ORDER OF THE GENERAL COURT (First Chamber, Extended Composition)
30 November 2022 (*)
(Non-contractual liability – Economic and monetary policy – Stability support programme for Cyprus – Decision of the Governing Council of the ECB on the provision of emergency liquidity following a request by the Central Bank of Cyprus – Eurogroup statements of 25 March, 12 April, 13 May and 13 September 2013 concerning Cyprus – Decision 2013/236/EU – Implementing Decision 2013/463/EU – Memorandum of Understanding of 26 April 2013 on specific economic policy conditions between Cyprus and the European Stability Mechanism – Jurisdiction of the General Court – Admissibility – Formal requirements – Exhaustion of domestic remedies – Sufficiently serious breach of a rule of law conferring rights on individuals – Right to property – Legitimate expectations – Equal treatment – Action brought in part before a court which manifestly lacks jurisdiction to hear and determine the case, in part manifestly inadmissible and in part manifestly lacking any foundation in law)
In Case T‑379/16,
Basicmed Enterprises Ltd, established in Limassol (Cyprus), and the other applicants listed in the Annex, (1) represented by P. Tridimas, K. Kakoulli and P. Panayides, lawyers,
applicants,
v
Council of the European Union, represented by A. Westerhof Löfflerová and I. Gurov, acting as Agents,
European Commission, represented by L. Flynn, J.-P. Keppenne and S. Delaude, acting as Agents,
European Central Bank (ECB), represented by K. Laurinavičius, G. Várhelyi and K. Drēviņa, acting as Agents, and by H.-G. Kamann, lawyer,
Eurogroup, represented by the Council of the European Union, represented by A. Westerhof Löfflerová and I. Gurov, acting as Agents,
and
European Union, represented by the European Commission, represented by L. Flynn and J.-P. Keppenne and by S. Delaude, acting as Agents,
defendants,
THE GENERAL COURT (First Chamber, Extended Composition),
composed, at the time of the deliberations, of H. Kanninen (Rapporteur), President, M. Jaeger, N. Półtorak, O. Porchia and M. Stancu, Judges,
Registrar: E. Coulon,
having regard to the written part of the procedure, in particular:
–        the application lodged at the Registry of the General Court on 18 July 2016,
–        the plea of inadmissibility raised under Article 130(1) of the Rules of Procedure of the General Court by the Council by separate document lodged at the Court Registry on 15 December 2016,
–        the observations on that plea filed at the Court Registry on 31 March 2017,
–        the order of 12 May 2017 reserving the decision on the plea of inadmissibility for the final judgment,
–        the referral of the present case to the Fourth Chamber, Extended Composition, of the General Court,
–        the decision of 11 June 2018 to stay the proceedings until the decision of the Court bringing the proceedings to an end in the cases giving rise to the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487),
–        the measures of organisation of procedure of 3 September 2018,
–        the decision of 14 November 2018 to stay the proceedings pending the decision of the Court of Justice to terminate the proceedings in the cases giving rise to the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028),
–        the modification of the composition of the Chambers of the Court of and the reassignment of the case to the First Chamber,
–        the measures of organisation of procedure of 19 January 2021,
–        the letters lodged at the Court Registry on 22 February and 2 March 2021 by which, first, Maggiez Ltd, Victoluc Investments Ltd, Nadetta Ltd, Beyonca Investments Ltd and, secondly, the Pension Funds of the Water Board of Lemesos, the Provident Fund of the Water Board of Lemesos and the Water Board of Lemesos informed the Court that they were withdrawing their actions,
–        the order of 5 May 2021 of the President of the First Chamber of the General Court withdrawing the names of those applicants from the list of applicants in the present case,
–        the measures of organisation of procedure of 3 November 2021,
makes the following
Order
1        By their application under Article 268 TFEU, the applicants, Basicmed Enterprises Ltd and the other persons listed in the annex, seek compensation for the damage allegedly suffered by them as a result of the decision of the Governing Council of the European Central Bank (ECB) of 21 March 2013 on the provision of emergency liquidity following a request made by the Central Bank of Cyprus (‘the CBC’), the Eurogroup statements of 25 March, 12 April, 13 May and 13 September 2013 on Cyprus, Council Decision 2013/236/EU of 25 April 2013 addressed to Cyprus on specific measures to restore financial stability and sustainable growth (OJ 2013 L 141, p. 32), Council Implementing Decision 2013/463/EU of 13 September 2013 approving the macroeconomic adjustment programme for Cyprus and repealing Decision 2013/236 (OJ 2013 L 250, p. 40), the Memorandum of Understanding of 26 April 2013 on specific economic policy conditions between the Republic of Cyprus and the European Stability Mechanism (ESM) (‘the Memorandum of Understanding of 26 April 2013’), as well as other acts and conduct of the European Commission, the Council of the European Union, the ECB and the Eurogroup related to the provision of a financial assistance facility to the Republic of Cyprus.
I.      Background to the dispute
A.      ESM Treaty
2        On 2 February 2012, the Treaty establishing the ESM between the Kingdom of Belgium, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus, the Grand Duchy of Luxembourg, the Republic of Malta, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of Slovenia, the Slovak Republic and the Republic of Finland (‘the ESM Treaty’) was concluded in Brussels (Belgium). That treaty entered into force on 27 September 2012.
3        Recital 1 of the ESM Treaty is worded as follows:
‘The European Council agreed on 17 December 2010 on the need for euro area Member States to establish a permanent stability mechanism. This European Stability Mechanism (“ESM”) will assume the tasks currently fulfilled by the European Financial Stability Facility (“EFSF”) and the European Financial Stabilisation Mechanism (“EFSM”) in providing, where needed, financial assistance to euro area Member States.’
4        In accordance with Articles 1 and 2 and Article 32(2) of the ESM Treaty, the contracting parties, namely the Member States whose currency is the euro (‘MSCE’), are to establish among themselves an international financial institution, the ESM, which possesses legal personality.
5        Article 3 of the ESM Treaty describes the objective of the ESM as follows:
‘The purpose of the ESM shall be to mobilise funding and provide stability support under strict conditionality, appropriate to the financial assistance instrument chosen, to the benefit of ESM Members which are experiencing, or are threatened by, severe financing problems, if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States. For this purpose, the ESM shall be entitled to raise funds by issuing financial instruments or by entering into financial or other agreements or arrangements with ESM Members, financial institutions or other third parties.’
6        Article 4(1), (3) and (4) of the ESM Treaty states:
‘1. The ESM shall have a Board of Governors and a Board of Directors, as well as a Managing Director and other dedicated staff as may be considered necessary.
…
3. The adoption of a decision by mutual agreement requires the unanimity of the members participating in the vote. Abstentions do not prevent the adoption of a decision by mutual agreement.
4. By way of derogation from paragraph 3, an emergency voting procedure shall be used where the Commission and the ECB both conclude that a failure to urgently adopt a decision to grant or implement financial assistance, as defined in Articles 13 to 18, would threaten the economic and financial sustainability of the euro area. …’
7        Article 5(3) of the ESM Treaty provides that ‘the Member of the … Commission in charge of economic and monetary affairs and the President of the ECB, as well as the President of the Euro Group (if he or she is not the Chairperson or a Governor) may participate in the meetings of the Board of Governors [of the ESM] as observers’.
8        Article 6(2) of the ESM Treaty states that ‘the Member of the … Commission in charge of economic and monetary affairs and the President of the ECB may appoint one observer each [to the ESM’s Board of Directors]’.
9        Article 12 of the ESM Treaty defines the principles to which stability support is subject and provides, in paragraph 1, as follows:
‘If indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macroeconomic adjustment programme to continuous respect of pre-established eligibility conditions.’
10      Article 13 of the ESM Treaty describes the procedure for granting stability support to an ESM member in the following terms:
‘1. An ESM Member may address a request for stability support to the Chairperson of the Board of Governors. Such a request shall indicate the financial assistance instrument(s) to be considered. On receipt of such a request, the Chairperson of the Board of Governors shall entrust the … Commission, in liaison with the ECB, with the following tasks:
(a)      to assess the existence of a risk to the financial stability of the euro area as a whole or of its Member States, unless the ECB has already submitted an analysis under Article 18(2);
(b)      to assess whether public debt is sustainable. Wherever appropriate and possible, such an assessment is expected to be conducted together with the IMF;
(c)      to assess the actual or potential financing needs of the ESM Member concerned.
2. On the basis of the request of the ESM Member and the assessment referred to in paragraph 1, the Board of Governors may decide to grant, in principle, stability support to the ESM Member concerned in the form of a financial assistance facility.
3. If a decision pursuant to paragraph 2 is adopted, the Board of Governors shall entrust the … Commission – in liaison with the ECB and, wherever possible, together with the IMF – with the task of negotiating, with the ESM Member concerned, a memorandum of understanding (an “MoU”) detailing the conditionality attached to the financial assistance facility. The content of the MoU shall reflect the severity of the weaknesses to be addressed and the financial assistance instrument chosen. In parallel, the Managing Director of the ESM shall prepare a proposal for a financial assistance facility agreement, including the financial terms and conditions and the choice of instruments, to be adopted by the Board of Governors.
The MoU shall be fully consistent with the measures of economic policy coordination provided for in the TFEU, in particular with any act of European Union law, including any opinion, warning, recommendation or decision addressed to the ESM Member concerned.
4. The … Commission shall sign the MoU on behalf of the ESM, subject to prior compliance with the conditions set out in paragraph 3 and approval by the Board of Governors.
5. The Board of Directors shall approve the financial assistance facility agreement detailing the financial aspects of the stability support to be granted and, where applicable, the disbursement of the first tranche of the assistance.
…
7. The … Commission – in liaison with the ECB and, wherever possible, together with the IMF – shall be entrusted with monitoring compliance with the conditionality attached to the financial assistance facility.’
B.      Financial difficulties of the Republic of Cyprus and request for financial assistance
11      In the first months of 2012, the Hellenic Republic and its private bond creditors agreed on, and then proceeded with, a Greek debt swap at a substantial haircut on the nominal value of Greek debt held by private investors (Private Sector Involvement (‘the PSI’)).
12      As a result, in particular, of their exposure to the securities that were the subject of the PSI, several Cyprus-based banks, including Cyprus Popular Bank Public Co. Ltd (‘Laïki’) and Trapeza Kyprou Dimosia Etaireia Ltd (‘the BoC’), suffered significant losses. Together, those losses amounted to more than EUR 4 billion and represented approximately 25% of the gross domestic product (GDP) of the Republic of Cyprus.
13      Laïki, the BoC and other banks in Cyprus subsequently suffered from under-capitalisation problems. No longer able to provide sufficient collateral to obtain ECB funding, Laïki requested, and received, Emergency Liquidity Assistance (‘ELA’) from the BoC. The total amount of ELA provided to Laïki was EUR 3.8 billion in May 2012 and almost EUR 9.6 billion on 3 July 2012.
14      In those circumstances, the Republic of Cyprus found it necessary to intervene in support of the Cypriot banking sector, including a EUR 1.8 billion recapitalisation of Laïki in June 2012.
15      At that time, the Republic of Cyprus was itself already facing significant financial and fiscal difficulties. Cypriot sovereign bonds had suffered successive downgradings by rating agencies.
16      On 25 June 2012, following, inter alia, the decision of the rating agency Fitch to downgrade the Republic of Cyprus to speculative grade, the debt instruments of the Republic of Cyprus ceased to qualify as collateral for the monetary operations of the Eurosystem, which is composed of the central banks of the MSCE and the ECB, which conducts the European Union’s monetary policy. On the same day, the Republic of Cyprus submitted a request to the President of the Eurogroup for financial assistance from the ESM/EFSF.
17      By statement of 27 June 2012, the Eurogroup indicated that the requested financial assistance would be provided to the Republic of Cyprus either by the EFSF or the ESM in the context of a macroeconomic adjustment programme to be embodied in a memorandum of understanding (MoU) to be negotiated by the Commission, together with the ECB and the International Monetary Fund (IMF), on the one hand, and by the Cypriot authorities, on the other.
18      On 29 November 2012, representatives of the Commission, the ECB, the IMF and the Republic of Cyprus established a draft memorandum of understanding.
19      By statement of 21 January 2013, the Eurogroup, first, indicated that a final agreement on a macroeconomic adjustment programme could be reached in March 2013 and, secondly, encouraged the parties concerned to make progress in finalising the components of the draft memorandum of understanding.
20      In March 2013, the Republic of Cyprus and the other MSCE reached a political agreement on that draft memorandum of understanding.
21      By statement of 16 March 2013, the Eurogroup welcomed that agreement and the commitment of the Cypriot authorities to take additional measures to mobilise domestic resources, with a view to limiting the volume of financial assistance linked to the macroeconomic adjustment programme referred to in paragraph 19 above. Those measures included, inter alia, the imposition of a tax on bank deposits in Cyprus, the restructuring and recapitalisation of banks and the bail-in of junior bondholders. The Eurogroup also stressed that the Cypriot financial sector would be appropriately downsized to address its fragility and very large size relative to the GDP of the Republic of Cyprus. In that context, the Eurogroup stated that it considered that the provision of financial assistance to ensure the financial stability of the Republic of Cyprus and the euro area was, in principle, warranted and called on the interested parties to accelerate the ongoing negotiations.
22      On 18 March 2013, the Republic of Cyprus ordered the closure of banks on the working days of 19 and 20 March 2013. Subsequently, the Cypriot authorities decided to extend the closure until 28 March 2013 in order to avoid a run on the banks.
23      On 19 March 2013, the Cypriot Parliament rejected a draft law of the Cypriot Government on the creation of a tax on all bank deposits in Cyprus. The Cypriot Government then drafted a new law providing only for the restructuring of two Cypriot banks, the BoC and Laïki (‘the banks concerned’).
