-law cited). Nor is the large number of persons or legal situations which may be affected by the questions referred capable, as such, of constituting an exceptional circumstance justifying the application of that procedure (see, to that effect, judgment of 28 April 2022, Caruter, C‐642/20, EU:C:2022:308, paragraph 22 and the case-law cited).

| 36 | Although it has been held that, where a case raises serious uncertainties which affect fundamental issues of national constitutional law and EU law, it may be necessary, having regard to the particular circumstances of such a case, to deal with it within a short time pursuant to Article 105(1) of the Rules of Procedure, the fact that the case in the main proceedings is decisive for ensuring the judicial protection of the property rights of former holders of cancelled financial instruments is not, in the light of the very specific circumstances of that case, such as to justify such treatment (see, by analogy, judgment of 3 March 2022, Presidenza del Consiglio dei Ministri and Others (Trainee specialist doctors), C‐590/20, EU:C:2022:150, paragraph 31 and the case-law cited). |
| --- | --- |

36

Although it has been held that, where a case raises serious uncertainties which affect fundamental issues of national constitutional law and EU law, it may be necessary, having regard to the particular circumstances of such a case, to deal with it within a short time pursuant to Article 105(1) of the Rules of Procedure, the fact that the case in the main proceedings is decisive for ensuring the judicial protection of the property rights of former holders of cancelled financial instruments is not, in the light of the very specific circumstances of that case, such as to justify such treatment (see, by analogy, judgment of 3 March 2022, Presidenza del Consiglio dei Ministri and Others (Trainee specialist doctors), C‐590/20, EU:C:2022:150, paragraph 31 and the case-law cited).

| 37 | Similarly, although the initiation of an accelerated procedure may be necessary in order to dispel any uncertainty which may hinder the operation of the ESCB (see, to that effect, order of the President of the Court of 12 June 2018, ECB v Latvia, C‐238/18, not published, EU:C:2018:488, paragraph 14), the existence of such uncertainty cannot be established in the present case, since the questions referred seek only to determine the consequences of acts adopted by the Central Bank of Slovenia in the context of a specific national policy and the functioning of the ESCB is therefore not hindered pending the outcome of the main proceedings. |
| --- | --- |

37

Similarly, although the initiation of an accelerated procedure may be necessary in order to dispel any uncertainty which may hinder the operation of the ESCB (see, to that effect, order of the President of the Court of 12 June 2018, ECB v Latvia, C‐238/18, not published, EU:C:2018:488, paragraph 14), the existence of such uncertainty cannot be established in the present case, since the questions referred seek only to determine the consequences of acts adopted by the Central Bank of Slovenia in the context of a specific national policy and the functioning of the ESCB is therefore not hindered pending the outcome of the main proceedings.

The request for the oral part of the procedure to be reopened

The request for the oral part of the procedure to be reopened

| 38 | By document lodged at the Court Registry on 10 May 2022, the European Central Bank (ECB) requested that the oral part of the procedure be reopened. |
| --- | --- |

38

By document lodged at the Court Registry on 10 May 2022, the European Central Bank (ECB) requested that the oral part of the procedure be reopened.

| 39 | In support of that request, the ECB disagrees with the Advocate General’s Opinion. It argues in particular that that Opinion relies on a broad interpretation of the concept of ‘public sector obligations’ within the meaning of Article 1(1)(b)(ii) of Regulation No 3603/93, which has significant consequences for the general organisation of economic and monetary policy, and that the parties did not have the opportunity to comment on that point at the hearing. |
| --- | --- |

39

In support of that request, the ECB disagrees with the Advocate General’s Opinion. It argues in particular that that Opinion relies on a broad interpretation of the concept of ‘public sector obligations’ within the meaning of Article 1(1)(b)(ii) of Regulation No 3603/93, which has significant consequences for the general organisation of economic and monetary policy, and that the parties did not have the opportunity to comment on that point at the hearing.

| 40 | In that regard, it should be borne in mind, first, that the Statute of the Court of Justice of the European Union and the Rules of Procedure make no provision for parties to submit observations in response to the Advocate General’s Opinion (judgment of 15 July 2021, Commission v Poland (Disciplinary regime for judges), C‐791/19, EU:C:2021:596, paragraph 41). |
| --- | --- |

40

In that regard, it should be borne in mind, first, that the Statute of the Court of Justice of the European Union and the Rules of Procedure make no provision for parties to submit observations in response to the Advocate General’s Opinion (judgment of 15 July 2021, Commission v Poland (Disciplinary regime for judges), C‐791/19, EU:C:2021:596, paragraph 41).

| 41 | Second, under the second paragraph of Article 252 TFEU, the Advocate General, acting with complete impartiality and independence, is to make, in open court, reasoned submissions on cases which, in accordance with the Statute of the Court of Justice of the European Union, require the Advocate General’s involvement. The Court is not bound either by the Advocate General’s conclusion or by the reasoning which led to that conclusion. Consequently, a party’s disagreement with the Advocate General’s Opinion, irrespective of the questions that he or she examines in his or her Opinion, cannot in itself constitute grounds justifying the reopening of the oral part of the procedure (judgment of 15 July 2021, Commission v Poland(Disciplinary regime for judges), C‐791/19, EU:C:2021:596, paragraph 42). |
| --- | --- |

41

Second, under the second paragraph of Article 252 TFEU, the Advocate General, acting with complete impartiality and independence, is to make, in open court, reasoned submissions on cases which, in accordance with the Statute of the Court of Justice of the European Union, require the Advocate General’s involvement. The Court is not bound either by the Advocate General’s conclusion or by the reasoning which led to that conclusion. Consequently, a party’s disagreement with the Advocate General’s Opinion, irrespective of the questions that he or she examines in his or her Opinion, cannot in itself constitute grounds justifying the reopening of the oral part of the procedure (judgment of 15 July 2021, Commission v Poland(Disciplinary regime for judges), C‐791/19, EU:C:2021:596, paragraph 42).

| 42 | Furthermore, it is true that the Court may at any time, after hearing the Advocate General, order the reopening of the oral part of the procedure, in accordance with Article 83 of its Rules of Procedure, in particular if it considers that it lacks sufficient information. |
| --- | --- |

42

Furthermore, it is true that the Court may at any time, after hearing the Advocate General, order the reopening of the oral part of the procedure, in accordance with Article 83 of its Rules of Procedure, in particular if it considers that it lacks sufficient information.

| 43 | In the present case, the Court considers, however, after hearing the Advocate General, that, contrary to what the ECB maintains, it has at its disposal, at the end of the written part of the procedure and the hearing before it, all the information necessary to give a ruling, the interpretation of the concept of ‘public sector obligations’, within the meaning of Article 1(1)(b)(ii) of Regulation No 3603/93, having, in particular, been extensively discussed by the parties. In those circumstances, it is not necessary to order that the oral part of the procedure be reopened. |
| --- | --- |

43

In the present case, the Court considers, however, after hearing the Advocate General, that, contrary to what the ECB maintains, it has at its disposal, at the end of the written part of the procedure and the hearing before it, all the information necessary to give a ruling, the interpretation of the concept of ‘public sector obligations’, within the meaning of Article 1(1)(b)(ii) of Regulation No 3603/93, having, in particular, been extensively discussed by the parties. In those circumstances, it is not necessary to order that the oral part of the procedure be reopened.