24      On 21 March 2013, when the liabilities of Laïki and the BoC from ELA amounted to EUR 9.5 billion and EUR 1.9 billion respectively, the ECB issued a press release stating:
‘The Governing Council of the [ECB] decided to maintain the current level of [ELA] until … 25 March 2013.
Thereafter, [ELA] could only be considered if an [EU or IMF] programme [was] in place that would ensure the solvency of the concerned banks.’
25      On 22 March 2013, the Cypriot Parliament adopted the peri exiyiansis pistotikon kai allon idrimaton nomos (No 17 (I)/2013) (Law on the Reorganisation of credit and other institutions, EE, Annex I (I), No 4379, p. 117) (‘the Law of 22 March 2013’). Pursuant to Section 3(1) and Section 5(1) of that law, the CBC was entrusted, jointly with the Cypriot Ministry of Finance, with the reorganisation of the institutions covered by that law. To that end, first of all, Section 12(1) of the law of 22 March 2013 provides that the CBC may, by decree, restructure the debts and obligations of an institution subject to resolution proceedings, including by way of reduction, modification, rescheduling or novation of the nominal capital or of the balance of any kind of existing or future claims on that institution or by means of a conversion of debt instruments into equity. Secondly, that section excludes from those measures insured deposits, within the meaning of the fifth paragraph of Section 2 of the Law of 22 March 2013, namely, deposits of an amount less than or equal to EUR 100 000. Section 3(2)(a) and (b) of that law provides that the shareholders of an institution subject to a resolution procedure are the first to bear any loss resulting from the implementation of resolution measures, whereas the creditors of such an institution bear such losses only after the shareholders. Finally, it follows from Section 3(2)(d) of that law that the measures adopted on the basis of that law may not place the creditors of the banks concerned in a less favourable financial situation than that in which they would find themselves in the event of the liquidation of those banks. Section 12(14) of the law in question specifies that, in the event of implementation of the measure provided for in Section 12(1) of that law, the parties affected are to receive, in payment of their claims, at least the amount which they would have received under Cypriot law in the event of the liquidation of those banks.
26      By statement of 25 March 2013, the Eurogroup indicated that it had reached an agreement with the Cypriot authorities on the essential elements of a future macroeconomic adjustment programme supported by all the MSCE as well as by the Commission, the ECB and the IMF.
27      That statement indicates, inter alia, the following:
‘The Eurogroup welcomes the plans for restructuring the financial sector as specified in the annex. These measures will form the basis for restoring the viability of the financial sector. In particular, they safeguard all deposits below EUR 100 000 in accordance with EU principles.
The programme will contain a decisive approach to addressing finacial sector imbalances. There will be an appropriate downsizing of the financial sector …
The Eurogroup urges the immediate implementation of the agreement between [the Republic of Cyprus] and the [Hellenic Republic] on the Greek branches of the Cypriot banks, which protects the stability of both the Greek and Cypriot banking systems.’
28      The annex to that statement is worded as follows:
‘Following the presentation by the authorities [of the Republic of Cyprus] of their policy plans, which were broadly welcomed by the Eurogroup, the following was agreed:
1. Laïki will be resolved immediately – with full contribution of equity shareholders, bondholders and uninsured depositors – based on a decision by the [CBC], using the newly adopted bank resolution framework.
2. Laïki will be split into a good bank and a bad bank. The bad bank will be run down over time.
3. The good bank will be folded into [the BoC], using the bank resolution framework, after having heard the boards of directors of [the] BoC and Laïki. It will take EUR 9 billion of ELA with it. Only uninsured deposits in [the] BoC will remain frozen until recapitalisation has been effected, and may subsequently be subject to appropriate conditions.
4. The Governing Council of the ECB will provide liquidity to the BoC in line with applicable rules.
5. [The] BoC will be recapitalised through a deposit/equity conversion of uninsured deposits with full contribution of equity shareholders and bondholders.
6. The conversion will be such that a capital ratio of 9% is secured by the end of the programme.
7. All insured depositors in all banks will be fully protected in accordance with the relevant EU legislation.
8. The programme money (up to EUR 10 billion) will not be used to recapitalise Laïki or the [BoC].’
29      As stated in the reply to the Court’s measures of organisation of procedure, it was considered that, out of the EUR 10 billion in the programme’s budget, EUR 3.4 billion would be allocated to the budgetary needs of the Republic of Cyprus, EUR 4.1 billion to the repurchase of debt securities by the Republic of Cyprus and EUR 2.5 billion to the recapitalisation and restructuring of Cypriot banks other than the banks concerned.
C.      Bank restructuring measures adopted by the Republic of Cyprus
30      On 25 March 2013, the Governor of the CBC submitted the banks concerned to restructuring proceedings.
31      Subsequently, four decrees were issued for this purpose on the basis of the Law of 22 March 2013, namely:
–        Kanonistiki Dioikitiki Praxi 96/2013, peri tis polisis ergasion ton en elladi ergasion tis Trapezas Kyprou Dimosias Etaireias Ltd Diatagma tou 2013 (Decree 96/2013 on the sale of certain operations of the BoC in Greece, Regulatory Administrative Act No 96), of 26 March 2013 (EE, Annex III (I), No 4640, 26.3.2013, p. 745) (‘Decree No 96’);
–        Kanonistiki Dioikitiki Praxi 97/2013, peri tis polisis ergasion ton en elladi ergasion tis Cyprus Popular Bank Public Co. Ltd Diatagma tou 2013 (Decree 97/2013, on the sale of certain operations of Laïki in Greece, Regulatory Administrative Act No 97), of 26 March 2013 (EE, Annex III (I), No 4640, 26.3.2013, p. 749) (‘Decree No 97’);
–        Kanonistiki Dioikitiki Praxi 103/2013, peri diasosis me idia mesa tis Trapezas Kyprou Dimosias Etaireias Ltd Diatagma tou 2013 (Decree 103/2013 on remediation by own means of the BoC, Regulatory Administrative Act No 103), of 29 March 2013 (EE, Annex III (I), No 4645, p. 769) (‘Decree No 103’);
–        Kanonistiki Dioikitiki Praxi 104/2013, peri tis Polisis Orismenon Ergasion tis Cyprus Popular Bank Public Co. Ltd Diatagma tou 2013 (Decree 104/2013, on the sale of certain activities of Laïki, Regulatory Administrative Act No 104), of 29 March 2013 (EE, Annex III (I), No 4645, 29.3.2013, p. 781) (‘Decree No 104’).
32      Decrees No 96 and No 97 provide, respectively, for the sale of the branches of the BoC and Laïki established in Greece (together, ‘the Greek branches’).
33      Paragraphs 5 and 6 of Decree No 103 provide for a recapitalisation of the BoC, at the expense of, inter alia, its uninsured deposit holders and shareholders, so that it can continue to provide banking services. Thus, the BoC’s uninsured deposits were converted into BoC shares (37.5% of each uninsured deposit), into securities convertible by the CBC into either shares or deposits (22.5% of each uninsured deposit) and into securities convertible into deposits by the CBC (40% of each uninsured deposit). Of the securities that can be converted into deposits by the CBC, 25% (10% of each uninsured deposit) have been released. The remaining 75% (30% of each uninsured deposit) remained unavailable to depositors. Paragraph 6(5) of Decree No 103 states that, if the contributions of the uninsured depositors exceed what is necessary for the purpose of restoring BoC’s equity, the resolution authority will determine the amount of the overcapitalisation and treat it as if the conversion had never taken place. Decree No 103, in accordance with its paragraph 10, came into force on 29 March 2013, at 6 a.m.
34      Following amendments to Decree No 103 on 30 July 2013, first, 10% of the uninsured deposits, which had previously been converted into securities convertible into shares or deposits, were converted into BoC shares. Of the remaining securities convertible by the CBC into either shares or deposits (12.5% of each uninsured deposit) and those that could be converted into deposits by the CBC and had not yet been released (30% of each uninsured deposit), 12% were placed in a new current account, while 88% were placed, in equal parts, in 6-month, 9-month and 12-month term accounts.
35      Secondly, the nominal value of one euro for each ordinary share of the BoC was reduced to one cent. Subsequently, about 100 ordinary shares with a nominal value of one cent were merged into one ordinary share with a nominal value of one euro. Ordinary shares with a nominal value of one cent that numbered less than 100 and therefore could not be merged into a new ordinary share with a nominal value of one euro were deleted.
36      As for Decree No 104, the combined provisions of its Sections 2 and 5 provide for the transfer of certain assets and liabilities of Laïki to the BoC by 29 March 2013 at 6.10 a.m., including deposits below EUR 100 000 and the ELA debt. Deposits above EUR 100 000 were maintained with Laïki, pending its liquidation.
37      Following amendments to Decree No 104 on 30 July 2013, approximately 18% of the BoC’s new share capital was granted to Laïki during 2013.
38      Following the adoption of Decrees No 96, No 97, No 103 and No 104 (together, ‘the harmful decrees’), the Commission, the ECB and the IMF held further discussions with the Cypriot authorities with a view to finalising a memorandum of understanding.
D.      Provision of financial assistance to the Republic of Cyprus
39      In its statement of 12 April 2013, first, the Eurogroup welcomed an agreement reached between the Cypriot authorities, on the one hand, and the IMF, the Commission and the ECB, on the other hand. It stated that, in view of that agreement, the necessary elements were in place to launch the national procedures required for the formal approval of the agreement on the financial assistance requested by the Republic of Cyprus. It also noted its expectation that the ESM Board of Governors would be in a position to approve the agreement by 24 April 2013, subject to the completion of national procedures. Secondly, the Eurogroup noted that the Cypriot authorities had implemented decisive resolution, restructuring and recapitalisation measures to address the unique and fragile situation of the Cypriot financial sector.
40      At its meeting on 24 April 2013, first, the ESM Board of Governors confirmed that the Commission and the ECB had been entrusted with the task of carrying out the assessments referred to in Article 13(1) of the ESM Treaty and that the Commission, together with the ECB and the IMF, had been entrusted with the negotiation of the Memorandum of Understanding with the Republic of Cyprus. Secondly, it decided to provide stability support to the Republic of Cyprus in the form of a Financial Assistance Facility (‘the FAF’), as proposed by the Managing Director of the ESM. Thirdly, it approved a new draft memorandum of understanding negotiated by the Commission, in cooperation with the ECB and the IMF, on the one hand, and by the Republic of Cyprus, on the other hand. Fourth, it instructed the Commission to sign that memorandum on behalf of the ESM.
41      On 25 April 2013, acting under Article 136(1) TFEU, the Council adopted Decision 2013/236. That decision provides for a series of ‘measures and outcomes’ to correct the budget deficit of the Republic of Cyprus and to restore the soundness of its financial system.
42      On 26 April 2013, the new Memorandum of Understanding was signed by the Vice-President of the Commission, on behalf of the ESM, by the Minister for Finance of the Republic of Cyprus and by the Governor of the CBC.
43      Under the heading ‘Restructuring and resolution of [the banks concerned]’, paragraphs 1.23 to 1.28 of that memorandum of understanding state:
‘1.23      The accounting and economic value assessment already mentioned revealed that the two largest banks of Cyprus were insolvent. To address this situation the government has implemented a far-reaching resolution and restructuring plan. In order to prevent the build-up of future imbalances and to restore the viability of the sector, while preserving competition, a fourfold strategy was adopted, which does not involve the use of taxpayer money. …
1.24      First, all Greek-related assets (including shipping loans) and liabilities were carved-out, estimated in the adverse scenario at EUR 16.4 billion and EUR 15.0 billion, respectively. The Greek assets and liabilities were acquired by Piraeus Bank, the restructuring of which will be dealt with by the Greek authorities. The carve-out was based on an agreement signed on 26 March 2013. With the book value of the assets at EUR 19.2 billion, the carve-out has substantially reduced the cross exposures between Greece and Cyprus.
1.25      With respect to the [United Kingdom] branch of [Laïki], all the deposits were transferred to the UK subsidiary of the [BoC]. The associated assets were folded into the [BoC].
1.26      Second, [the BoC] is taking over – via a purchase and assumption procedure – almost the entire Cypriot assets of [Laïki] at fair value, as well as the latter’s insured deposits and [ELA] exposure at nominal value. The uninsured deposits of [Laïki] will remain in the legacy entity. The aim is for the value of the transferred assets to be higher than the transferred liabilities with the difference corresponding to the recapitalisation of [the BoC] by [Laïki] amounting to 9% of the risk-weighted assets transferred. [The BoC] is being recapitalised to reach a core tier one ratio of 9% under the adverse scenario of the stress test by the end of the programme, which should help to restore confidence and normalise funding conditions. The conversion of 37.5% of the uninsured deposits in [BoC] into class A shares with full voting and dividend rights provides the largest part of the capital needs with additional equity contributions from the legacy entity of [Laïki]. Part of the remaining uninsured deposits of [the BoC] will be frozen temporarily …
1.27      Third, to ensure that the capitalisation targets are met, a more detailed and updated independent valuation of the assets of [the banks concerned] will be completed, as required by the bank resolution framework, by end June 2013. To this end, no later than mid-April 2013, the terms of reference of the independent valuation exercise will be agreed in consultation with the [Commission], the ECB and the IMF. Following that valuation, and if required, an additional conversion of uninsured deposits into class A shares will be undertaken to ensure that the core tier one capital target of 9% under stress by end-programme can be met. Should [the BoC] be found to be over-capitalised relative to the target, a share-reversal process will be undertaken to refund depositors by the amount of over-capitalisation.