Consideration of the questions referred

Consideration of the questions referred

The first question

The first question

| 44 | In the light of the information provided by the referring court concerning the national legislation at issue in the main proceedings, it must be held that, by its first question, the referring court asks, in essence, whether Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable, from its own funds, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, where it is apparent during subsequent court proceedings that:





  – | first, either that cancellation was not necessary in order to ensure the stability of the financial system, or those former holders of financial instruments suffered greater losses as a result of that cancellation than they would have suffered in the event of the insolvency of the financial institution concerned, and |
| --- | --- | --- |

44

In the light of the information provided by the referring court concerning the national legislation at issue in the main proceedings, it must be held that, by its first question, the referring court asks, in essence, whether Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable, from its own funds, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, where it is apparent during subsequent court proceedings that:

–

first, either that cancellation was not necessary in order to ensure the stability of the financial system, or those former holders of financial instruments suffered greater losses as a result of that cancellation than they would have suffered in the event of the insolvency of the financial institution concerned, and

| – | second, that central bank has not established that it or the persons that it authorised to act on its behalf acted with due diligence in the specific circumstances of a crisis situation requiring a rapid assessment of complex issues. |
| --- | --- |

–

second, that central bank has not established that it or the persons that it authorised to act on its behalf acted with due diligence in the specific circumstances of a crisis situation requiring a rapid assessment of complex issues.

| 45 | At the outset, it follows from Article 282(1) TFEU and Articles 1 and 14.3 of the Protocol on the ESCB and the ECB that the ECB, together with the national central banks of the Member States, constitute the ESCB, those national central banks being an integral part of that system. It also follows from those provisions that the ECB and the national central banks of the Member States whose currency is the euro, which constitute the Eurosystem, are to conduct the monetary policy of the European Union (see, to that effect, judgment of 17 December 2020, Commission v Slovenia(ECB archives), C‐316/19, EU:C:2020:1030, paragraph 79). |
| --- | --- |

45

At the outset, it follows from Article 282(1) TFEU and Articles 1 and 14.3 of the Protocol on the ESCB and the ECB that the ECB, together with the national central banks of the Member States, constitute the ESCB, those national central banks being an integral part of that system. It also follows from those provisions that the ECB and the national central banks of the Member States whose currency is the euro, which constitute the Eurosystem, are to conduct the monetary policy of the European Union (see, to that effect, judgment of 17 December 2020, Commission v Slovenia(ECB archives), C‐316/19, EU:C:2020:1030, paragraph 79).

| 46 | In addition, under Article 9.2of the Protocol on the ESCB and the ECB, the tasks conferred on the ESCB are to be implemented either by the ECB itself or by the national central banks. |
| --- | --- |

46

In addition, under Article 9.2of the Protocol on the ESCB and the ECB, the tasks conferred on the ESCB are to be implemented either by the ECB itself or by the national central banks.

| 47 | It must nevertheless be noted that the implementation of reorganisation measures for credit institutions, within the meaning of Directive 2001/24, such as those to which the liability regime referred to in the first question relates, does not constitute a task, under EU law, incumbent on the ESCB, in general, or on the national central banks, in particular. |
| --- | --- |

47

It must nevertheless be noted that the implementation of reorganisation measures for credit institutions, within the meaning of Directive 2001/24, such as those to which the liability regime referred to in the first question relates, does not constitute a task, under EU law, incumbent on the ESCB, in general, or on the national central banks, in particular.

| 48 | Such a task is not included among the basic tasks to be carried out through the ESCB, listed in Article 127(2) TFEU, and in Article 3.1 of the Protocol on the ESCB and the ECB, namely to define and implement the monetary policy of the European Union, conduct foreign exchange operations in accordance with Article 219 TFEU, hold and manage the official foreign reserves of the Member States and promote the smooth operation of payment systems. |
| --- | --- |

48

Such a task is not included among the basic tasks to be carried out through the ESCB, listed in Article 127(2) TFEU, and in Article 3.1 of the Protocol on the ESCB and the ECB, namely to define and implement the monetary policy of the European Union, conduct foreign exchange operations in accordance with Article 219 TFEU, hold and manage the official foreign reserves of the Member States and promote the smooth operation of payment systems.

| 49 | It should also be noted that Directive 2001/24 was adopted pursuant to the competences of the European Union in the field of the internal market, more particularly that of removing obstacles to freedom of establishment and freedom to provide services within the European Union, and not pursuant to its competences in the field of economic and monetary policy. |
| --- | --- |

49

It should also be noted that Directive 2001/24 was adopted pursuant to the competences of the European Union in the field of the internal market, more particularly that of removing obstacles to freedom of establishment and freedom to provide services within the European Union, and not pursuant to its competences in the field of economic and monetary policy.

| 50 | Furthermore, although Article 127(5) TFEU and Article 3.3 of the Protocol on the ESCB and the ECB provide that the ESCB is to contribute to the smooth conduct of policies relating to the prudential supervision of credit institutions and the stability of the financial system, those provisions clearly state that those policies are to be conducted not by the ESCB itself but by the ‘competent authorities’. |
| --- | --- |

50

Furthermore, although Article 127(5) TFEU and Article 3.3 of the Protocol on the ESCB and the ECB provide that the ESCB is to contribute to the smooth conduct of policies relating to the prudential supervision of credit institutions and the stability of the financial system, those provisions clearly state that those policies are to be conducted not by the ESCB itself but by the ‘competent authorities’.

| 51 | In that regard, it follows from Article 2 and Article 3(1) of Directive 2001/24, read in conjunction with Article 1(4) of Directive 2000/12, applicable at the time of the facts relevant to the case in the main proceedings, that the Member States had the power to choose the competent authority to decide on the implementation of reorganisation measures, within the meaning of the first of those directives. Consequently, that authority was not necessarily, at that time, the central bank of the Member State concerned. |
| --- | --- |

51

In that regard, it follows from Article 2 and Article 3(1) of Directive 2001/24, read in conjunction with Article 1(4) of Directive 2000/12, applicable at the time of the facts relevant to the case in the main proceedings, that the Member States had the power to choose the competent authority to decide on the implementation of reorganisation measures, within the meaning of the first of those directives. Consequently, that authority was not necessarily, at that time, the central bank of the Member State concerned.

| 52 | That said, as the Court has held, the ESCB represents a novel legal construct in EU law which brings together national institutions, namely the national central banks, and an EU institution, namely the ECB, and causes them to cooperate closely with each other, and within which a different structure and a less marked distinction between the EU legal order and national legal orders prevails. In that highly integrated system intended by the authors of the Treaties for the purposes of the ESCB, the national central banks and their governors have a hybrid status, inasmuch as they constitute both national authorities and are authorities acting under the ESCB (see, to that effect, judgment of 17 December 2020, Commission v Slovenia(ECB archives), C‐316/19, EU:C:2020:1030, paragraph 83). |
| --- | --- |

52

That said, as the Court has held, the ESCB represents a novel legal construct in EU law which brings together national institutions, namely the national central banks, and an EU institution, namely the ECB, and causes them to cooperate closely with each other, and within which a different structure and a less marked distinction between the EU legal order and national legal orders prevails. In that highly integrated system intended by the authors of the Treaties for the purposes of the ESCB, the national central banks and their governors have a hybrid status, inasmuch as they constitute both national authorities and are authorities acting under the ESCB (see, to that effect, judgment of 17 December 2020, Commission v Slovenia(ECB archives), C‐316/19, EU:C:2020:1030, paragraph 83).

| 53 | In that context, in accordance with Article 14.4 of the Protocol on the ESCB and the ECB, the national central banks may perform functions other than those specified in that protocol, unless the Governing Council finds that those functions interfere with the objectives and tasks of the ESCB. |
| --- | --- |

53

In that context, in accordance with Article 14.4 of the Protocol on the ESCB and the ECB, the national central banks may perform functions other than those specified in that protocol, unless the Governing Council finds that those functions interfere with the objectives and tasks of the ESCB.

| 54 | Where the legislature of a Member State assigns such a function to the central bank of that Member State, that function must, under that provision, be performed under the responsibility and liability of that central bank. |
| --- | --- |

54

Where the legislature of a Member State assigns such a function to the central bank of that Member State, that function must, under that provision, be performed under the responsibility and liability of that central bank.

| 55 | As regards, more specifically, the specific rules governing the liability of a national central bank, including where it exercises a function conferred on it by national laws, the Protocol on the ESCB and the ECB merely states, in Article 35.3, that it is to be liable according to those laws. |
| --- | --- |

55

As regards, more specifically, the specific rules governing the liability of a national central bank, including where it exercises a function conferred on it by national laws, the Protocol on the ESCB and the ECB merely states, in Article 35.3, that it is to be liable according to those laws.

| 56 | It follows from the foregoing that it is for the Member State concerned to define the conditions in which the liability of its national central bank may be incurred as a result of the implementation by that bank of a reorganisation measure, within the meaning of Directive 2001/24, where that Member State has decided, like the Republic of Slovenia, to designate that central bank as the authority empowered to implement such a measure. |
| --- | --- |

56

It follows from the foregoing that it is for the Member State concerned to define the conditions in which the liability of its national central bank may be incurred as a result of the implementation by that bank of a reorganisation measure, within the meaning of Directive 2001/24, where that Member State has decided, like the Republic of Slovenia, to designate that central bank as the authority empowered to implement such a measure.

| 57 | Nonetheless, in exercising that power, the Member States are required to comply with their obligations deriving from EU law and, in particular, Title VIII of Part Three of the FEU Treaty, in which Article 123 of that treaty appears, and the Protocol on the ESCB and the ECB (see, by analogy, judgment of 15 July 2021, Commission v Poland (Disciplinary regime for judges), C‐791/19, EU:C:2021:596, paragraph 56). |
| --- | --- |