1.28      Finally, given the systematic importance of [the BoC], it is important that the operations of [Laïki] are quickly integrated, operational efficiency is improved, the recovery of non-performing loans is optimised with the work-out implemented by the going concern entity and the funding conditions are progressively normalised. In order to achieve these goals and to ensure that [the BoC] can operate with maximum safeguards to preserve stability and continued viability during a transition period, the CBC, following consultation with the Ministry of Finance, will appoint a new Board of Directors and an acting Chief Executive Officer until [the BoC’s] new shareholders are organised in a general meeting. The CBC will require the Board of Directors to prepare a restructuring plan defining the bank’s business objectives and credit policies by end-September 2013. To ensure that normal business activities are not affected, institutional arrangements will be designed by end-June 2013 in accordance with Cypriot law to insulate [the BoC] from reputational and governance risks.’
44      On 30 April 2013, the Cypriot Parliament approved the Memorandum of Understanding of 26 April 2013.
45      On 8 May 2013, the ESM, the Republic of Cyprus and the CBC concluded the FAF Agreement. On the same day, the ESM Board of Directors approved the agreement and a proposal for the modalities of payment to the Republic of Cyprus of a first tranche of assistance amounting to EUR 3 billion. That tranche was divided into two instalments. The first, of around EUR 2 billion, was paid on 13 May 2013. The second, of around EUR 1 billion, was paid on 26 June 2013.
46      By statement of 13 May 2013, the Eurogroup welcomed the decision of the ESM Board of Governors to approve the first tranche of assistance and confirmed that the Republic of Cyprus had implemented the measures agreed in the Memorandum of Understanding of 26 April 2013.
47      In its statement of 13 September 2013, the Eurogroup welcomed the conclusion of the first monitoring mission by the Commission, the ECB and the IMF and the fact that the BoC was taken out of resolution on 30 July 2013. In addition, the Eurogroup expressed its support for the payment of a second tranche of assistance. Amounting to around EUR 1.5 billion, that tranche was paid on 27 September 2013.
48      Following the entry into force of Regulation (EU) No 472/2013 of the European Parliament and of the Council of 21 May 2013 on the strengthening of economic and budgetary surveillance of Member States in the euro area experiencing or threatened with serious difficulties with respect to their financial stability (OJ 2013 L 140, p. 1), the Council adopted Implementing Decision 2013/463 on 13 September 2013.
II.    Forms of order sought
49      The applicants claim that the Court should:
–        dismiss the plea of inadmissibility;
–        in the alternative, reserve the plea of inadmissibility until it rules on the substance of the case;
–        order the defendants to pay the amounts set out in the annex to the application, together with interest from 16 March 2013 until delivery of the judgment of the Court;
–        in the alternative, declare that the European Union and/or the defendants have incurred non-contractual liability and determine the procedure to be followed in order to establish the recoverable losses they have actually suffered;
–        order the defendants to pay the costs.
50      The Council contends that the Court should:
–        dismiss the action as inadmissible;
–        in the alternative, dismiss the action as manifestly unfounded;
–        order the applicants to pay the costs.
51      The Commission contends that the Court should:
–        dismiss the action;
–        order the applicants to pay the costs.
52      The ECB contends that the Court should:
–        dismiss the action as inadmissible;
–        in the alternative, dismiss the action as unfounded;
–        order the applicants to pay the costs.
III. Law
53      Under Article 126 of the Rules of Procedure of the Court, where the Court manifestly lacks jurisdiction to hear the action or where the action is manifestly inadmissible or manifestly lacking any foundation in law, the Court may decide to give judgment by means of a reasoned order, without taking further steps in the proceedings.
54      At the time of the entry into force of the harmful decrees (see paragraphs 31 to 37 above), the applicants were holders of deposits with Laïki and the BoC.
55      The application of the measures provided for in the harmful decrees as amended on 30 July 2013 (together, ‘the harmful measures’) caused a substantial reduction in the value of the deposits, precisely quantified by them in an annex to the application.
56      First of all, the applicants submit that the adoption of the harmful measures is attributable to the defendants. They took certain acts (‘the contested acts’) by which they, first, compelled the Republic of Cyprus to adopt the harmful measures in order to benefit from aid which was indispensable to it, secondly, approved the adoption of those measures and, thirdly, promoted or perpetuated the implementation of those measures. Those acts thus form part of a ‘continuum’ of unlawful concerted action which led directly to the damage suffered by the applicants. More specifically, the following acts were involved:
–        the Eurogroup statement of 25 March 2013 ;
–        ‘the [Eurogroup] Agreement of 25 March 2013’;
–        the ‘decision of the Governing Council of the ECB of 21 March 2013 to demand repayment of [ELA] on 26 March 2013 unless a rescue package is agreed’;
–        the ‘ECB decisions to continue the granting of ELA’;
–        the ‘decision empowering the Commission to conclude the … [Memorandum of Understanding of 26 April 2013]’;
–        the ‘acts by which the defendants requested that the Republic of Cyprus adopt the Law [of 22 March 2013 and the harmful decrees]’;
–        the other acts by which the defendants endorsed and approved the harmful measures, namely the Eurogroup statements of 12 April, 13 May and 13 September 2013, the ‘Commission’s findings that the measures adopted by the Cypriot authorities complied with conditionality’, Decision 2013/236, Implementing Decision 2013/463 and the approval, by the Commission and the ECB, of the payment of various tranches of the FAF to the Republic of Cyprus.
57      Next, the applicants submit that the contested acts were adopted without taking into account the interests of the closed group of depositors of the banks concerned, in serious and flagrant breach of EU law.
58      Finally, first, the applicants point out that there is a direct link between the harmful measures and the losses they have suffered. Secondly, they claim compensation for those losses.
A.      The Court’s jurisdiction
59      The defendants contest the jurisdiction of the Court to hear the present action.
60      It should be noted that, under Article 268 and the second and third paragraphs of Article 340 TFEU, the Court has jurisdiction in matters of non-contractual liability only in respect of disputes relating to compensation for damage caused by the institutions, bodies, offices or agencies of the European Union or by their servants acting in the performance of their duties (see, to that effect, order of 1 April 2008, Ayyanarsamy v Commission and Germany, T‑412/07, not published, EU:T:2008:84, paragraph 24).
61      According to the case-law, the term ‘institution’ used in the second paragraph of Article 340 TFEU must not be understood as referring solely to the EU institutions listed in Article 13(1) TEU (see, to that effect, judgment of 2 December 1992, SGEEM and Etroy v EIB, C‑370/89, EU:C:1992:482, paragraph 16). That term also covers, in view of the system of non-contractual liability established by the TFEU, all the other bodies and offices of the Union established by the Treaties and intended to contribute to the attainment of the objectives of the Union. Consequently, acts taken by those bodies and offices in the exercise of powers conferred on them by EU law are imputable to the European Union, in accordance with the general principles common to the Member States referred to in the second paragraph of Article 340 TFEU (see, to that effect, judgment of 10 April 2002, Lamberts v Ombudsman, T‑209/00, EU:T:2002:94, paragraph 49).
62      It follows that the Court cannot hear a claim for damages against the European Union based on the unlawfulness of an act or conduct of which the perpetrator is neither an institution, body, office or agency of the European Union nor one of their servants acting in the exercise of his or her functions. Thus, damage caused by the national authorities in the exercise of their own powers is capable of giving rise only to liability on the part of those authorities, and the national courts alone remain competent to ensure that such damage is made good (see, to that effect, judgments of 7 July 1987, L’Étoile commerciale and CNTA v Commission, 89/86 and 91/86, EU:C:1987:337, paragraph 17 and the case-law cited, and of 4 February 1998, Laga v Commission, T‑93/95, EU:T:1998:22, paragraph 47).
63      By contrast, it cannot be ruled out that the Court may hear an action seeking compensation for damage caused by an act or conduct by which a national authority ensures the implementation of EU legislation. In such a case, it must be ascertained, in order to establish the jurisdiction of the Court, whether the illegality alleged in support of the action does in fact emanate from an institution, body, office or agency of the European Union or from one of its servants acting in the performance of his or her duties and cannot be regarded as being, in reality, attributable to the national authority in question (see, to that effect and by analogy, judgment of 26 February 1986, Krohn Import-Export v Commission, 175/84, EU:C:1986:85, paragraph 19). That is the case where the national authorities have no discretion to implement EU legislation which is vitiated by such illegality (see, to that effect, judgment of 11 January 2002, Biret International v Council, T‑174/00, EU:T:2002:2, paragraph 33 and the case-law cited).
64      In addition, the Court has jurisdiction to hear an action seeking compensation for damage caused by unlawful acts or conduct of the Commission or the ECB in connection with the tasks entrusted to them under the ESM Treaty (see, to that effect, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 54 to 60).
65      In the present case, without prejudice to the identification of the determining cause of the alleged damage, it must be found that it is in the application of the harmful measures that the economic loss which the applicants claim to have suffered as depositors in the banks concerned is likely to have had its immediate origin. As the applicants agree, those measures were introduced by means of the harmful decrees. The harmful decrees, published on 29 March 2013 (see paragraph 31 above) and, in some cases, amended on 30 July 2013, were adopted by a Cypriot authority, the Governor of the CBC, pursuant to a Cypriot law, the Law of 22 March 2013. The adoption of that law and those decrees predates the signing of the Memorandum of Understanding of 26 April 2013 and was not formally required by an act of the European Union, unlike, for example, a national act transposing a directive. The harmful decrees are therefore not formally attributable to the European Union.
66      In that regard, first, the defendants argue that the adoption of the harmful decrees is not, in reality, attributable to the European Union either and cannot therefore give rise to its liability. Those decrees are attributable exclusively to the Cypriot authorities, which adopted them unilaterally in the exercise of their sovereign power. In that regard, the Commission and the ECB submit that the technical advice or opinions which they may have provided on various occasions concerning the measures envisaged or taken by the Cypriot authorities with a view to correcting the budget deficit of the Republic of Cyprus and restoring the soundness of the financial system are not binding. The Commission adds that the conclusions in its assessment reports for the purpose of monitoring the measures taken by the Cypriot authorities concerned measures after March 2013 and that Decision 2013/236 and Implementing Decision 2013/463 referred to future events.
67      Secondly, the Council and the Commission argue that the Eurogroup is not an EU institution within the meaning of Article 340 TFEU and that its statements are devoid of legal effect.
68      Thirdly, the ECB notes that ELA is the responsibility of the national central banks of the Eurosystem. The ECB merely determines whether it interferes with the tasks and objectives of the European System of Central Banks (ESCB). In the present case, the decision to grant ELA to the banks concerned would have been taken by the CBC, under the powers conferred on it by national law.
69      In any event, on 21 March 2013 the ECB did not adopt a decision under Article 14.4 of Protocol (No 4) on the Statute of the [ESCB] and of the [ECB] (OJ 2010 C 83, p. 230) (‘the ECB Statute’), but issued a mere statement of intent which had no legal effect and which could be freely amended, even in the event that such a statement might have increased the pressure on the Cypriot authorities owing to the deplorable state of Cypriot public finances and banks.
70      Fourthly, the ECB and the Commission refer to the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701), arguing that the activities carried out by them under the ESM Treaty, which do not involve any decision-making powers of their own, bind only the ESM. In that regard, the ECB adds, first, that, while it is clear from paragraph 55 of that judgment that, in the context of an action for non-contractual liability, it and the Commission may be held liable for unlawful conduct relating, where appropriate, to the adoption of a memorandum of understanding on behalf of the ESM, the Court of Justice, in so ruling, relied solely on the provisions of Article 17(1) TEU and Article 13(3) and (4) of the ESM Treaty, which concern the Commission’s obligations. Secondly, the Court of Justice did not overturn the principle that only acts of the institutions which legally compel the Member States to take illegal measures can give rise to liability on the part of the European Union. As for the Commission, it deduces from paragraph 55 that it is necessary to examine, in the light of the three conditions for the European Union’s non-contractual liability, whether its conduct in connection with the signing of the Memorandum of Understanding of 26 April 2013 is capable of giving rise to the European Union’s liability.
71      In the context of their observations as to the consequences which they drew, for the present dispute, from the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028) and, in so far as necessary and in so far as they had not been set aside by the Court of Justice, the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), the defendants submit that it follows from those judgments that the Eurogroup is not an institution of the European Union within the meaning of Article 340 TFEU, that they did not require the adoption of the harmful measures and that the action should therefore be dismissed in part because the General Court lacks jurisdiction to hear it.
72      The applicants respond that the Court has jurisdiction to hear the present action.
73      First, they claim that the arguments developed in the plea of inadmissibility concern only the acts of the Council and the Eurogroup and that it is therefore not possible to deduce from them any consequences as to the admissibility of the present action in so far as it seeks to hold the European Union liable for the acts or conduct of the ECB and the Commission.
74      Secondly, the applicants claim that, even if the harmful decrees are formally sovereign and unilateral acts of the Republic of Cyprus, the harmful measures are, in reality, attributable to the defendants. In its statement of 25 March 2013, the Eurogroup decided to make the FAF conditional on the adoption of those measures and, in view of the ‘demand of the ECB for the repayment of ELA on 26 March 2013’, the FAF was indispensable to avoid the bankruptcy of the Republic of Cyprus, whose room for manoeuvre was non-existent. Since the Eurogroup thus required the adoption of the harmful measures, the fact that they were adopted before the signing of the Memorandum of Understanding of 26 April 2013 does not affect the fact of their imputability to the European Union. Conversely, the fact that the harmful measures were identified in the Memorandum of Understanding of 26 April 2013 and that their implementation was monitored by the Commission in accordance with Article 1(2) of Decision 2013/236, as well as the wording of Article 2(6) of that decision, show that they were conditions to which the grant of the FAF was made subject. In that regard, Implementing Decision 2013/463 maintained the effects produced by Decision 2013/236 following the entry into force of Regulation No 472/2013.
75      Thirdly, the applicants point out that the Eurogroup can give rise to liability on the part of the European Union, since it is a body provided for by primary law and whose tasks are carried out within the framework of the monetary union, which falls withinthe exclusive competence of the Union. Moreover, as it usually meets on the evening of the Ecofin Council meeting and brings together Member States representing 215 of the 255 votes needed to reach a qualified majority at the time, its decisions would always be followed by the Council.
76      The applicants add that a non-binding act, such as a publication, may give rise to liability on the part of the European Union. In any event, the Eurogroup statement of 25 March 2013 was binding. The Eurogroup decided to make the FAF subject to specific conditions, which the Cypriot authorities, the ESM and the relevant EU institutions perceived as binding. In particular, since the ESM Board of Governors had the same composition as the Eurogroup, it could, according to the applicants, only endorse that decision or even be bound by it. That is also apparent from the statement of 25 March 2013 itself and from the European Parliament’s resolution of 13 March 2014 on the report on the investigation into the role and activities in the euro area-programme countries of the Troika, namely the Commission, the ECB and the IMF.
77      In addition, the applicants point out that the grant of the FAF does not fall outside the framework of the European Union. First of all, the granting of the FAF was decided by the Eurogroup, a body of the Union, with a view to achieving the objectives of the European Union. Next, the FAF was formally granted by the ESM, a mechanism whose necessity was decided by the European Council, whose objectives are closely linked to those of the European Union, and which is placed under the control and supervision of the Commission and the ECB. Finally, the FAF was accompanied by Decision 2013/236, adopted the day before the signature of the Memorandum of Understanding on 26 April 2013.
78      Furthermore, the applicants claim that the arguments adopted by the Court of Justice in the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), for holding that the Eurogroup is not an EU entity established by the Treaties, are not sufficiently reasoned. It is clear that the existence, composition and functions of the Eurogroup are provided for by primary law, that the decisions it takes are attributable to the European Union and that the ESM Board of Governors, the ECB, the Commission, the Council and the relevant Member State whose currency is the euro cannot deviate from it. As for the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others
(T‑786/14, not published, EU:T:2018:487), they did not consider the arguments that the composition of the Eurogroup at the time of the adoption of the Agreement of 25 March 2013 was the same as that of the ESM Board of Governors which approved the FAF or evidence establishing the pressure under which the Cypriot Government was placed during the Eurogroup meeting of 25 March 2013. The above judgments of the Court of Justice and the General Court infringe the right to effective judicial protection.
79      Fourthly, the applicants note that, according to Article 14.4 of the ECB Statute, the ECB must be informed of any ELA transaction and has the right to veto such a transaction.
80      Fifthly, the applicants submit that, even assuming that the Eurogroup’s statements did not produce binding effects, it in any event follows from the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701), that the ECB, the Commission and the Council are under an obligation not to support, promote, implement or require the Cypriot authorities to take measures contrary to EU law. In the present case, the Commission negotiated and signed the Memorandum of Understanding of 26 April 2013 and then monitored its implementation, both under the ESM Treaty and in execution of Decision 2013/236 and Implementing Decision 2013/463, in conjunction with the ECB. In doing so, both institutions endorsed and approved the harmful measures. The Council, for its part, made the measures binding by incorporating them into the provisions of Article 2 of Decision 2013/236 and then Article 2 of Implementing Decision 2013/463.
81      The debate between the parties raises, in essence, three questions, which the Court will examine in turn.
82      First of all, it must be examined whether the Court has jurisdiction to hear the present action in so far as it concerns acts of the Eurogroup (see paragraphs 85 to 96 below).
83      Next, it must be determined whether the harmful measures formally attributable to the Republic of Cyprus are, in fact, attributable to the defendants in whole or in part (see paragraphs 97 to 163 below).
84      Finally, the question is whether certain acts and conduct of the defendants could, independently of the question of imputability of the harmful measures, give rise to non-contractual liability on the part of the European Union (see paragraphs 164 to 179 below).
1.      The action in so far as it concerns acts of the Eurogroup
85      Among the contested acts which are alleged to have caused the harm claimed, the applicants refer to the ‘Eurogroup Agreement of 25 March 2013’ and the Eurogroup statements of 12 April, 13 May and 13 September 2013. According to the reply filed on 7 April 2017, the Eurogroup Agreement of 25 March 2013 is apparent from the Eurogroup statement of 25 March 2013.
86      The Council and the Commission submit that the Eurogroup is not an ‘institution’ within the meaning of the second paragraph of Article 340 TFEU and that, for that reason, the objection that the EU judicature lacks jurisdiction over the acts of the Eurogroup was upheld in the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028).
87      The applicants claim, in essence, that the conclusions reached by the Court of Justice in its judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), should not be transposed to the present case.
88      First of all, the applicants claim that the existence and tasks of the Eurogroup are provided for in the Treaties and that the intergovernmental nature of that body does not preclude it from being regarded as an ‘institution’ within the meaning of the second paragraph of Article 340 TFEU. They also point out that, in particular because the Eurogroup is composed of representatives of the Member States who also sit on the ESM Board of Governors, the agreement concluded within it on 25 March 2013 affected the role of the Council, the Commission and the ECB and produced binding legal consequences for those same institutions, the ESM, the private individuals concerned and the Republic of Cyprus, whose government was otherwise subject to ‘enormous pressure’.
89      In that regard, it is sufficient to note that, in paragraphs 84 and 87 to 89 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), the Court of Justice, after noting that Article 137 TFEU and Protocol No 14 formalised the existence of the Eurogroup and that it is an intergovernmental body, also held that it is an informal body, outside the institutional framework of the European Union, which acts as a link between the national and EU levels for the purposes of coordinating the economic policies of the MSCE falling within the sole competence of the latter.
90      Thus, contrary to what the applicants maintain, the fact that the existence and tasks of the Eurogroup are provided for by provisions of primary law is not sufficient to establish that it is an ‘institution’ within the meaning of the second paragraph of Article 340 TFEU. Furthermore, since, as is apparent from paragraph 90 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), the Eurogroup does not satisfy the first of the two criteria identified in paragraph 61 above, which requires the defendant in an action for non-contractual liability of the European Union to be an entity of the Union established by the Treaties, an action for non-contractual liability on the part of the European Union cannot be brought against it.
91      Next, the applicants argue that placing the Eurogroup outside the scope of judicial review infringes their right to effective judicial protection.
92      In that regard, in paragraph 93 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), the Court of Justice held that the political agreements concluded within the Eurogroup were given concrete form and implemented by means, inter alia, of acts and conduct of the Council, the Commission and the ECB, against which individuals could bring an action for non-contractual liability of the European Union before the EU Courts.
93      Therefore, the judicial protection of the applicants is guaranteed by the possibility of challenging the non-contractual liability of the European Union for measures taken by the Council, the Commission or the ECB in order to give effect to and implement political agreements concluded within the Eurogroup, which, moreover, they have done in the present action.
94      The applicants are therefore clearly wrong to argue that there is no need to transpose to the present case the conclusions reached by the Court of Justice in its judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028).
95      It must therefore be concluded in the present case that, as the Court of Justice held in paragraph 212 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), the Eurogroup does not constitute an entity established by the Treaties whose acts or conduct could be the subject of an action for non-contractual liability of the European Union under the second paragraph of Article 340 TFEU.
96      It follows that the Court does not have jurisdiction to hear the present action in so far as it relates to the Eurogroup statement of 25 March 2013, the ‘Eurogroup Agreement of 25 March 2013’ and the Eurogroup statements of 12 April, 13 May and 13 September 2013, even though those acts form part of a ‘continuum’, as the applicants submit.
2.      The imputability of the harmful measures to the defendants
97      At the outset, it should be recalled that verification of the imputability of an act or conduct at issue to the European Union may be relevant, first, in the context of the assessment of the jurisdiction of the Court, in so far as the latter has no jurisdiction to hear and determine claims for damages attributable not to the institutions, bodies, offices or agencies of the European Union or to their servants acting in the performance of their duties, but to a Member State or other entity external to the European Union, and secondly, in the context of the examination of the merits of an action, since it forms part of the elements making it possible to determine whether one of the three conditions for the European Union’s liability to be incurred is fulfilled, namely the existence of a causal link between the conduct of which those institutions, bodies, offices or agencies or their servants acting in the exercise of their functions are accused and the damage alleged (see, to that effect, judgment of 3 May 2017, Sotiropoulou and Others v Council, T‑531/14, not published, EU:T:2017:297, paragraph 57). In the present case, having regard, in particular, to the arguments of the parties (see paragraphs 66 to 80 above), the Court considers it appropriate to examine the question of imputability in the context of the examination of its jurisdiction.
98      The applicants claim, in essence, that the defendants, by means of the contested acts, actually forced the Republic of Cyprus to adopt the harmful measures. It follows that the losses which the applicants, in their capacity as depositors of the banks concerned, suffered as a result of those measures can be regarded as having been caused by the institutions, bodies, offices or agencies of the European Union or by their servants in the performance of their duties, which the defendants dispute.
99      It is therefore necessary to examine, in accordance with the case-law cited in paragraphs 60 to 64 above, whether the Council, the Commission and the ECB required the adoption of the harmful measures by means of the contested acts and, if so, whether the Republic of Cyprus had a margin of discretion to dispense with such a requirement.
(a)    ‘Decision of the Governing Council of the ECB of 21 March 2013 to demand repayment of ELA on 26 March 2013 unless a rescue package is agreed’
100    The applicants refer to the ECB’s press release of 21 March 2013 (see paragraph 24 above). As they stated in the context of the measures of organisation of procedure, they consider that that press release constitutes evidence of the decision of the Governing Council of the ECB to demand repayment of ELA by 26 March 2013 unless an agreement is reached on a rescue package.
101    As a reminder, the press release in question reads as follows:
‘The Governing Council of the [ECB] decided to maintain the current level of [ELA] until … 25 March 2013.
Thereafter, [ELA] could only be considered if an [EU or IMF] programme is in place that would ensure the solvency of the concerned banks [namely, the BoC and Laïki].’
102    In the first place, the scope of that press release must be determined. To that end, it is necessary to recall the main rules governing ELA.
103    It follows from the Agreement of 7 February 2013 on ELA that the latter is defined as the provision of ‘central bank money’ or any other assistance that may result in an increase in ‘central bank money’ to a financial institution, or a group of financial institutions, confronted with liquidity problems, without those operations being part of the single monetary policy.
104    According to that agreement, the responsibility for ELA lies with the national central bank concerned, which bears the costs and risks. ELA therefore has, in principle, a national legal basis. In the present case, it appears from the ECB’s reply in the context of the measures of organisation of procedure that ELA was granted to the banks concerned by the CBC on the basis of paragraph 6(2)(e) and paragraph 46(3) of the peri tis Kentrikis Trapezas tis Kyprou nomos tou 2002 (No 138(I)/2002) (CBC Law No 138(I)/2002, EE, Annex I(I), No 3624, 19.7.2002) (‘the Law of 19 July 2002’). Under the first of those provisions, the CBC’s task is, inter alia, to ensure the stability of the financial system. The second of these provisions empowers the CBC to ‘grant advances against collateral security, or make loans against collateral security to banks for fixed periods and for purposes which [it] may designate’.
105    As can be seen from the CBC’s email of 25 November 2021 attached to the ECB’s reply to the measures of organisation of procedure, the Governing Council of the CBC has, in a document of 31 January 2011, clarified the principles and procedures governing the granting of ELA. That document states, inter alia, that the CBC may apply Section 46(3) of the Law of 19 July 2002 for the purpose of providing temporary assistance to a supervised credit institution that is solvent but not liquid. The document states that such assistance is aimed at safeguarding financial stability, can only be considered in the case of a potential systemic risk and is generally granted only in exceptional circumstances.
106    It also follows from that document that ELA is not part of the single monetary policy and therefore falls within the scope of Article 14.4 of the ECB Statute. That provision reads as follows:
‘National central banks may perform functions other than those specified in [the ECB Statute] unless the Governing Council finds, by a majority of two thirds of the votes cast, that these interfere with the objectives and tasks of the ESCB. Such functions shall be performed on the responsibility and liability of national central banks and shall not be regarded as being part of the functions of the ESCB.’
107    In a document entitled ‘ELA Procedures’, the ECB states that, under Article 14.4 of the ECB Statute, the Governing Council of the ECB has been given the responsibility to restrict ELA operations if it considers that they interfere with the objectives and tasks of the ESCB. To that end, the Decision of the Governing Council of the ECB of 3 November 2011 on procedural issues relating to the ELA and the ELA Agreement of 7 February 2013 (see paragraph 103 above) provide for an information and cooperation system between the national central banks and the ECB.
108    Among information that the relevant national central bank must provide to the ECB in respect of any ELA operation is ‘the prudential supervisor’s assessment, over the short and medium term, of the liquidity position and solvency of the institution receiving ELA, including the criteria used to come to a positive conclusion with respect to solvency’. That requirement must be understood in the light of the prohibition on monetary financing laid down in Article 123 TFEU, the substance of which is reflected in Article 21.1 of the ECB Statute. In that regard, the ECB notes in its defence that it has always considered the financing of solvent financial institutions through ELA to be compatible with that prohibition, whereas the financing of insolvent financial institutions was not. The CBC document of 31 January 2011 referred to in paragraph 105 above corroborates that assertion, stating that any granting of ELA where there are underlying solvency problems would clearly contravene Article 123 TFEU and Article 21.1 of the ECB Statute.
109    At the time of the events, the ECB had no competence in the field of prudential supervision of credit institutions in the European Union, which was the exclusive responsibility of the national prudential supervisory authorities. In those circumstances, the ECB was, in order to ensure compliance with the prohibition on monetary financing, dependent on the information provided to it by those authorities on the solvency of the banks benefiting from ELA.