57

Nonetheless, in exercising that power, the Member States are required to comply with their obligations deriving from EU law and, in particular, Title VIII of Part Three of the FEU Treaty, in which Article 123 of that treaty appears, and the Protocol on the ESCB and the ECB (see, by analogy, judgment of 15 July 2021, Commission v Poland (Disciplinary regime for judges), C‐791/19, EU:C:2021:596, paragraph 56).

| 58 | Moreover, Article 131 TFEU and Article 14.1 of that protocol expressly require each Member State to ensure that its national legislation, including the statutes of its national central bank, is compatible with the Treaties and that protocol. |
| --- | --- |

58

Moreover, Article 131 TFEU and Article 14.1 of that protocol expressly require each Member State to ensure that its national legislation, including the statutes of its national central bank, is compatible with the Treaties and that protocol.

| 59 | The standards which are binding on the Member States on that basis include, in particular, Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB, to which the first question relates. |
| --- | --- |

59

The standards which are binding on the Member States on that basis include, in particular, Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB, to which the first question relates.

| 60 | According to the wording of Article 123(1) TFEU, that provision prohibits the ECB and the central banks of the Member States from granting overdraft facilities or any other type of credit facility to public authorities and bodies of the European Union and of Member States and from purchasing directly from them their debt instruments (see, to that effect, judgment of 11 December 2018, Weiss and Others, C‐493/17, EU:C:2018:1000, paragraph 102). That prohibition is reaffirmed in Article 21.1 of the Protocol on the ESCB and the ECB. |
| --- | --- |

60

According to the wording of Article 123(1) TFEU, that provision prohibits the ECB and the central banks of the Member States from granting overdraft facilities or any other type of credit facility to public authorities and bodies of the European Union and of Member States and from purchasing directly from them their debt instruments (see, to that effect, judgment of 11 December 2018, Weiss and Others, C‐493/17, EU:C:2018:1000, paragraph 102). That prohibition is reaffirmed in Article 21.1 of the Protocol on the ESCB and the ECB.

| 61 | In that regard, it must be held that the liability of a national central bank, from its own funds, on account of the exercise of a function conferred on it by national law manifestly cannot be classified as the direct acquisition of debt instruments of a public body. |
| --- | --- |

61

In that regard, it must be held that the liability of a national central bank, from its own funds, on account of the exercise of a function conferred on it by national law manifestly cannot be classified as the direct acquisition of debt instruments of a public body.

| 62 | The terms ‘overdraft facilities’ and ‘other type of credit facility’ used in Article 123 TFEU are, as stated in the second recital of Regulation No 3603/93, defined in that regulation. |
| --- | --- |

62

The terms ‘overdraft facilities’ and ‘other type of credit facility’ used in Article 123 TFEU are, as stated in the second recital of Regulation No 3603/93, defined in that regulation.

| 63 | Article 1(1)(a) of that regulation thus provides that the term ‘overdraft facilities’ refers, for the purposes of Article 123 TFEU, to any provision of funds to the public sector resulting or likely to result in a debit balance. |
| --- | --- |

63

Article 1(1)(a) of that regulation thus provides that the term ‘overdraft facilities’ refers, for the purposes of Article 123 TFEU, to any provision of funds to the public sector resulting or likely to result in a debit balance.

| 64 | Since legislation such as that referred to in the first question does not require a national central bank to establish a debit balance in favour of the public sector, it cannot, therefore, be regarded as leading to the grant of an overdraft facility, within the meaning of Article 123(1) TFEU, to public authorities or bodies. |
| --- | --- |

64

Since legislation such as that referred to in the first question does not require a national central bank to establish a debit balance in favour of the public sector, it cannot, therefore, be regarded as leading to the grant of an overdraft facility, within the meaning of Article 123(1) TFEU, to public authorities or bodies.

| 65 | Article 1(1)(b) of Regulation No 3603/93 defines the expression ‘other type of credit’, for the purposes of Article 123 TFEU, as meaning any claim against the public sector existing at 1 January 1994, any financing of the public sector’s obligations vis-à-vis third parties or, without prejudice to Article 123(2) TFEU, any transaction with the public sector resulting or likely to result in a claim against that sector. |
| --- | --- |

65

Article 1(1)(b) of Regulation No 3603/93 defines the expression ‘other type of credit’, for the purposes of Article 123 TFEU, as meaning any claim against the public sector existing at 1 January 1994, any financing of the public sector’s obligations vis-à-vis third parties or, without prejudice to Article 123(2) TFEU, any transaction with the public sector resulting or likely to result in a claim against that sector.

| 66 | Admittedly, the first and third categories mentioned in Article 1(1)(b) are not capable of covering the liability of a national central bank, from its own funds, on account of the exercise of a function conferred on it by national law, since the establishment of that liability does not imply the existence of either a claim by that central bank on the public sector existing on 1 January 1994, or of a transaction between that central bank and the public sector resulting or likely to result in a claim against that sector. |
| --- | --- |

66

Admittedly, the first and third categories mentioned in Article 1(1)(b) are not capable of covering the liability of a national central bank, from its own funds, on account of the exercise of a function conferred on it by national law, since the establishment of that liability does not imply the existence of either a claim by that central bank on the public sector existing on 1 January 1994, or of a transaction between that central bank and the public sector resulting or likely to result in a claim against that sector.

| 67 | On the other hand, it cannot be ruled out that the establishment of that liability may be regarded as entailing the financing of the public sector’s obligations vis-à-vis third parties, within the meaning of Article 1(1)(b)(ii), in so far as it leads the national central bank concerned to assume obligations vis-à-vis third parties which could potentially be incumbent on the public sector. |
| --- | --- |

67

On the other hand, it cannot be ruled out that the establishment of that liability may be regarded as entailing the financing of the public sector’s obligations vis-à-vis third parties, within the meaning of Article 1(1)(b)(ii), in so far as it leads the national central bank concerned to assume obligations vis-à-vis third parties which could potentially be incumbent on the public sector.

| 68 | In that regard, it is necessary, in the first place, to rule out from the outset that such liability must be regarded as constituting, in all circumstances, financing of a public sector obligation vis-à-vis persons in respect of whom that liability is incurred. |
| --- | --- |

68

In that regard, it is necessary, in the first place, to rule out from the outset that such liability must be regarded as constituting, in all circumstances, financing of a public sector obligation vis-à-vis persons in respect of whom that liability is incurred.

| 69 | If the authors of the Treaties had considered that the incurring of liability of a national central bank by reason of the exercise of a function conferred on it by national law was, in any event, incompatible with Article 123(1) TFEU, they would not have expressly provided, in Article 14.4 and Article 35.3 of the Protocol on the ESCB and the ECB, that such functions are to be performed by the national central banks under their own responsibility and liability, under conditions defined by their national laws. |
| --- | --- |

69

If the authors of the Treaties had considered that the incurring of liability of a national central bank by reason of the exercise of a function conferred on it by national law was, in any event, incompatible with Article 123(1) TFEU, they would not have expressly provided, in Article 14.4 and Article 35.3 of the Protocol on the ESCB and the ECB, that such functions are to be performed by the national central banks under their own responsibility and liability, under conditions defined by their national laws.

| 70 | Such an interpretation of Article 123(1) TFEU would run counter to the diversity of national practices in this area, which the authors of the Treaties intended to preserve when adopting those provisions of the Protocol on the ESCB and the ECB. |
| --- | --- |

70

Such an interpretation of Article 123(1) TFEU would run counter to the diversity of national practices in this area, which the authors of the Treaties intended to preserve when adopting those provisions of the Protocol on the ESCB and the ECB.

| 71 | In the second place, it should be noted that, where the liability of a national central bank is incurred, not solely because it has exercised a function conferred on it by national law and which is not a matter for the ESCB, but because of the infringement by that central bank of the rules imposed on it in that context, the compensation of third parties who have suffered harm is the consequence of the actions of that central bank and not the assumption of a pre-existing obligation vis-à-vis third parties incumbent on the other public authorities. |
| --- | --- |

71

In the second place, it should be noted that, where the liability of a national central bank is incurred, not solely because it has exercised a function conferred on it by national law and which is not a matter for the ESCB, but because of the infringement by that central bank of the rules imposed on it in that context, the compensation of third parties who have suffered harm is the consequence of the actions of that central bank and not the assumption of a pre-existing obligation vis-à-vis third parties incumbent on the other public authorities.