110    In the second place, it must be examined whether the press release of 21 March 2013 reflects the existence of a decision adopted under Article 14.4 of the ECB Statute, as the applicants argue in essence (see paragraph 100 above), or a mere statement of intent, as the ECB maintains (see paragraph 69 above).
111    In that regard, it should be recalled that, according to Article 14.4 of the ECB Statute, the Governing Council of the ECB is the competent body to prohibit a national central bank from granting ELA where it interferes with the objectives and tasks of the ESCB. The press release of 21 March 2013 states that the Governing Council of the ECB has ‘decided’ to maintain a certain level of ELA until 25 March 2013. Implicitly, but necessarily, that means that, as of 26 March 2013, the maintenance of that level of ELA would no longer be allowed and that, as the press release states, ‘thereafter, [ELA] could only be considered if an [EU or IMF] programme [was] in place that would ensure the solvency of the concerned banks’.
112    It must therefore be considered, in agreement with the applicants, that the press release of 21 March 2013 refers to the existence of a decision of the Governing Council of the ECB to oppose the maintenance of the existing level of ELA from 26 March 2013 and to make any extension of its repayment conditional on the conclusion of a financial assistance programme guaranteeing the solvency of the banks concerned (‘the decision of the Governing Council of the ECB of 21 March 2013’).
113    In the third place, it should be considered whether it can be inferred from that reading of the press release of 21 March 2013 that the ECB required the Republic of Cyprus to adopt the harmful measures.
114    In that regard, it should be noted that the press release of 21 March 2013 merely sets out an obligation of result. In that press release, the ECB makes no direct or indirect reference to the harmful measures, but merely makes a possible extension for the repayment of ELA conditional on the conclusion of an EU and IMF programme that would ensure the solvency of the banks concerned. That press release does not specify the characteristics that such a programme should have, nor does it mention any Eurogroup statements, ESM acts or ongoing negotiations on the adoption of the harmful measures.
115    Contrary to the applicants’ allegations, the press article of 17 October 2014 entitled ‘Before a bailout, [ECB] minutes showed doubts over keeping a Cyprus bank afloat’ does not in any way call that assessment into question. The article merely reports that ‘a close reading of minutes [of the Governing Council of the ECB meetings] reveals numerous instances in which [ECB] officials said they would cut off the program [of ELA granted to Laïki] if progress was not made by [the Republic of] Cyprus in securing an economic rescue program’, without at any point arguing that those representatives required such a programme to take a specific form or have particular characteristics.
116    The applicants also refer to the testimony before a committee of enquiry of the Cypriot Parliament of the Minister for Finance of the Republic of Cyprus at the time of the events. However, that testimony related to the introduction of a tax on all bank deposits in Cyprus. That tax, the introduction of which was rejected by the Cypriot Parliament on 19 March 2013 (see paragraph 23 above), is not included among the harmful measures.
117    In those circumstances, it must be concluded that it follows from the press release of 21 March 2013, even if it forms part of a ‘continuum’, as the applicants claim, that the Republic of Cyprus was free to take measures other than the harmful measures for the purpose of ensuring the solvency of the banks concerned (see, to that effect and by analogy, order of 14 July 2016, Alcimos Consulting v ECB, T‑368/15, not published, EU:T:2016:438, paragraph 38). It cannot therefore be considered that, by that press release or the decision referred to therein, the ECB required the Republic of Cyprus to adopt those measures.
(b)    ‘[Decisions] to continue the granting of ELA’ allegedly adopted by the ECB
118    The applicants distinguish between the decision of the Governing Council of the ECB of 21 March 2013 (see paragraphs 100 to 117 above) and what they describe as decisions of the ECB ‘to continue the granting of ELA’.
119    It is apparent from the application and the applicants’ replies to the questions put by the Court in the context of the measures of organisation of procedure concerning ELA that Laïki and then the BoC had to call on ELA from October 2011 and October or November 2012 respectively and that the ECB then ‘continued to allow the provision of ELA’ pending the conclusion of an agreement with the Cypriot Government. However, by its decision of 21 March 2013, the ECB reportedly decided, against all expectations, to terminate this support as of 26 March 2013, unless a financial assistance programme was put in place. It must therefore be inferred that the decisions to continue granting ELA complained of by the applicants predate the press release of 21 March 2013.
120    At that time, ELA fell within the competence of the national prudential supervisory authorities alone (see paragraphs 103 to 109 above), the Governing Council of the ECB being competent only to restrict ELA operations which it considered to interfere with the objectives and tasks of the ESCB. The acts of the ECB to which the applicants refer must therefore be regarded as those by which the ECB decided, prior to 21 March 2013, not to oppose ELA.
121    However, the applicants do not explain in any way how the ECB, by such decisions, required the Republic of Cyprus to adopt the harmful measures.
122    It cannot therefore be considered that, by the ‘decisions to continue the granting of ELA’ prior to the press release of 21 March 2013, the ECB required the Republic of Cyprus to adopt the harmful measures, even though such decisions, as the applicants argue, form part of a ‘continuum’.
(c)    Subsequent acts
123    The contested acts also include the following three groups of acts:
–        the ‘decision empowering the Commission to conclude the … [Memorandum of Understanding of 26 April 2013]’;
–        the ‘Commission’s findings that the measures adopted by the Cypriot authorities complied with conditionality’ and the approval, by the Commission and the ECB, of the payment of various tranches of the FAF to the Republic of Cyprus;
–        Decision 2013/236 and Implementing Decision 2013/463.
124    Those acts are subsequent to 29 March 2013 and, therefore, to the adoption of the harmful decrees. It is therefore not possible to consider that the defendants have, by means of those acts, demanded the adoption of the harmful measures contained in those decrees. At most, they could have demanded the adoption of the harmful measures introduced by the amendments made to the harmful decrees on 30 July 2013 and referred to in paragraphs 34 and 35 above. The applicants maintain, however, that all the contested acts form part of a ‘continuum’, which begins with the defendants’ conduct leading to the adoption of the conditionality agreement and continues with their various interventions before and after the signing of the Memorandum of Understanding of 26 April 2013. In those circumstances, the refusal of the defendants to take any of those acts would have meant the failure of the harmful measures, which could then not or no longer have been implemented.
125    The applicants’ argument amounts, in essence, to considering that the adoption by the defendants of each of the acts referred to in paragraph 123 above was a necessary condition for the maintenance or continued implementation by the Republic of Cyprus of the harmful measures. It must be noted, however, that that reasoning remains speculative. It is not apparent from the documents in the file that the Republic of Cyprus would have been obliged to repeal or cease to implement the harmful measures if one of the subsequent acts referred to in paragraph 123 above had not been adopted.
126    It is, however, possible to interpret the applicants’ submissions before the Court, and in particular their argument that the Republic of Cyprus could not, without infringing some of those subsequent acts, have repealed the Law of 22 March 2013 and the harmful decrees or ceased to implement the harmful measures introduced on 29 March 2013, in the sense that the defendants would have compelled the Republic of Cyprus to maintain or continue to implement those measures. The alleged damage would then result not only from the adoption of the harmful measures, but also from the maintenance and continued implementation of those measures.
127    It is therefore necessary to examine whether the defendants, by adopting the acts referred to in paragraph 123 above, compelled the Republic of Cyprus to maintain or continue to implement the harmful measures introduced on 29 March 2013. It will also be examined whether the defendants have, by means of those acts, required the adoption of the harmful measures introduced by the amendments to the harmful decrees on 30 July 2013 and referred to in paragraphs 34 and 35 above.
128    In the first place, as regards the ‘decision empowering the Commission to conclude the … [Memorandum of Understanding of 26 April 2013]’, the applicants, in response to a question put by the Court in the context of the measures of organisation of procedure, submit that they are referring to two acts, namely, first, the conclusion of that memorandum of understanding and, secondly, ‘the act by which the Commission, as an EU body, accepted to conclude the [Memorandum of Understanding], to the extent that it exists’.
129    As regards the conclusion of the Memorandum of Understanding of 26 April 2013, it should be noted that the measures specified therein fall into three groups, each of which relates to a different objective, namely, first, the restoration of the health of the Cypriot financial system and the confidence of depositors and the market, secondly, the continuation of the fiscal consolidation process and, thirdly, the implementation of structural reforms.
130    The harmful measures are discussed under the first of those three groups. They are described first briefly under the heading ‘Progress to date’ and then in more detail in paragraphs 1.23 to 1.28 of the Memorandum of Understanding of 26 April 2013 (see paragraph 43 above).
131    In that regard, first, it is stated in recitals D and F of the Memorandum of Understanding of 26 April 2013, on the one hand, that the FAF is granted to the Republic of Cyprus on condition that it complies with the measures specified therein and, on the other hand, that the ESM Board of Governors must decide, on the basis of the reports of the Commission and before making each payment, whether those measures have been respected. There is no provision in the Memorandum of Understanding of 26 April 2013 which indicates that the Republic of Cyprus may limit itself to adopting certain new measures. Rather, a general reading of that memorandum indicates that the implementation of all the measures contained therein, and thus also the maintenance of those already adopted before its signing, was considered necessary.
132    Secondly, in paragraphs 1.23 to 1.28 of the Memorandum of Understanding of 26 April 2013, measures that have already been adopted are mentioned in combination with measures to be adopted. However, the latter would have no reason to exist in the absence of the measures that have already been adopted. For example, it is stated, in paragraph 1.26 of the Memorandum of Understanding of 26 April 2013 that the recapitalisation of the BoC was carried out by, inter alia, converting uninsured deposits into shares (a measure that has already been adopted) and, in paragraph 1.27 of that memorandum, that if, as a result of an assessment of the BoC’s capital requirements to be carried out subsequently, it is considered that the BoC is undercapitalised, a larger proportion of the uninsured deposits will have to be converted into shares, while, if it is considered that the BoC is overcapitalised, the holders of uninsured deposits will be entitled to a refund (measure to be adopted).
133    Therefore, paragraph 1.26 of the Memorandum of Understanding of 26 April 2013 must be considered to require the continuation of the harmful measures introduced on 29 March 2013 as a condition for the granting of the FAF. As for paragraph 1.27 of that memorandum, it deals with the additional conversions of deposits in the BoC into shares, as introduced on 30 July 2013 by the amendments to Decree No 103 referred to in paragraph 34 above.
134    However, it is important to note that the Commission signed the Memorandum of Understanding of 26 April 2013 on behalf of the ESM, in accordance with Article 13(4) of the ESM Treaty. However, the functions entrusted to the Commission and the ECB under the ESM Treaty do not include any decision-making powers of their own and the activities carried out by those two institutions under the same Treaty are binding only on the ESM (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 161, and of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 53). Therefore, the requirement of maintenance and continued implementation of the harmful measures and the possible requirement of additional conversions of BoC shares, enshrined in that memorandum of understanding, are attributable only to the ESM, and not to the Commission.
135    It follows from the foregoing that, in concluding the Memorandum of Understanding of 26 April 2013, the Commission did not require either the maintenance or the continued implementation of the harmful measures introduced on 29 March 2013 by the Republic of Cyprus, but confined itself to providing operational assistance to the ESM with a view to concluding an agreement for which only the ESM and the Republic of Cyprus are responsible. The same conclusion must be drawn with regard to the harmful measures introduced on 30 July 2013 by the amendments to the harmful decrees referred to in paragraphs 34 and 35 above.
136    Furthermore, with regard to the complaint against ‘the act by which the Commission, as an EU body, accepted to conclude the [Memorandum of Understanding of 26 April 2013], to the extent that it exists’, the applicants state that they are referring to an act of the European Union under which the Commission was specifically empowered to conclude the memorandum of understanding, the existence of which they presume. In that regard, it should be noted that it is Article 13(4) of the ESM Treaty which provides for the Commission to sign a memorandum of understanding on behalf of the ESM. In the present case, on the occasion of its meeting of 24 April 2013, the Board of Governors of the ESM mandated the Commission to sign the draft memorandum of understanding negotiated, on the one hand, by the Commission, together with the ECB and the IMF, and, on the other hand, by the Republic of Cyprus (see paragraph 40 above). It follows that the Commission’s power to conclude the Memorandum of Understanding of 26 April 2013 is attributable solely to the ESM and that the Court clearly lacks jurisdiction to rule on it in the context of the present action.
137    In the second place, even assuming that they can be considered to have required the continuation or continued implementation of the harmful measures or the adoption of the harmful measures introduced on 30 July 2013 by the amendments to the harmful decrees referred to in paragraphs 34 and 35 above, the Commission’s finding that ‘the measures adopted by the Cypriot authorities complied with conditionality’ and the approval, by the Commission and the ECB, of the payment of the various tranches of the FAF to the Republic of Cyprus (see the second indent of paragraph 123 above) are, for reasons similar to those set out in paragraphs 134 and 135 above, attributable only to the ESM. When, under Article 13(7) of the ESM Treaty, the Commission, in liaison with the ECB, monitors compliance with the conditionality attached to the FAF, it is merely performing an operational task on behalf of the ESM, which alone has the decision-making power.
138    In the third place, as regards Decision 2013/236 and Implementing Decision 2013/463 (see the third indent of paragraph 123 above), by which the Council ‘incorporated into EU law not only [the allegedly unlawful conditions for granting the FAF] but also all the [harmful] measures’, it should be noted that, contrary to what the applicants argue, in essence, the entirety of the harmful measures are not specifically referred to in those decisions.
139    First, with regard to Decision 2013/236, only recitals 5 and 9 and Article 2(6) of that decision, which do not address most of the harmful measures directly, deal with issues related to them.