| 72 | In the third place, it is necessary to interpret Article 1(1)(b)(ii) of Regulation No 3603/93, which seeks to define the scope of Article 123(1) TFEU, taking into account the objective of the latter provision, namely to encourage Member States to follow a sound budgetary policy, not allowing monetary financing of public deficits or privileged access by public authorities to the financial markets to lead to excessively high levels of debt or excessive Member State deficits (see, to that effect, judgments of 16 June 2015, Gauweiler and Others, C‐62/14, EU:C:2015:400, paragraph 100, and of 11 December 2018, Weiss and Others, C‐493/17, EU:C:2018:1000, paragraph 107). |
| --- | --- |

72

In the third place, it is necessary to interpret Article 1(1)(b)(ii) of Regulation No 3603/93, which seeks to define the scope of Article 123(1) TFEU, taking into account the objective of the latter provision, namely to encourage Member States to follow a sound budgetary policy, not allowing monetary financing of public deficits or privileged access by public authorities to the financial markets to lead to excessively high levels of debt or excessive Member State deficits (see, to that effect, judgments of 16 June 2015, Gauweiler and Others, C‐62/14, EU:C:2015:400, paragraph 100, and of 11 December 2018, Weiss and Others, C‐493/17, EU:C:2018:1000, paragraph 107).

| 73 | When applying a regime under which the liability of a national central bank arises from the infringement by that bank of rules governing the exercise of a function conferred on it by national law, the effective financing of obligations vis-à-vis third parties by that national central bank cannot normally be regarded as directly resulting from measures adopted by the other public authorities of the Member State concerned. In principle, such financing cannot therefore be regarded as allowing those public authorities to incur expenditure by avoiding the impetus to comply with a sound budgetary policy stemming from Article 123(1) TFEU. |
| --- | --- |

73

When applying a regime under which the liability of a national central bank arises from the infringement by that bank of rules governing the exercise of a function conferred on it by national law, the effective financing of obligations vis-à-vis third parties by that national central bank cannot normally be regarded as directly resulting from measures adopted by the other public authorities of the Member State concerned. In principle, such financing cannot therefore be regarded as allowing those public authorities to incur expenditure by avoiding the impetus to comply with a sound budgetary policy stemming from Article 123(1) TFEU.

| 74 | In the light of the foregoing, a regime under which a national central bank incurs liability where that bank or the persons it has authorised to act on its behalf have not complied with the duty to exercise due care imposed on them by national law, in the exercise of a function conferred on that central bank by that law, cannot, in principle, be regarded as involving financing of public sector obligations vis-à-vis third parties. |
| --- | --- |

74

In the light of the foregoing, a regime under which a national central bank incurs liability where that bank or the persons it has authorised to act on its behalf have not complied with the duty to exercise due care imposed on them by national law, in the exercise of a function conferred on that central bank by that law, cannot, in principle, be regarded as involving financing of public sector obligations vis-à-vis third parties.

| 75 | Nevertheless, in view of the high degree of complexity and urgency characterising the implementation of reorganisation measures within the meaning of Directive 2001/24, such a liability regime cannot be applied to damage resulting from the implementation of those measures by a national central bank, without requiring that the infringement of the duty to exercise due care alleged against it be of a serious nature. Otherwise, that would have the effect, in reality, of imposing on that central bank most of the financial uncertainties inherent in that implementation and, therefore, would require that central bank, in breach of the prohibition on monetary financing, to be responsible, in place of the other public authorities of the Member State concerned, for the effective financing of obligations vis-à-vis third parties which might result from the economic policy choices made by those public authorities. |
| --- | --- |

75

Nevertheless, in view of the high degree of complexity and urgency characterising the implementation of reorganisation measures within the meaning of Directive 2001/24, such a liability regime cannot be applied to damage resulting from the implementation of those measures by a national central bank, without requiring that the infringement of the duty to exercise due care alleged against it be of a serious nature. Otherwise, that would have the effect, in reality, of imposing on that central bank most of the financial uncertainties inherent in that implementation and, therefore, would require that central bank, in breach of the prohibition on monetary financing, to be responsible, in place of the other public authorities of the Member State concerned, for the effective financing of obligations vis-à-vis third parties which might result from the economic policy choices made by those public authorities.

| 76 | The fact that, under a liability regime such as that referred to in the first question, the burden of proof relating to compliance with the duty to exercise due care falls on the national central bank concerned, rather than on the applicants, is not decisive, for the purposes of Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB, in so far as that distribution of the burden of proof preserves, in any event, the possibility for that national central bank to release itself from its liability by proving that it did not infringe that duty in a serious manner. |
| --- | --- |

76

The fact that, under a liability regime such as that referred to in the first question, the burden of proof relating to compliance with the duty to exercise due care falls on the national central bank concerned, rather than on the applicants, is not decisive, for the purposes of Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB, in so far as that distribution of the burden of proof preserves, in any event, the possibility for that national central bank to release itself from its liability by proving that it did not infringe that duty in a serious manner.

| 77 | It should also be noted that the ECB’s argument that Article 17(1) of the Charter of Fundamental Rights of the European Union imposes on Member States an obligation to compensate former holders of financial instruments where those rightholders have suffered greater losses than they would have suffered in the event of the insolvency of the financial institution concerned, with the result that a national regime under which the liability of a central bank may, in part, be derived from such losses necessarily entails financing by that central bank of public sector obligations vis-à-vis third parties. |
| --- | --- |

77

It should also be noted that the ECB’s argument that Article 17(1) of the Charter of Fundamental Rights of the European Union imposes on Member States an obligation to compensate former holders of financial instruments where those rightholders have suffered greater losses than they would have suffered in the event of the insolvency of the financial institution concerned, with the result that a national regime under which the liability of a central bank may, in part, be derived from such losses necessarily entails financing by that central bank of public sector obligations vis-à-vis third parties.

| 78 | It must be borne in mind that Article 17(1) does not require the establishment of liability regimes ensuring systematic compensation for former holders of financial instruments who have suffered such losses (see, to that effect, judgment of 5 May 2022, BPC Lux 2 and Others, C‐83/20, EU:C:2022:346, paragraphs 61 and 62). |
| --- | --- |

78

It must be borne in mind that Article 17(1) does not require the establishment of liability regimes ensuring systematic compensation for former holders of financial instruments who have suffered such losses (see, to that effect, judgment of 5 May 2022, BPC Lux 2 and Others, C‐83/20, EU:C:2022:346, paragraphs 61 and 62).

| 79 | In the light of the foregoing, the answer to the first question is that Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB must be interpreted as not precluding national legislation which provides that a national central bank belonging to the ESCB is liable, from its own funds, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, where it appears, during subsequent court proceedings, that either that cancellation was not necessary in order to ensure the stability of the financial system, or that those former holders of financial instruments suffered greater losses as a result of that cancellation than they would have suffered in the event of the insolvency of the financial institution concerned, to the extent that the central bank in question is held liable only where it or the persons whom it authorised to act on its behalf acted in serious breach of their duty to exercise due care. |
| --- | --- |

79

In the light of the foregoing, the answer to the first question is that Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB must be interpreted as not precluding national legislation which provides that a national central bank belonging to the ESCB is liable, from its own funds, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, where it appears, during subsequent court proceedings, that either that cancellation was not necessary in order to ensure the stability of the financial system, or that those former holders of financial instruments suffered greater losses as a result of that cancellation than they would have suffered in the event of the insolvency of the financial institution concerned, to the extent that the central bank in question is held liable only where it or the persons whom it authorised to act on its behalf acted in serious breach of their duty to exercise due care.