140    Recital 5 of Decision 2013/236 includes a passage that reads:
‘On 25 March 2013, the Eurogroup reached a political agreement with the Cypriot authorities on the cornerstones of a macroeconomic adjustment programme. The banking sector was to be restructured and downsized … In addition, the recapitalisation of the two largest banks was to be exclusively generated from within those banks (i.e. from shareholders, bondholders and depositors).’
141    Recital 9 of Decision 2013/236 is worded as follows:
‘Enhancing the long-term resilience of the Cypriot banking sector is critical to restoring financial stability in Cyprus and consequently, given the strong links, to preserving financial stability in the euro area as a whole. Substantial downsizing and restructuring of the Cypriot banking sector is under way. The Cypriot House of Representatives adopted legislation establishing a comprehensive framework for the recovery and resolution of credit institutions. Using that new framework, the Cypriot banking sector has been downsized immediately and significantly. To preserve the liquidity of the Cypriot banking sector, temporary administrative measures have been imposed, including capital controls.’
142    In those two recitals, the Council describes, in a generic manner, the efforts to restructure the financial sector already implemented by the Cypriot authorities, but does not detail the content of the harmful measures introduced on 29 March 2013, other than by a general reference to the role of the shareholders and depositors of the banks concerned in the recapitalisation of those banks, nor does it indicate that those measures should be maintained or that the Cypriot authorities should continue to implement them. The Council also does not make any more specific reference to the harmful measures introduced on 30 July 2013 by the amendments to the harmful decrees referred to in paragraphs 34 and 35 above.
143    As for Article 2(6) of Decision 2013/236, it states:
‘With a view to restoring the soundness of its financial sector, [the Republic of Cyprus] shall continue to thoroughly reform and restructure the banking sector and reinforce viable banks by restoring their capital, addressing their liquidity situation and strengthening their supervision. The programme shall provide for the following measures and outcomes:
(a)      ensuring that the liquidity situation of the banking sector shall be closely monitored. Recently imposed temporary restrictions on the free movement of capital … shall be closely monitored. The goal is that controls shall remain in place only for as long as is strictly necessary … The medium-term funding and capital plans of domestic banks relying on central bank funding or receiving state aid shall realistically reflect the anticipated deleveraging in the banking sector, and reduce dependency on borrowing from the central banks, while avoiding asset fire sales and a credit crunch. The regulations on the minimum liquidity requirements shall be updated to prevent excessive issuer concentration in the future;
(b)      establishing an independent valuation of the assets of [the banks concerned] and quickly integrating the operations of [Laïki] into [the BoC]. The valuation shall be completed quickly so as to enable the completion of the deposit-equity swap at [the BoC];
(c)      adopting the necessary regulatory requirements regarding an increase in the minimum core Tier 1 capital adequacy ratio to 9% by the end of 2013;
(d)      taking steps to minimise the cost to taxpayers of bank restructuring. Undercapitalised commercial and cooperative credit institutions shall raise, to the largest extent possible, capital from private sources before State aid measures are granted. Any restructuring plans shall be formally approved under State aid rules, before any State aid is provided. …;
(e)      ensuring that a credit register is created …;
(f)      strengthening the banks’ governance, including by prohibiting lending to independent board members or their connected parties;
(g)      maximising recovery for non-performing loans, while minimising incentives for strategic default by borrowers. …;
(h)      aligning the regulation and supervision of cooperative credit institutions with those of commercial banks;
(i)      ascertaining the viability of cooperative credit institutions and developing, in consultation with the Commission, the ECB and the IMF, a strategy for the future structure, functioning and viability of the cooperative credit institution sector … by mid-2015;
(j)      enhancing the monitoring of the indebtedness of the corporate and household sectors and establishing a framework for targeted private sector debt restructuring …;
(k)      … enhancing the anti-money laundering framework and ensuring full entity … transparency …;
(l)      introducing mandatory supervision based on capitalisation levels;
(m)      integrating stress-testing into … bank supervision; and
(n)      implementing a unified data reporting system for banks and credit institutions.’
144    Of those ‘measures and outcomes’, only those referred to, first, in Article 2(6)(b) of Decision 2013/236 and relating to the integration of Laïki into the BoC and the conversion of deposits in the BoC into shares and, secondly, in Article 2(6)(d) of the same decision and relating to the reduction of the cost of bank restructuring borne by the taxpayer, can be considered to relate to the harmful measures.
145    As regards, first of all, the integration of Laïki into the BoC, it is important to stress that Article 2(6)(b) of Decision 2013/236 merely identifies, in general terms, a measure that the Republic of Cyprus was required to adopt. That provision does not indicate that the integration of Laïki into the BoC must be carried out in a particular way. The Cypriot authorities therefore had at least a wide margin of discretion in defining those modalities. The integration of Laïki into the BoC was not, as such, liable to be vitiated by any of the illegalities complained of by the applicants. At most, the manner in which the measure was implemented could involve such an illegality. Therefore, assuming that it is true, the damage which the applicants consider that they have suffered as a result of the integration of Laïki into the BoC is not the result of Article 2(6)(b) of Decision 2013/236, but of the implementing measures adopted by the Republic of Cyprus in order to implement that integration.
146    As regards, next, the reduction of the cost of bank restructuring borne by the taxpayer, it should be observed that Article 2(6)(d) of Decision 2013/236, first, merely prescribes, in general terms, the adoption of measures to that end and, secondly, requires undercapitalised commercial and cooperative credit institutions to raise, to the greatest extent possible, capital from private sources before State aid is granted to them. Article 2(6)(d) of Decision 2013/236 does not refer to any specific means to be used for that purpose and therefore leaves the Republic of Cyprus a wide margin of discretion in that regard. That interpretation is corroborated by the fact that that provision refers to both commercial and cooperative credit institutions, whereas only the former were the subject of the harmful measures. Consequently, that provision cannot be read as requiring the maintenance or continued implementation by the Republic of Cyprus of the harmful measures.
147    Finally, as regards the conversion of deposits in the BoC into shares, it must be noted that Article 2(6)(b) of Decision 2013/236 requires an independent valuation of the assets of the banks concerned to be carried out within a period of time which allows that conversion to take place. It follows implicitly, but necessarily, that, without prejudice to the practical feasibility of such an exercise, Article 2(6)(b) of Decision 2013/236 did not allow the Cypriot authorities to reverse the conversion of BoC deposits into shares. In the circumstances of the present case and, in particular, in view of the financial situation of the banks concerned, the requirement that that conversion be maintained or implemented on an ongoing basis was, irrespective of its precise modalities, likely to involve one or more of the illegalities relied on by the applicants.
148    Therefore, it must be considered that the Council required, by means of Article 2(6)(b) of Decision 2013/236, that the Republic of Cyprus maintain or continue to implement the harmful measure consisting in converting uninsured deposits in the BoC into shares. By contrast, the Council did not, when adopting Decision 2013/236, require the maintenance or continued implementation by the Republic of Cyprus of the other harmful measures introduced on 29 March 2013 or the adoption of those introduced after that date by the amendments to the harmful decrees referred to in paragraphs 34 and 35 above.
149    However, in accordance with the considerations set out in paragraph 99 above, it is necessary to examine whether the Republic of Cyprus had a margin of discretion to dispense with the requirement of maintenance or continued implementation of the harmful measure referred to, at least implicitly, in Article 2(6)(b) of Decision 2013/236 and relating to the conversion of deposits in the BoC into shares.
150    In that regard, without it being necessary to rule on the binding value of Decision 2013/236 or its purpose in the context of the granting of the FAF, it must be noted that, by merely requiring, in general terms, that the Cypriot authorities maintain or continue to implement the conversion of uninsured deposits in the BoC into shares, without defining in any way the particular modalities of that operation, Article 2(6)(b) of that decision could not deprive the Cypriot authorities of a substantial margin of discretion for the purpose of defining the particular modalities of that conversion. Consequently, the damage allegedly suffered by the applicants as a result of that conversion results, in any event, not from that provision, but from the implementing measures adopted by the Republic of Cyprus in order to implement that conversion (see, to that effect, judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others, C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028, paragraphs 116 and 214).
151    It follows from the above that, in adopting Decision 2013/236, the Council did not require the maintenance and continued implementation of the measures introduced by the Republic of Cyprus on 29 March 2013, with the exception of that of converting uninsured deposits in the BoC into shares, for the application of which, however, the Cypriot authorities had a wide margin of discretion for the purpose of defining the particular details.
152    Secondly, as regards Implementing Decision 2013/463, it should be noted that the applicants do not put forward any specific argument against it. They merely point out that that implementing decision is in essence identical to Decision 2013/236 and that it was adopted as a result of the adoption of Regulation No 472/2013.
153    It should be noted that only recitals 3, 4 and 5 and Article 2(5)(c) of Implementing Decision 2013/463, which do not address most of the harmful measures directly, relate to issues related to them.
154    Recitals 3 and 4 of Implementing Decision 2013/463 are worded as follows:
‘Upon a request of 25 June 2012 by Cyprus for financial assistance from the ESM, the Council decided on 25 April 2013 by Decision 2013/236 …, that Cyprus was to rigorously implement a macroeconomic adjustment programme.
On 24 April 2013, the ESM Board of Governors decided to grant, in principle, stability support to Cyprus and approved the Memorandum of Understanding on Specific Economic Policy Conditionality … and its signing by the Commission on behalf of the ESM.’
155    First of all, it follows from recital 3 of Implementing Decision 2013/463 that, by Decision 2013/236, the Council decided that Cyprus should rigorously implement a macroeconomic adjustment programme. In that regard, it was held that the provisions of Decision 2013/236 cannot be read as requiring the maintenance or continued implementation by the Republic of Cyprus of the measures introduced on 29 March 2013 by the Republic of Cyprus, with the exception of the conversion of deposits in the BoC into shares, for the implementation of which, however, the Cypriot authorities had a wide margin of discretion for the purpose of defining the specific modalities (see paragraph 151 above). Therefore, it cannot be inferred from the reference to Decision 2013/236 in recital 3 of Implementing Decision 2013/463 that the Council required the Cypriot authorities to take the harmful measures.
156    Next, recitals 3 and 4 of Implementing Decision 2013/463 refer, first, to the application submitted by Cyprus on 25 June 2012 for financial assistance under the ESM and, secondly, to the agreement in principle given by the ESM Board of Governors on 24 April 2013 for the granting of stability support to Cyprus and to the approval of the memorandum of understanding and its signature by the Commission on behalf of the ESM. Therefore, those recitals do not detail the content of the harmful measures, nor do they indicate that those measures should be maintained or that the Cypriot authorities should continue to implement them.
157    Recital 5 of Implementing Decision 2013/463 is worded as follows:
‘In accordance with Article 1(2) of Decision 2013/236 …, the Commission, in liaison with the [ECB], and, where appropriate, with the [IMF], has conducted the first review to assess the progress with the implementation of the agreed measures as well as their effectiveness and economic and social impact. As a consequence of this review, an update has been made to the existing macroeconomic adjustment programme, reflecting the steps taken by the Cypriot authorities by the second quarter of 2013.’
158    The mere fact that the Commission, in liaison with, inter alia, the ECB, carried out an assessment of the implementation of the measures agreed in the context of the macroeconomic adjustment programme adopted at the time does not amount to a requirement that the Republic of Cyprus maintain or continue to implement some of the harmful measures.
159    Article 2(5)(c) of Implementing Decision 2013/463 provides:
‘With a view to restoring the soundness of its financial sector, Cyprus shall continue to thoroughly reform and restructure the banking sector and reinforce viable banks by restoring their capital, addressing their liquidity situation and strengthening their supervision. The programme shall provide for the following measures and outcomes:
…
(c)      taking steps to minimise the costs of bank restructuring carried by taxpayers. Undercapitalised commercial and cooperative credit institutions shall raise, to the largest extent possible, capital from private sources before State aid measures are granted. Any restructuring plans shall be formally approved under State aid rules, before any State aid is provided. …’
160    Thus, the terms of Article 2(5)(c) of Implementing Decision 2013/463 are identical to those of Article 2(6)(d) of Decision 2013/236, a provision in respect of which it was held, in paragraph 146 above, that it cannot be read as imposing the maintenance or continued implementation by the Republic of Cyprus of the harmful measures. It follows that Article 2(5)(c) of Implementing Decision 2013/463 cannot be read as requiring the maintenance or continued implementation by the Republic of Cyprus of the harmful measures.
161    The mere fact, referred to by the applicants, that Implementing Decision 2013/463 was taken in implementation of Regulation No 472/2013, the purpose of which is, inter alia, to enshrine in EU law the need for full consistency between the Union’s multilateral surveillance framework established by the TFEU and any economic policy conditions attached to the financial assistance, and Article 7(1) of which provides that where a Member State requests financial assistance from one or more other Member States or third countries, the European Financial Stabilisation Mechanism (EFSM), the ESM, the EFSF or the IMF, it is to prepare in agreement with the Commission, acting in liaison with the ECB and, where appropriate, the IMF, a draft macroeconomic adjustment programme which includes annual budgetary targets, in no way implies that that implementing decision required the maintenance or continued implementation by the Republic of Cyprus of the harmful measures.
162    It follows from the foregoing that the damage which might result from the harmful measures cannot be imputed to the Council by reason of the adoption of Decision 2013/236. It is furthermore clear that the same conclusions must be drawn in respect of Implementing Decision 2013/463.
(d)    Conclusion as to whether the defendants are responsible for the adoption, maintenance or continued implementation of the harmful measures
163    In the light of all the foregoing considerations, it must be held that the adoption, maintenance and continued implementation of the harmful measures cannot be imputed to the defendants. The Court therefore has no jurisdiction to deal with them in the present action.