The second question

The second question

| 80 | By its second question, the referring court asks, in essence, whether Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable, from its own funds, within predetermined limits, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, only on condition that:





  – | first, those former holders are natural persons whose annual income is below a threshold defined by that legislation and |
| --- | --- | --- |

80

By its second question, the referring court asks, in essence, whether Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable, from its own funds, within predetermined limits, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, only on condition that:

–

first, those former holders are natural persons whose annual income is below a threshold defined by that legislation and

| – | second, the former holders waive entitlement to compensation for that damage by means of another legal remedy. |
| --- | --- |

–

second, the former holders waive entitlement to compensation for that damage by means of another legal remedy.

| 81 | As a preliminary point, it should be noted that it follows from the considerations set out in paragraphs 47 to 53 of the present judgment that a liability regime such as those referred to in the first and second questions contributes to defining the conditions for the exercise of a function other than those of the ESCB, conferred on a national central bank by national law pursuant to Article 14.4 of the Protocol on the ESCB and the ECB. |
| --- | --- |

81

As a preliminary point, it should be noted that it follows from the considerations set out in paragraphs 47 to 53 of the present judgment that a liability regime such as those referred to in the first and second questions contributes to defining the conditions for the exercise of a function other than those of the ESCB, conferred on a national central bank by national law pursuant to Article 14.4 of the Protocol on the ESCB and the ECB.

| 82 | That said, the liability regime referred to in the first question differs from that referred to in the second question, in particular in that the latter regime entails an obligation on the part of the national central bank concerned to compensate certain former holders of financial instruments cancelled by it solely on account of that cancellation, even if it is established that that central bank had fully complied with the relevant rules in that regard, in particular by acting with due care. |
| --- | --- |

82

That said, the liability regime referred to in the first question differs from that referred to in the second question, in particular in that the latter regime entails an obligation on the part of the national central bank concerned to compensate certain former holders of financial instruments cancelled by it solely on account of that cancellation, even if it is established that that central bank had fully complied with the relevant rules in that regard, in particular by acting with due care.

| 83 | A liability regime such as that referred to in the second question therefore ensures, with a view to achieving a social objective, compensation for the inevitable consequences of decisions taken by the national central bank in accordance with the choices made by the national legislature in defining the functions of that bank. |
| --- | --- |

83

A liability regime such as that referred to in the second question therefore ensures, with a view to achieving a social objective, compensation for the inevitable consequences of decisions taken by the national central bank in accordance with the choices made by the national legislature in defining the functions of that bank.

| 84 | While it is open to the national legislature to guarantee, in compliance with EU law, such compensation, in order to prevent the effects of the policies pursued with the aim of guaranteeing the stability of the financial system from imposing an excessive burden on natural persons with a modest income, it must be stated that it thus establishes a payment obligation which derives directly from political choices made by that legislature, and not from the way in which the central bank of the Member State concerned carries out its functions and from the specific choices which the latter makes in that context. |
| --- | --- |

84

While it is open to the national legislature to guarantee, in compliance with EU law, such compensation, in order to prevent the effects of the policies pursued with the aim of guaranteeing the stability of the financial system from imposing an excessive burden on natural persons with a modest income, it must be stated that it thus establishes a payment obligation which derives directly from political choices made by that legislature, and not from the way in which the central bank of the Member State concerned carries out its functions and from the specific choices which the latter makes in that context.

| 85 | The payment, from its own funds, of such compensation by the national central bank must therefore be regarded as leading it to be responsible, in place of the other public authorities of the Member State concerned, for the financing of public sector obligations under the national legislation of that Member State. |
| --- | --- |

85

The payment, from its own funds, of such compensation by the national central bank must therefore be regarded as leading it to be responsible, in place of the other public authorities of the Member State concerned, for the financing of public sector obligations under the national legislation of that Member State.

| 86 | As is apparent from paragraphs 53 to 68 above, Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB preclude the establishment of a liability regime of a national central bank, from its own funds, on account of the exercise of a function conferred on it by national law, where the application of that liability regime entails the financing of a public sector obligation vis-à-vis persons in respect of whom that liability is incurred. |
| --- | --- |

86

As is apparent from paragraphs 53 to 68 above, Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB preclude the establishment of a liability regime of a national central bank, from its own funds, on account of the exercise of a function conferred on it by national law, where the application of that liability regime entails the financing of a public sector obligation vis-à-vis persons in respect of whom that liability is incurred.

| 87 | The fact that such a liability regime applies only within the limit of certain ceilings is, in that regard, irrelevant, since it is in no way apparent from those provisions that the prohibition of monetary financing arising from them is subject to the amount of that financing. |
| --- | --- |

87

The fact that such a liability regime applies only within the limit of certain ceilings is, in that regard, irrelevant, since it is in no way apparent from those provisions that the prohibition of monetary financing arising from them is subject to the amount of that financing.

| 88 | Moreover, the Slovenian Government’s argument that the provisions referred to in paragraph 86 of the present judgment should not be applied because the liability regimes at issue in the main proceedings are financed on the basis of a mere change in the distribution of the annual profits of the Central Bank of Slovenia, entailing a reduction or even cancellation of the share of those profits to be transferred to the Republic of Slovenia – an allocation which falls within the scope of the competences of the national legislature – cannot succeed. |
| --- | --- |

88

Moreover, the Slovenian Government’s argument that the provisions referred to in paragraph 86 of the present judgment should not be applied because the liability regimes at issue in the main proceedings are financed on the basis of a mere change in the distribution of the annual profits of the Central Bank of Slovenia, entailing a reduction or even cancellation of the share of those profits to be transferred to the Republic of Slovenia – an allocation which falls within the scope of the competences of the national legislature – cannot succeed.

| 89 | It is clear from the request for a preliminary ruling that it relates to liability regimes financed not only by such an allocation of profits but also, where necessary, by a levy on the general reserves of the Central Bank of Slovenia, or by a loan to that bank from the Republic of Slovenia, and accordingly from that central bank’s own funds. |
| --- | --- |

89

It is clear from the request for a preliminary ruling that it relates to liability regimes financed not only by such an allocation of profits but also, where necessary, by a levy on the general reserves of the Central Bank of Slovenia, or by a loan to that bank from the Republic of Slovenia, and accordingly from that central bank’s own funds.

| 90 | Consequently, the answer to the second question is that Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable, from its own funds, within predetermined limits, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, only on condition that:





  – | first, those former holders are natural persons whose annual income is below a threshold defined by that legislation and |
| --- | --- | --- |

90

Consequently, the answer to the second question is that Article 123(1) TFEU and Article 21.1 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable, from its own funds, within predetermined limits, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, only on condition that:

–

first, those former holders are natural persons whose annual income is below a threshold defined by that legislation and

| – | second, the former holders waive entitlement to compensation for that damage by means of another legal remedy. |
| --- | --- |

–

second, the former holders waive entitlement to compensation for that damage by means of another legal remedy.

The third question

The third question

| 91 | By its third question, the referring court asks, in essence, whether Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable for damage caused by the cancellation of financial instruments, pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, in such sums as might impair the bank’s ability to perform its own tasks effectively and financed, in order of priority, by:





  – | the allocation to special reserves of all the profits made by that central bank as from a specified date; |
| --- | --- | --- |

91

By its third question, the referring court asks, in essence, whether Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable for damage caused by the cancellation of financial instruments, pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, in such sums as might impair the bank’s ability to perform its own tasks effectively and financed, in order of priority, by:

–

the allocation to special reserves of all the profits made by that central bank as from a specified date;

| – | a levy on the general reserves of that central bank not exceeding 50% of those reserves, and |
| --- | --- |

–

a levy on the general reserves of that central bank not exceeding 50% of those reserves, and

| – | a loan, together with interest, from the Member State concerned. |
| --- | --- |

–

a loan, together with interest, from the Member State concerned.

| 92 | As a preliminary point, it follows from the answer given to the first two questions referred for a preliminary ruling that the interpretation of Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB, which is the subject of the third question, is relevant to the resolution of the dispute in the main proceedings only in the light of the liability regime referred to in the first question, in so far as that regime allows the Central Bank of Slovenia to release itself from its liability by proving that it has not seriously infringed its duty to exercise due care in the context of the adopt of reorganisation measures, within the meaning of Directive 2001/24. |
| --- | --- |

92

As a preliminary point, it follows from the answer given to the first two questions referred for a preliminary ruling that the interpretation of Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB, which is the subject of the third question, is relevant to the resolution of the dispute in the main proceedings only in the light of the liability regime referred to in the first question, in so far as that regime allows the Central Bank of Slovenia to release itself from its liability by proving that it has not seriously infringed its duty to exercise due care in the context of the adopt of reorganisation measures, within the meaning of Directive 2001/24.

| 93 | Bearing in mind that clarification, it should be noted that the authors of the EC Treaty and subsequently the FEU Treaty intended to ensure that the ECB and the ESCB should be in a position to carry out independently the tasks conferred upon them (see, to that effect, judgment of 26 February 2019, Rimšēvičs andECB v Latvia, C‐202/18 and C‐238/18, EU:C:2019:139, paragraph 46 and the case-law cited). |
| --- | --- |

93

Bearing in mind that clarification, it should be noted that the authors of the EC Treaty and subsequently the FEU Treaty intended to ensure that the ECB and the ESCB should be in a position to carry out independently the tasks conferred upon them (see, to that effect, judgment of 26 February 2019, Rimšēvičs andECB v Latvia, C‐202/18 and C‐238/18, EU:C:2019:139, paragraph 46 and the case-law cited).

| 94 | The main evidence of that intention is set out in Article 130 TFEU, reproduced, in essence, in Article 7 of the Protocol on the ESCB and of the ECB, which expressly prohibits the ECB, the national central banks, and the members of their decision-making bodies from seeking or taking instructions from EU institutions, bodies, offices or agencies, from any government of a Member State or from any other body, on the one hand, and prohibits those EU institutions, bodies, offices or agencies and any government of a Member State from seeking to influence the members of the decision-making bodies of the ECB and the national central banks in the performance of their tasks, on the other (see, to that effect, judgment of 26 February 2019, Rimšēvičs andECB v Latvia, C‐202/18 and C‐238/18, EU:C:2019:139, paragraph 47 and the case-law cited). |
| --- | --- |

94

The main evidence of that intention is set out in Article 130 TFEU, reproduced, in essence, in Article 7 of the Protocol on the ESCB and of the ECB, which expressly prohibits the ECB, the national central banks, and the members of their decision-making bodies from seeking or taking instructions from EU institutions, bodies, offices or agencies, from any government of a Member State or from any other body, on the one hand, and prohibits those EU institutions, bodies, offices or agencies and any government of a Member State from seeking to influence the members of the decision-making bodies of the ECB and the national central banks in the performance of their tasks, on the other (see, to that effect, judgment of 26 February 2019, Rimšēvičs andECB v Latvia, C‐202/18 and C‐238/18, EU:C:2019:139, paragraph 47 and the case-law cited).

| 95 | Admittedly, in the light of the hybrid status of the national central banks, referred to in paragraph 52 of the present judgment, the principle of independence of those central banks does not necessarily apply in the same way when they carry out a task falling within the scope of the ESCB and when they perform a function not falling within that scope which has been assigned to them under national law by virtue of Article 14.4 of the Protocol on the ESCB and the ECB, such as the function to which the third question relates. |
| --- | --- |

95

Admittedly, in the light of the hybrid status of the national central banks, referred to in paragraph 52 of the present judgment, the principle of independence of those central banks does not necessarily apply in the same way when they carry out a task falling within the scope of the ESCB and when they perform a function not falling within that scope which has been assigned to them under national law by virtue of Article 14.4 of the Protocol on the ESCB and the ECB, such as the function to which the third question relates.

| 96 | Furthermore, since, as has been pointed out in paragraph 69 of the present judgment, Article 14.4 provides that national central banks are to perform such a function under their own responsibility and liability, the establishment of a regime enabling them to incur liability for damage caused in the performance of that function cannot, as such, be regarded as incompatible with the independence of those central banks. |
| --- | --- |

96

Furthermore, since, as has been pointed out in paragraph 69 of the present judgment, Article 14.4 provides that national central banks are to perform such a function under their own responsibility and liability, the establishment of a regime enabling them to incur liability for damage caused in the performance of that function cannot, as such, be regarded as incompatible with the independence of those central banks.

| 97 | However, the national rules put in place for that purpose cannot, without infringing Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB, place the national central bank concerned in a situation which in any way undermines its ability to carry out independently a task falling within the scope of the ESCB. |
| --- | --- |

97

However, the national rules put in place for that purpose cannot, without infringing Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB, place the national central bank concerned in a situation which in any way undermines its ability to carry out independently a task falling within the scope of the ESCB.

| 98 | In that regard, it should be recalled that, in order to ensure the independence of the ECB, the authors of the Treaties provided, inter alia, in the third sentence of Article 282(3) TFEU, that it is to be independent in the management of its finances (see, to that effect, judgment of 10 July 2003, Commission v ECB, C‐11/00, EU:C:2003:395, paragraphs 130 and 132). |
| --- | --- |

98

In that regard, it should be recalled that, in order to ensure the independence of the ECB, the authors of the Treaties provided, inter alia, in the third sentence of Article 282(3) TFEU, that it is to be independent in the management of its finances (see, to that effect, judgment of 10 July 2003, Commission v ECB, C‐11/00, EU:C:2003:395, paragraphs 130 and 132).

| 99 | While it is true that neither the FEU Treaty nor the Protocol on the ESCB and the ECB lay down an equivalent rule in respect of the national central banks, the fact remains that the basic tasks of the ESCB, which include, in accordance with Article 127(2) TFEU and Article 3.1 of that protocol, the definition and implementation of the EU monetary policy, fall, through the ESCB, not only on the ECB but also on the national central banks (see, to that effect, judgment of 17 December 2020, Commission v Slovenia(ECB archives), C‐316/19, EU:C:2020:1030, paragraph 80). |
| --- | --- |

99

While it is true that neither the FEU Treaty nor the Protocol on the ESCB and the ECB lay down an equivalent rule in respect of the national central banks, the fact remains that the basic tasks of the ESCB, which include, in accordance with Article 127(2) TFEU and Article 3.1 of that protocol, the definition and implementation of the EU monetary policy, fall, through the ESCB, not only on the ECB but also on the national central banks (see, to that effect, judgment of 17 December 2020, Commission v Slovenia(ECB archives), C‐316/19, EU:C:2020:1030, paragraph 80).

| 100 | In order to participate in the implementation of the European Union’s monetary policy, the establishment of reserves by the national central banks is essential, in particular in order to be able to offset any losses resulting from monetary policy operations and to finance open market operations provided for in Article 18 of the Protocol on the ESCB and the ECB. |
| --- | --- |

100

In order to participate in the implementation of the European Union’s monetary policy, the establishment of reserves by the national central banks is essential, in particular in order to be able to offset any losses resulting from monetary policy operations and to finance open market operations provided for in Article 18 of the Protocol on the ESCB and the ECB.

| 101 | In that context, a levy on the general reserves of a national central bank, in an amount likely to affect its ability to carry out its tasks effectively under the ESCB, combined with an inability to restore those reserves independently, because all its profits are systematically allocated to reimbursement of damage which it has caused, is liable to place that central bank in a situation of dependence on the political authorities of the Member State to which it belongs. |
| --- | --- |

101

In that context, a levy on the general reserves of a national central bank, in an amount likely to affect its ability to carry out its tasks effectively under the ESCB, combined with an inability to restore those reserves independently, because all its profits are systematically allocated to reimbursement of damage which it has caused, is liable to place that central bank in a situation of dependence on the political authorities of the Member State to which it belongs.

| 102 | In such a case, in order to have at its disposal the funds necessary to carry out its tasks under the ESCB, that central bank will be forced to seek the consent of those political authorities in order to obtain funding or recapitalisation. |
| --- | --- |

102

In such a case, in order to have at its disposal the funds necessary to carry out its tasks under the ESCB, that central bank will be forced to seek the consent of those political authorities in order to obtain funding or recapitalisation.

| 103 | Similarly, the imposition, in such circumstances, on a national central bank of a legal obligation to take out a loan from other public authorities of the Member State to which it belongs, where sources of financing linked to reserves have been exhausted, places it in a situation in which, in order to be able to carry out its tasks under the ESCB, it must negotiate with those public authorities the amount of such a loan and the conditions to which it is subject. |
| --- | --- |

103

Similarly, the imposition, in such circumstances, on a national central bank of a legal obligation to take out a loan from other public authorities of the Member State to which it belongs, where sources of financing linked to reserves have been exhausted, places it in a situation in which, in order to be able to carry out its tasks under the ESCB, it must negotiate with those public authorities the amount of such a loan and the conditions to which it is subject.

| 104 | Legislation such as that referred to in the third question therefore places the national central bank concerned in a situation where it is potentially exposed to political pressure, whereas Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB are intended, on the contrary, to shield the ESCB from all political pressure in order to enable it effectively to pursue the objectives ascribed to its tasks, through the independent exercise of the specific powers conferred on it for that purpose by primary law (see, to that effect, judgment of 26 February 2019, Rimšēvičs andECB v Latvia, C‐202/18 and C‐238/18, EU:C:2019:139, paragraph 47 and the case-law cited). |
| --- | --- |

104

Legislation such as that referred to in the third question therefore places the national central bank concerned in a situation where it is potentially exposed to political pressure, whereas Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB are intended, on the contrary, to shield the ESCB from all political pressure in order to enable it effectively to pursue the objectives ascribed to its tasks, through the independent exercise of the specific powers conferred on it for that purpose by primary law (see, to that effect, judgment of 26 February 2019, Rimšēvičs andECB v Latvia, C‐202/18 and C‐238/18, EU:C:2019:139, paragraph 47 and the case-law cited).

| 105 | The position would be different, however, if the Member State which established a liability regime for its national central bank such as that referred to in the first question had ensured in advance that that central bank would have the funds necessary to be able to pay the compensation resulting from that regime, while retaining its ability to carry out its tasks falling within the scope of the ESCB effectively and completely independently. In the present case, however, it is not apparent from the file before the Court that that is the case. |
| --- | --- |