3.      The liability of the European Union for certain acts and conduct of the defendants
164    The applicants’ arguments can be interpreted as meaning that, irrespective of the question whether the adoption of the harmful measures or, possibly, their maintenance or continued implementation is attributable to the defendants, certain acts and conduct of the defendants in connection with the grant of the FAF gave rise to the European Union’s liability. Those are, first, the acts and conduct by which the harmful decrees were, according to the applicants, approved by the Commission, the ECB and the Council, secondly, the conduct of the Commission and the ECB in relation to the Memorandum of Understanding of 26 April 2013, and thirdly, the provision by the defendants, excluding the Eurogroup, of precise assurances as to the non-adoption of the harmful measures and, fourthly, the various decisions adopted by the ECB with regard to ELA from which Laïki benefited.
165    It is necessary to determine, in relation to each of those acts or conduct, whether it is capable of giving rise to liability on the part of the European Union.
166    First, as regards the defendants’ alleged approval of the harmful decrees (see paragraph 164 above), it should be noted that the applicants do not describe precisely the acts or conduct which they are referring to, but merely refer to the ‘conditionality which the defendant institutions endorsed and approved by agreeing to the granting of financial assistance’. It is, however, possible to deduce from the structure of their argument that, in addition to certain acts of the Eurogroup which the Court cannot hear and determine in the context of the present action (see paragraph 95 above), they are thus referring, first, to the supervision by the Commission and the ECB of the implementation of the harmful measures under Article 13(7) of the ESM Treaty and, secondly, to the supervision of the implementation of the macroeconomic adjustment programme under Article 1(2) of Decision 2013/236. In so far as the applicants submit that Implementing Decision 2013/463 is, in essence, identical to Decision 2013/236, which it repealed, that that implementing decision entered into force on 17 September 2013 and that they refer to monitoring which continued after that date, it is clear from their argument that they are also referring to the monitoring of the implementation of the macroeconomic adjustment programme under Article 1(2) of that implementing decision.
167    In support of that argument, the applicants rely on the judgment of 14 July 1967, Kampffmeyer and Others v Commission (5/66, 7/66, 13/66 to 16/66 and 18/66 to 24/66, EU:C:1967:31, p. 317), from which it follows that the European Union may be held liable for approving acts by the EU institutions which have caused damage to an applicant.
168    In that regard, the Court observes that the supervision by the Commission and the ECB of the implementation of the harmful measures under Article 13(7) of the ESM Treaty will be considered together with the other conduct of those institutions relating to the Memorandum of Understanding of 26 April 2013 (see paragraphs 170 to 176 below).
169    It must be noted that the supervision by the Commission and the ECB of the implementation of the macroeconomic adjustment programme under Article 1(2) of Decision 2013/236 and Article 1(2) of Implementing Decision 2013/463 falls within the scope of a specific competence conferred by EU law on the institutions of the Union and is therefore capable of giving rise to liability on the part of the European Union.
170    Secondly, the applicants refer to several forms of conduct of the Commission and the ECB relating to the Memorandum of Understanding of 26 April 2013, namely the ‘decision empowering the Commission to conclude the [Memorandum of Understanding of 26 April 2013]’, that is to say, first, the conclusion of that memorandum of understanding and, secondly, ‘the act by which the Commission, as an EU body, accepted to conclude [that] memorandum of understanding, to the extent that it exists’ (see paragraph 128 above), as well as the supervision of the implementation of the harmful measures by the ECB and the Commission under Article 13(7) of the ESM Treaty. In the application, the applicants also refer to the negotiation of that memorandum of understanding.
171    As a preliminary point, with regard to the ‘decision empowering the Commission to conclude the [Memorandum of Understanding of 26 April 2013]’, the applicants in vain rely on the combined provisions of the fifth subparagraph of Article 7(1) and the second subparagraph of Article 7(2) of Regulation No 472/2013, which they interpret as meaning that, in negotiating and concluding the memorandum of understanding, the Commission is subject to the obligation imposed by EU law to ensure that the memorandum of understanding is consistent with EU law. It should be noted that that regulation entered into force on 30 May 2013, that is to say, after the adoption of the Memorandum of Understanding of 26 April 2013, so that its provisions could not have imposed any obligation on the Commission at the time of the negotiation and signature of the memorandum of understanding or of the empowerment of that institution in that regard. It is therefore clear that the arguments based on the provisions of Regulation No 472/2013 are unfounded.
172    With regard to the conclusion of the memorandum of understanding, it is important to note that the tasks entrusted to the Commission and the ECB by the ESM Treaty do not distort the powers conferred on those institutions by the EU and FEU Treaties. In particular, as regards the Commission, Article 13(3) and (4) of the ESM Treaty imposes on it the obligation to ensure the compatibility with EU law of the memoranda of understanding concluded by the ESM, so that it retains, in the context of the ESM Treaty, its role as guardian of the Treaties, as set out in Article 17(1) TEU, according to which it ‘shall promote the general interest of the Union’ and ‘shall oversee the application of Union law’. It is thus required to refrain from signing a memorandum of understanding whose compatibility with EU law it doubts (see, to that effect, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 56 to 59).
173    Consequently, an applicant is entitled to rely on unlawful conduct by the Commission in relation to the adoption of the Memorandum of Understanding of 26 April 2013 on behalf of the ESM in the context of an action for damages (see, to that effect, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 55).
174    Contrary to the ECB’s allegations, it cannot be inferred from the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701), that the unlawful conduct of the Commission in connection with the adoption of a memorandum of understanding is the only unlawful conduct of an EU institution in the context of the ESM Treaty which may give rise to the latter’s non-contractual liability. First of all, the Court of Justice held in that judgment that the legal nature of the acts of the ESM, which bind only the ESM and do not fall within the legal order of the European Union, was not such as to preclude the Commission and the ECB from being held liable for certain unlawful conduct connected, where appropriate, with the adoption of a memorandum of understanding on behalf of the ESM, in the context of an action for non-contractual liability (see, to that effect, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 53 to 55). Second, while it is true that Article 17(1) TEU and Article 13(3) and (4) of the ESM Treaty impose obligations on the Commission which are not incumbent on the ECB (see paragraph 172 above), the fact remains that, through its functions under the ESM Treaty, the ECB supports the general economic policies of the European Union under Article 282(2) TFEU (judgment of 27 November 2012, Pringle v Commission, C‑370/12, EU:C:2012:756, paragraph 165). Finally, it is important to emphasise that, like the Commission, the ECB is bound to respect the Charter of Fundamental Rights of the European Union (‘the Charter’) when acting outside the legal framework of the European Union (see, to that effect, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 67). It follows that unlawful conduct relating to the monitoring of the application of harmful measures by the ECB and the Commission may be relied on against them in an action for damages.
175    The negotiation and signing of the Memorandum of Understanding of 26 April 2013 by the Commission and the monitoring of the implementation of the harmful measures by the ECB and the Commission under Article 13(7) of the ESM Treaty are therefore likely to give rise to liability on the part of the European Union.
176    By contrast, those considerations are not applicable to ‘the act by which the Commission, as an EU body, accepted to conclude [that] memorandum of understanding, to the extent that it exists’. It should be noted that the applicants refer by that expression to an act of the Union under which the Commission was specifically empowered to proceed to the conclusion of the Memorandum of Understanding of 26 April 2013. However, it was the ESM Board of Governors which, at its meeting of 24 April 2013, instructed the Commission to sign the draft memorandum of understanding negotiated, on the one hand, by the Commission, in collaboration with the ECB and the IMF, and, on the other hand, by the Republic of Cyprus (see paragraph 136 above). Such an act is attributable only to the ESM and in no way precludes the unlawful character of the conduct which the Commission will adopt by virtue of such an authorisation. It is therefore clear that that act is not capable of giving rise to liability on the part of the European Union.
177    Thirdly, as regards the provision by the defendants of precise assurances as to the non-adoption of harmful measures, it is important to recall that the principle of the protection of legitimate expectations is a general principle of EU law, of higher rank, aimed at protecting individuals (see, to that effect, judgment of 19 May 1992, Mülder and Others v Council and Commission, C‑104/89 and C‑37/90, EU:C:1992:217, paragraph 15), the infringement of which by an EU institution may give rise to liability on the part of the European Union (see, to that effect, judgment of 26 June 1990, Sofrimport v Commission, C‑152/88, EU:C:1990:259, paragraph 26).
178    Consequently, the transmission of such assurances is likely to give rise to liability on the part of the European Union.
179    Fourthly, the decisions adopted by the ECB in relation to ELA are acts adopted by an EU institution in the exercise of a competence conferred on it by EU law and are therefore liable to give rise to liability on the part of the European Union.
4.      Conclusion on the Court’s jurisdiction
180    In the light of all the foregoing considerations, the Court must be held to have jurisdiction to hear the present action in so far as it concerns, first, the alleged approval of the harmful decrees by the defendants, with the exception of the Eurogroup, secondly, the negotiation and signing by the Commission of the Memorandum of Understanding of 26 April 2013, thirdly, the monitoring by the Commission and the ECB of the implementation of the harmful measures under Article 13(7) of the ESM Treaty, fourthly, the alleged communication of specific assurances by the defendants, with the exception of the Eurogroup, that the harmful measures would not be adopted, and fifthly, the decisions adopted by the ECB with regard to ELA.
B.      Admissibility
1.      Compliance with formal requirements
181    In the context of the plea of inadmissibility, the Council submits that the application does not satisfy the requirements of the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union and Article 76(d) and (e) of the Rules of Procedure, since it does not set out with sufficient precision the reasons why Decision 2013/236 is unlawful and the reasons why there is a causal link between that decision and the damage for which compensation is sought.
182    The applicants respond that those reasons and grounds are apparent from the application. Decision 2013/236 and its successor, Implementing Decision 2013/463, make the macroeconomic adjustment programme for the Republic of Cyprus compulsory in order to ensure consistency between the multilateral surveillance enshrined in the TFEU and the conditions laid down for financial assistance. The obligations contained in the Memorandum of Understanding of 26 April 2013, which are allegedly unlawful, therefore also derive from EU law.
183    It should be noted that, under the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union, which is applicable to proceedings before the General Court in accordance with the first paragraph of Article 53 of the Statute, and Article 76(d) and (e) of the Rules of Procedure, the application must contain the subject matter of the proceedings, the pleas in law and arguments relied on and a summary of those pleas in law and the form of order sought by the applicant. Those elements must be sufficiently clear and precise to enable the defendant to prepare his or her defence and the Court to rule on the action, if necessary without further information. In order to ensure legal certainty and the proper administration of justice, it is necessary, in order for an action to be admissible, that the essential matters of fact and law on which it is based be apparent, at least in summary form, but in a coherent and comprehensible manner, from the text of the application itself (see order of 27 March 2017, Frank v Commission, T‑603/15, not published, EU:T:2017:228, paragraph 38 and the case-law cited).
184    In order to satisfy those requirements, an application seeking compensation for damage allegedly caused by an institution, body, office or agency of the European Union or by one of its servants acting in the exercise of his or her functions must contain the elements which make it possible to identify the conduct of the defendant of which the applicant complains, the reasons why the applicant considers that there is a causal link between the conduct and the damage it claims to have suffered and the nature and extent of that damage (judgment of 18 September 2014, Holcim (Romania) v Commission, T‑317/12, EU:T:2014:782, paragraph 55).
185    It is necessary to ascertain whether the present action complies with those formal requirements in so far as it relates to the acts and conduct in respect of which the Court has jurisdiction and which are set out in paragraph 180 above.
186    First, as regards the defendants’ alleged approval of the harmful decrees, it should be noted that, for the purposes of establishing the existence of a causal link between, on the one hand, the monitoring of the macroeconomic adjustment programme under Article 1(2) of Decision 2013/236 and Article 1(2) of Implementing Decision 2013/463 and, on the other hand, the alleged damage, the applicants merely rely on the judgment of 14 July 1967, Kampffmeyer and Others v Commission (5/66, 7/66, 13/66 to 16/66 and 18/66 to 24/66, EU:C:1967:31, p. 245), from which it follows that the European Union’s liability may be incurred on the ground that the EU institutions have approved acts which have caused damage to an applicant.
187    It should be pointed out that Article 1(2) of Decision 2013/236 provides, inter alia, that the Commission, in liaison with the ECB and, where appropriate, the IMF, is to monitor the progress of the Republic of Cyprus in the implementation of its programme. Article 1(3) of Decision 2013/236 provides that the Commission, first, in liaison with the ECB and, where appropriate, the IMF, is to examine with the Cypriot authorities any necessary modifications or updates to the programme and, secondly, to provide, on an ongoing basis, advice and guidance on fiscal, financial market and structural reforms and, finally, to assess at regular intervals the economic impact of the programme and recommend the necessary adjustments with a view to enhancing growth and employment creation, ensuring the required fiscal consolidation and minimising negative social impacts.
188    As for the provisions of Article 1(2) and (3) of Implementing Decision 2013/463, they are drafted in the same terms, except that paragraph 2 provides that the Cypriot authorities are to consult in advance with the Commission, the ECB and the IMF on the adoption of policies which are not covered by that implementing decision but which could have a material impact on the achievement of the programme’s objectives, and paragraph 3 provides that the macroeconomic adjustment programme is to be made public.
189    None of those obligations on the Commission entail, as such, any decision-making or enforcement powers. Any approval which the Commission might have issued in the context of the implementation of its responsibilities under Article 1(2) of Decision 2013/236 would therefore have been non-binding and consequently not binding on the Cypriot authorities. It is clear that the same conclusions must be drawn with regard to Article 1(2) and (3) of Implementing Decision 2013/463.