105

The position would be different, however, if the Member State which established a liability regime for its national central bank such as that referred to in the first question had ensured in advance that that central bank would have the funds necessary to be able to pay the compensation resulting from that regime, while retaining its ability to carry out its tasks falling within the scope of the ESCB effectively and completely independently. In the present case, however, it is not apparent from the file before the Court that that is the case.

| 106 | It follows from the foregoing that the answer to the third question is that Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable for damage caused by the cancellation of financial instruments, pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, in such sums as might impair the bank’s ability to perform its tasks effectively and financed, in order of priority, by:





  – | the allocation to special reserves of all the profits made by that central bank as from a specified date; |
| --- | --- | --- |

106

It follows from the foregoing that the answer to the third question is that Article 130 TFEU and Article 7 of the Protocol on the ESCB and the ECB must be interpreted as precluding national legislation which provides that a national central bank belonging to the ESCB is liable for damage caused by the cancellation of financial instruments, pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, in such sums as might impair the bank’s ability to perform its tasks effectively and financed, in order of priority, by:

–

the allocation to special reserves of all the profits made by that central bank as from a specified date;

| – | a levy on the general reserves of that central bank not exceeding 50% of those reserves, and |
| --- | --- |

–

a levy on the general reserves of that central bank not exceeding 50% of those reserves, and

| – | a loan, together with interest, from the Member State concerned. |
| --- | --- |

–

a loan, together with interest, from the Member State concerned.

The fourth question

The fourth question

| 107 | By its fourth question, the referring court asks, in essence, whether Articles 44 to 52 of Directive 2006/48 or Articles 53 to 62 of Directive 2013/36 must be interpreted as meaning that the rules which they lay down are applicable to information obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24. |
| --- | --- |

107

By its fourth question, the referring court asks, in essence, whether Articles 44 to 52 of Directive 2006/48 or Articles 53 to 62 of Directive 2013/36 must be interpreted as meaning that the rules which they lay down are applicable to information obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24.

| 108 | Article 44 of Directive 2006/48 set out obligations of professional secrecy and confidentiality which applied to all persons working for or who have worked for the competent authorities, within the meaning of that directive, and to auditors and experts instructed by those competent authorities. |
| --- | --- |

108

Article 44 of Directive 2006/48 set out obligations of professional secrecy and confidentiality which applied to all persons working for or who have worked for the competent authorities, within the meaning of that directive, and to auditors and experts instructed by those competent authorities.

| 109 | Articles 45 to 52 of that directive set out a series of rules governing the use, exchange, transmission and disclosure of information by those competent authorities. |
| --- | --- |

109

Articles 45 to 52 of that directive set out a series of rules governing the use, exchange, transmission and disclosure of information by those competent authorities.

| 110 | Article 4(4) stated that, for the purposes of that directive, ‘competent authorities’ means ‘the national authorities which are empowered by law or regulation to supervise credit institutions’. |
| --- | --- |

110

Article 4(4) stated that, for the purposes of that directive, ‘competent authorities’ means ‘the national authorities which are empowered by law or regulation to supervise credit institutions’.

| 111 | The obligations set out in Article 44 of Directive 2006/48 were, in essence, repeated in Article 53 of Directive 2013/36, which repealed, as stated in Article 163 thereof, Directive 2006/48 with effect from 1 January 2014. |
| --- | --- |

111

The obligations set out in Article 44 of Directive 2006/48 were, in essence, repeated in Article 53 of Directive 2013/36, which repealed, as stated in Article 163 thereof, Directive 2006/48 with effect from 1 January 2014.

| 112 | Articles 54 to 62 of Directive 2013/36 set out the rules governing the use, exchange, transmission and disclosure of information by the competent authorities, within the meaning of that directive. |
| --- | --- |

112

Articles 54 to 62 of Directive 2013/36 set out the rules governing the use, exchange, transmission and disclosure of information by the competent authorities, within the meaning of that directive.

| 113 | Article 3(1)(36) of that directive defines the concept of ‘competent authority’ by reference to the meaning given to that term in Article 4(1)(40) of Regulation No 575/2013, which refers to a public authority which is empowered by national law to supervise credit institutions as part of the supervisory system existing in the Member State concerned. |
| --- | --- |

113

Article 3(1)(36) of that directive defines the concept of ‘competent authority’ by reference to the meaning given to that term in Article 4(1)(40) of Regulation No 575/2013, which refers to a public authority which is empowered by national law to supervise credit institutions as part of the supervisory system existing in the Member State concerned.

| 114 | It follows from all those provisions that the obligations laid down in Articles 44 to 52 of Directive 2006/48 and Articles 53 to 62 of Directive 2013/36 apply to authorities responsible, under national law, for the function of supervising credit institutions. |
| --- | --- |

114

It follows from all those provisions that the obligations laid down in Articles 44 to 52 of Directive 2006/48 and Articles 53 to 62 of Directive 2013/36 apply to authorities responsible, under national law, for the function of supervising credit institutions.

| 115 | Where a national authority is entrusted by the legislation of a Member State not only with that function but also other functions not covered by Directives 2006/48 or 2013/36, the obligations of professional secrecy and confidentiality laid down by those directives may not, without going beyond the scope of harmonisation brought about by those directives, be imposed on information which has been obtained or generated in the exercise of those other functions. |
| --- | --- |

115

Where a national authority is entrusted by the legislation of a Member State not only with that function but also other functions not covered by Directives 2006/48 or 2013/36, the obligations of professional secrecy and confidentiality laid down by those directives may not, without going beyond the scope of harmonisation brought about by those directives, be imposed on information which has been obtained or generated in the exercise of those other functions.

| 116 | It follows, in the first place, that the rules set out in Articles 44 to 52 of Directive 2006/48 and Articles 53 to 62 of Directive 2013/36 apply, under EU law, only to information obtained or generated in the exercise of the function of supervision of credit institutions. |
| --- | --- |

116

It follows, in the first place, that the rules set out in Articles 44 to 52 of Directive 2006/48 and Articles 53 to 62 of Directive 2013/36 apply, under EU law, only to information obtained or generated in the exercise of the function of supervision of credit institutions.

| 117 | The fourth question does not concern such information but solely concerns information which was obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24, which does not fall within the scope of the prudential supervision governed by Directives 2006/48 and 2013/36. |
| --- | --- |

117

The fourth question does not concern such information but solely concerns information which was obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24, which does not fall within the scope of the prudential supervision governed by Directives 2006/48 and 2013/36.

| 118 | That said, in the second place, Article 33 of Directive 2001/24 also lays down an obligation of professional secrecy, with reference to the rules and conditions laid down in Article 30 of Directive 2000/12. |
| --- | --- |

118

That said, in the second place, Article 33 of Directive 2001/24 also lays down an obligation of professional secrecy, with reference to the rules and conditions laid down in Article 30 of Directive 2000/12.

| 119 | That reference must be understood, by virtue of Article 158(2) of Directive 2006/48, read in conjunction with the correlation table in Annex XIV to that directive, and Article 163 of Directive 2013/36, read in conjunction with the correlation table in Annex II to that directive, as referring to Articles 44 to 52 of Directive 2006/48, and subsequently Articles 53 to 61 of Directive 2013/36, depending on the date under consideration. |
| --- | --- |

119

That reference must be understood, by virtue of Article 158(2) of Directive 2006/48, read in conjunction with the correlation table in Annex XIV to that directive, and Article 163 of Directive 2013/36, read in conjunction with the correlation table in Annex II to that directive, as referring to Articles 44 to 52 of Directive 2006/48, and subsequently Articles 53 to 61 of Directive 2013/36, depending on the date under consideration.

| 120 | However, it is apparent from the wording of Article 33 of Directive 2001/24 that that article imposes compliance with obligations of professional secrecy and confidentiality only on persons called upon to receive or supply information in the context of the information or consultation procedures provided for in Articles 4, 5, 8, 9, 11 and 19 of that directive. |
| --- | --- |

120

However, it is apparent from the wording of Article 33 of Directive 2001/24 that that article imposes compliance with obligations of professional secrecy and confidentiality only on persons called upon to receive or supply information in the context of the information or consultation procedures provided for in Articles 4, 5, 8, 9, 11 and 19 of that directive.

| 121 | In addition, as is apparent from recital 6 of that directive, its objective is to establish a system for the mutual recognition of reorganisation measures, without seeking to harmonise national legislation in that field (judgments of 24 October 2013, LBI, C‐85/12, EU:C:2013:697, paragraph 39, and of 19 July 2016, Kotnik and Others, C‐526/14, EU:C:2016:570, paragraph 104). |
| --- | --- |

121

In addition, as is apparent from recital 6 of that directive, its objective is to establish a system for the mutual recognition of reorganisation measures, without seeking to harmonise national legislation in that field (judgments of 24 October 2013, LBI, C‐85/12, EU:C:2013:697, paragraph 39, and of 19 July 2016, Kotnik and Others, C‐526/14, EU:C:2016:570, paragraph 104).

| 122 | In those circumstances, Article 33 of that directive must be interpreted not as providing for a general harmonisation of the rules on professional secrecy and confidentiality applicable to bank reorganisation, by making them subject to those applicable in the field of prudential supervision of banking institutions, but as providing solely for the application of such rules in the context of information and consultation procedures between competent authorities intended to ensure the mutual recognition of reorganisation measures. |
| --- | --- |

122

In those circumstances, Article 33 of that directive must be interpreted not as providing for a general harmonisation of the rules on professional secrecy and confidentiality applicable to bank reorganisation, by making them subject to those applicable in the field of prudential supervision of banking institutions, but as providing solely for the application of such rules in the context of information and consultation procedures between competent authorities intended to ensure the mutual recognition of reorganisation measures.

| 123 | Accordingly, Article 33 cannot lead to the application of the rules set out in Articles 44 to 52 of Directive 2006/48 and Articles 53 to 61 of Directive 2013/36 to information which was obtained or generated during the implementation of reorganisation measures and which has not been the subject of information or consultation procedures under Directive 2001/24. |
| --- | --- |

123

Accordingly, Article 33 cannot lead to the application of the rules set out in Articles 44 to 52 of Directive 2006/48 and Articles 53 to 61 of Directive 2013/36 to information which was obtained or generated during the implementation of reorganisation measures and which has not been the subject of information or consultation procedures under Directive 2001/24.

| 124 | Therefore, the answer to the fourth question is that Article 33 of Directive 2001/24, Articles 44 to 52 of Directive 2006/48 and Articles 53 to 62 of Directive 2013/36 must be interpreted as meaning that the rules set out in those articles do not apply to information obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24, which was not the subject of information or consultation procedures laid down in Articles 4, 5, 8, 9, 11 and 19 of Directive 2001/24. |
| --- | --- |

124

Therefore, the answer to the fourth question is that Article 33 of Directive 2001/24, Articles 44 to 52 of Directive 2006/48 and Articles 53 to 62 of Directive 2013/36 must be interpreted as meaning that the rules set out in those articles do not apply to information obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24, which was not the subject of information or consultation procedures laid down in Articles 4, 5, 8, 9, 11 and 19 of Directive 2001/24.

The fifth to the eighth questions

The fifth to the eighth questions

| 125 | In the light of the answer to the fourth question, there is no need to answer the fifth to the eighth questions, since they were asked by the referring court in the event of an affirmative answer to the fourth question. |
| --- | --- |

125

In the light of the answer to the fourth question, there is no need to answer the fifth to the eighth questions, since they were asked by the referring court in the event of an affirmative answer to the fourth question.

Costs

Costs

| 126 | Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. |
| --- | --- |

126

Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

| | On those grounds, the Court (Grand Chamber) hereby rules: |
| --- | --- |

On those grounds, the Court (Grand Chamber) hereby rules:

| | 1. | Article 123(1) TFEU and Article 21.1 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as not precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable, from its own funds, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of 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, ordered by that central bank, where it appears, during subsequent court proceedings, that either that cancellation was not necessary in order to ensure the stability of the financial system, or that those former holders of financial instruments suffered greater losses as a result of that cancellation than they would have suffered in the event of the insolvency of the financial institution concerned, to the extent that the central bank in question is held liable only where it or the persons whom it authorised to act on its behalf acted in serious breach of their duty to exercise due care. |
| --- | --- | --- |

1.

1.

Article 123(1) TFEU and Article 21.1 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as not precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable, from its own funds, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of 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, ordered by that central bank, where it appears, during subsequent court proceedings, that either that cancellation was not necessary in order to ensure the stability of the financial system, or that those former holders of financial instruments suffered greater losses as a result of that cancellation than they would have suffered in the event of the insolvency of the financial institution concerned, to the extent that the central bank in question is held liable only where it or the persons whom it authorised to act on its behalf acted in serious breach of their duty to exercise due care.

Article 123(1) TFEU and Article 21.1 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as not precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable, from its own funds, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of 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, ordered by that central bank, where it appears, during subsequent court proceedings, that either that cancellation was not necessary in order to ensure the stability of the financial system, or that those former holders of financial instruments suffered greater losses as a result of that cancellation than they would have suffered in the event of the insolvency of the financial institution concerned, to the extent that the central bank in question is held liable only where it or the persons whom it authorised to act on its behalf acted in serious breach of their duty to exercise due care.

| | 2. | Article 123(1) TFEU and Article 21.1 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable, from its own funds, within predetermined limits, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, only on condition that:






  – | first, those former holders are natural persons whose annual income is below a threshold defined by that legislation and |
| --- | --- | --- | --- |

2.

2.

Article 123(1) TFEU and Article 21.1 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable, from its own funds, within predetermined limits, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, only on condition that:

Article 123(1) TFEU and Article 21.1 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable, from its own funds, within predetermined limits, for damage suffered by former holders of financial instruments cancelled by it pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, only on condition that:

–

first, those former holders are natural persons whose annual income is below a threshold defined by that legislation and

first, those former holders are natural persons whose annual income is below a threshold defined by that legislation and

| – | second, the former holders waive entitlement to compensation for that damage by means of another legal remedy. |
| --- | --- |

–

second, the former holders waive entitlement to compensation for that damage by means of another legal remedy.

second, the former holders waive entitlement to compensation for that damage by means of another legal remedy.

| | 3. | Article 130 TFEU and Article 7 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable for damage caused by the cancellation of financial instruments, pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, in such sums as might impair the bank’s ability to perform its tasks effectively and financed, in order of priority, by:






  – | the allocation to special reserves of all the profits made by that central bank as from a specified date; |
| --- | --- | --- | --- |

3.

3.

Article 130 TFEU and Article 7 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable for damage caused by the cancellation of financial instruments, pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, in such sums as might impair the bank’s ability to perform its tasks effectively and financed, in order of priority, by:

Article 130 TFEU and Article 7 of Protocol (No 4) on the Statute of the European System of Central Banks and of the European Central Bank must be interpreted as precluding national legislation which provides that a national central bank belonging to the European System of Central Banks is liable for damage caused by the cancellation of financial instruments, pursuant to reorganisation measures, within the meaning of Directive 2001/24, ordered by that central bank, in such sums as might impair the bank’s ability to perform its tasks effectively and financed, in order of priority, by:

–

the allocation to special reserves of all the profits made by that central bank as from a specified date;

the allocation to special reserves of all the profits made by that central bank as from a specified date;

| – | a levy on the general reserves of that central bank not exceeding 50% of those reserves, and |
| --- | --- |

–

a levy on the general reserves of that central bank not exceeding 50% of those reserves, and

a levy on the general reserves of that central bank not exceeding 50% of those reserves, and

| – | a loan, together with interest, from the Member State concerned. |
| --- | --- |

–

a loan, together with interest, from the Member State concerned.

a loan, together with interest, from the Member State concerned.

| | 4. | Article 33 of Directive 2001/24, Articles 44 to 52 of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions, and Articles 53 to 62 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC,


  must be interpreted as meaning that:


  the rules set out in those articles do not apply to information obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24, which was not the subject of information or consultation procedures laid down in Articles 4, 5, 8, 9, 11 and 19 of Directive 2001/24. |
| --- | --- | --- |

4.

4.

Article 33 of Directive 2001/24, Articles 44 to 52 of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions, and Articles 53 to 62 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC,

Article 33 of Directive 2001/24, Articles 44 to 52 of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions, and Articles 53 to 62 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC,

must be interpreted as meaning that:

must be interpreted as meaning that:

the rules set out in those articles do not apply to information obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24, which was not the subject of information or consultation procedures laid down in Articles 4, 5, 8, 9, 11 and 19 of Directive 2001/24.

the rules set out in those articles do not apply to information obtained or generated during the implementation of reorganisation measures, within the meaning of Directive 2001/24, which was not the subject of information or consultation procedures laid down in Articles 4, 5, 8, 9, 11 and 19 of Directive 2001/24.

| | [Signatures] |
| --- | --- |

[Signatures]

---

(
  *1
  )	Language of the case: Slovenian.

*1