190    It follows that the Republic of Cyprus, which was not obliged to adopt the harmful measures (see paragraphs 100 to 122 above), was also not obliged to seek authorisation from the Commission or the ECB to adopt them. As can be seen from paragraphs 186 to 189 above, the Commission and the ECB did not, in any event, give the Cypriot authorities any such authorisation by the acts or conduct referred to in those paragraphs.
191    Conversely, in the judgment of 14 July 1967, Kampffmeyer and Others v Commission (5/66, 7/66, 13/66 to 16/66 and 18/66 to 24/66, EU:C:1967:31, p. 245), the Court of Justice held that the European Community was liable because the Commission had wrongly authorised the adoption by the Federal Republic of Germany of certain agricultural safeguard measures. In that case, the Commission’s authorisation was a necessary condition for the adoption of those measures. The event giving rise to the Community’s liability was therefore not the mere approval by one of its institutions of the measures taken by a Member State, but the authorisation of those measures, without which they could not have been implemented.
192    Therefore, mere reference to the judgment of 14 July 1967, Kampffmeyer and Others v Commission (5/66, 7/66, 13/66 to 16/66 and 18/66 to 24/66, EU:C:1967:31, p. 245) does not make it possible to understand in what way approving the adoption of the harmful measures was likely to give rise to the financial loss relied upon by the applicants.
193    It follows that the present action is manifestly inadmissible in so far as it relates to the alleged approval of the adoption of the harmful decrees by the defendants.
194    Secondly, as regards the applicants’ allegations concerning the negotiation of the Memorandum of Understanding of 26 April 2013, they are not the subject of any specific and detailed development in the parts of their pleadings devoted to legal argument. In particular, there is nothing in those pleadings which makes it possible to identify the grounds on which the applicants consider that the conduct of the Commission or the ECB in the context of the negotiation of the Memorandum of Understanding of 26 April 2013 contributed to causing the alleged damage.
195    It follows that the present action is manifestly inadmissible in so far as it relates to the negotiation of the Memorandum of Understanding of 26 April 2013 by the defendants.
196    Thirdly, as regards ‘the acts by which the defendants required the Republic of Cyprus to adopt the Law of 22 March 2013 and the harmful decrees’, which form part of the contested acts, it should be noted that the applicants do not, in their written submissions, provide any details which would make it possible to identify those measures with certainty, assuming that they are distinct from the other contested acts prior to 22 March 2013.
197    The present action is therefore manifestly inadmissible in so far as it relates to ‘the acts by which the defendants required the Republic of Cyprus to adopt the Law of 22 March 2013 and the harmful decrees’.
198    It follows that the present action complies with the applicable formal requirements in so far as it relates to, first, the signing by the Commission of the Memorandum of Understanding of 26 April 2013, secondly, the monitoring by the Commission and the ECB of the implementation of the harmful measures under Article 13(7) of the ESM Treaty, thirdly, the alleged communication of specific assurances by the defendants, with the exception of the Eurogroup, that the harmful measures would not be adopted and, fourthly, the decisions adopted by the ECB in relation to ELA.
2.      The alleged failure to exhaust domestic remedies
199    In the context of its arguments concerning the alleged damage, the Commission submits, in essence, that, to the extent that the immediate cause of that damage lies in national measures, that no ancillary damage can be attributed to the Union alone and that the unlawfulness relied on is only indirectly linked to alleged Union action, the applicants must exhaust national remedies before the EU judicature can rule on their claim for compensation.
200    The applicants respond that, under the case-law, they were not obliged to bring actions before the national courts before bringing their case before the Court, since, first, the harmful measures are attributable to the European Union and, secondly, those courts could not guarantee them effective judicial protection.
201    In so far as they can be interpreted as relating to the admissibility of the present action and not to the alleged damage alone, the Commission’s arguments must be rejected.
202    According to the case-law, an action for damages under Article 268 TFEU and the second and third paragraphs of Article 340 TFEU must be assessed in the light of the entire system of judicial protection of individuals and its admissibility may therefore be made subject, in certain cases, to the prior exhaustion of national remedies that are available for obtaining annulment of a decision of a national authority, provided that those remedies under domestic law effectively ensure protection for the individuals concerned in that they are capable of resulting in compensation for the damage alleged (see, to that effect, judgment of 30 May 1989, Roquette frères v Commission, 20/88, EU:C:1989:221, paragraph 15 and the case-law cited, and of 13 December 2006, É.R. and Others v Council and Commission, T‑138/03, EU:T:2006:390, paragraph 40).
203    In a judgment of 18 September 2014, Holcim (Romania) v Commission (T‑317/12, EU:T:2014:782, paragraphs 73 to 77), the Court clarified that cases of inadmissibility due to non-exhaustion of domestic remedies were limited to the situation where the non-exhaustion of those remedies prevented the Courts of the European Union from identifying the nature and quantum of the damage relied on before it, so much so that the requirements of Article 44(1)(c) of the Rules of Procedure of the General Court of 2 May 1991, reproduced in Article 76(d) and (e) of the Rules of Procedure, as interpreted by the case-law cited in paragraphs 183 and 184 above, were not satisfied.
204    In the present case, the Court is in a position to identify the nature and quantum of the alleged damage, which the applicants have described with a sufficient degree of precision in their written submissions and the annexes thereto. Consequently, and without even needing to determine whether the acts and conduct referred to in paragraph 198 above could be the subject of an action before the national courts, it cannot be held that the present action is inadmissible solely on the ground that the applicants have not exhausted domestic remedies.
205    In those circumstances, it could at most be considered that the bringing of an action by one or more applicants before a national court seeking compensation for the same loss as the present action is likely to have a bearing on the examination of the merits of that action. According to the case-law, where, first, a person has brought two actions seeking compensation for one and the same loss, one directed against a national authority before a national court and the other directed against an EU institution before the EU judicature, and, secondly, there is a risk that because of different assessments of that damage by the two courts seised, that person may be inadequately or wrongfully compensated, the EU judicature must, before ruling on the damage, wait until the national court has ruled on the action brought before it by a final decision (see, to that effect, judgments of 14 July 1967, Kampffmeyer and Others v Commission, 5/66, 7/66, 13/66 to 16/66 and 18/66 to 24/66, EU:C:1967:31, p. 266, and of 13 December 2006, É.R. and Others v Council and Commission, T‑138/03, EU:T:2006:390, paragraph 42). In such a case, the EU judicature is obliged to wait until the national court has ruled before deciding on the existence and quantum of the damage. By contrast, it is possible for the EU judicature, even before the national court has given judgment, to determine whether the conduct complained of by the defendant institution is such as to give rise to non-contractual liability on the part of the European Union (see, to that effect, judgment of 18 September 2014, Holcim (Romania) v Commission, T‑317/12, EU:T:2014:782, paragraph 80).
206    Therefore, even if one or more of the applicants in the present case had brought an action before the Cypriot courts seeking compensation for the same damage as the present action, there is nothing to prevent the Court from ruling on the alleged illegalities even before those courts have given judgment.
C.      Conclusion on the jurisdiction of the Court and on the admissibility of the application
207    In the light of all the foregoing, it must be held that the Court has jurisdiction to hear the present action and that it is admissible in so far as it relates to, first, the signing by the Commission of the Memorandum of Understanding of 26 April 2013, secondly, the supervision by the Commission and the ECB of the implementation of the harmful measures under Article 13(7) of the ESM Treaty, thirdly, the alleged communication of specific assurances by the defendants, with the exception of the Eurogroup, that the harmful measures would not be adopted and, fourthly, the decisions adopted by the ECB in relation to ELA.
208    By contrast, as regards the other acts and conduct of which the applicants accuse the defendants, it is necessary to conclude, in part, that the action is inadmissible and, in part, that the Court does not have jurisdiction to deal with them. Only the pleas and arguments of the parties relating to the acts and conduct referred to in paragraph 207 above will therefore be examined on the merits.
D.      Substance
209    It is settled case-law, applicable mutatis mutandis to the non-contractual liability of the ECB under the third paragraph of Article 340 TFEU, that the non-contractual liability of the European Union, within the meaning of the second paragraph of Article 340 TFEU, is subject to the fulfilment of a number of conditions, namely the illegality of the conduct of which the EU institution is accused, the reality of the damage and the existence of a causal link between the conduct of the institution and the damage relied on (see, to that effect, judgments of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 64 and the case-law cited, and of 7 October 2015, Accorinti and Others v ECB, T‑79/13, EU:T:2015:756, paragraph 65). In so far as those three conditions must be cumulatively satisfied, the fact that one of them is lacking is sufficient to dismiss an action for damages (judgment of 9 September 1999, Lucaccioni v Commission, C‑257/98 P, EU:C:1999:402, paragraph 14).
210    In the present case, it is appropriate to begin by examining whether the first of those conditions, relating to the unlawfulness of the conduct alleged against the defendants, is satisfied.
211    In that regard, the Court of Justice has already made it clear on numerous occasions that the incurrence of non-contractual liability on the part of the European Union requires the establishment of a sufficiently serious breach of a rule of law the purpose of which is to confer rights on individuals (see judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 65 and the case-law cited).
212    As a preliminary point, it should be noted that, in their observations as to the consequences which they drew, for the present dispute, from the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), and, to the extent necessary and to the extent that they had not been set aside by the Court of Justice, the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), the applicants submit that Advocate General Pitruzzella, in his Opinion in Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:390), did not respond to all of their arguments in the appeal, which is contrary to the principle of equality of arms.
213    In that regard, it should be noted that the present action concerns the European Union’s liability for the contested acts referred to in paragraph 56 above. It follows that the applicants’ argument alleging breach of the principle of equality of arms, in so far as it relates to an alleged illegality vitiating not those contested acts but the procedure which gave rise to the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), must be rejected as manifestly ineffective.
214    In their application, the applicants claim that the defendants acted without taking into account the interests of the closed group of depositors of the banks concerned, in serious and flagrant breach of three rules of EU law for the protection of individuals, namely the right to property, the principle of protection of legitimate expectations and the principle of equal treatment.
215    The Council and the ECB reply, in essence, that neither the acts and conduct referred to in paragraph 207 above nor the harmful measures are in breach of EU law.
216    The Commission, considering that the harm alleged is attributable solely to the Republic of Cyprus, refrains from systematically defending the legality of measures which the latter has unilaterally adopted and confines itself, in essence, to making targeted observations on the illegalities alleged by the applicants.
217    The Court will examine in turn the alleged infringements, first, of the right to property (see paragraphs 218 to 375 below), secondly, of the principle of the protection of legitimate expectations (see paragraphs 376 to 418 below) and, thirdly, of the principle of equal treatment (see paragraphs 419 to 479 below).
1.      The existence of a possible infringement of the right to property
218    The applicants considered that they had been deprived of their right to property over the deposits they had made in the banks concerned, in breach of Article 17(1) of the Charter and the case-law of the European Court of Human Rights (‘the ECtHR’).
219    The defendants contest the applicants’ arguments.
220    It is settled case-law that the right to property guaranteed by Article 17(1) of the Charter is not an absolute prerogative. As is apparent from Article 52(1) of the Charter, restrictions may be placed on the use of that right, provided that they meet objectives of general interest pursued by the European Union and do not constitute, in the light of the aim pursued, disproportionate and intolerable interference which would undermine the very substance of that right (see, to that effect, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 69 and 70 and the case-law cited).
221    In that regard, it follows from Article 12 of the ESM Treaty that the adoption of a memorandum of understanding such as that of 26 April 2013 meets an objective of general interest pursued by the European Union, namely to ensure the stability of the banking system of the euro area as a whole. Financial services play a central role in the EU economy. Since banks, which are an essential source of financing for businesses, are often interconnected, the failure of one or more banks is likely to spread rapidly to other banks, either in the Member State concerned or in other Member States, and, consequently, to produce negative knock-on effects in other sectors of the economy (see, to that effect, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 71 and 72 and the case-law cited; ECtHR, 10 July 2012, Grainger and Others v. United Kingdom, CE:ECHR:2012:0710DEC003494010, §§ 39 and 42, and 21 July 2016, Mamatas and Others v. Greece, CE:ECHR:2016:0721JUD006306614, § 103).
222    In the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 73 to 75), the Court of Justice held that, having regard to the objective of general interest referred to in paragraph 221 above and having regard to the imminent risk of economic loss to which depositors in the banks concerned would have been exposed in the event of the latter’s bankruptcy, three of the harmful measures described in paragraphs 32 to 36 above did not constitute, as they appeared from paragraphs 1.23 to 1.27 of the Memorandum of Understanding of 26 April 2013, a disproportionate and intolerable interference with the very substance of those depositors’ right to property and could not therefore be regarded as unjustified restrictions of the latter. Those measures include, first, the takeover by the BoC of the insured deposits of Laïki and the maintenance of the uninsured deposits in Laïki, pending its liquidation, secondly, the conversion of 37.5% of the uninsured deposits in the BoC into shares with full voting and dividend rights, and thirdly, the temporary freezing of another part of those uninsured deposits, it being specified that, if the BoC were to be overcapitalised in relation to the objective of a core tier one capital target of 9% under stress, a share buyback would be carried out in order to reimburse the holders of uninsured deposits by the amount of the overcapitalisation (together, ‘the first three harmful measures’).
223    By contrast, in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 73 to 75), the Court of Justice did not examine the conformity with the right to property of the harmful measure relating, in essence, to the sale of the Greek branches, as set out in paragraph 1.24 of the Memorandum of Understanding of 26 April 2013 and provided for in Decrees No 96 and No 97 (see paragraph 32 above).
224    In a first step, the Court will assess whether the first three harmful measures (see paragraphs 225 to 300 below) and the sale of the Greek branches (see paragraphs 301 to 333 below) are compatible with the applicants’ right to property. In a second step, the Court will examine the arguments, alleging infringement of Article 14.4 of the ECB Statute, the right to sound administration and the requirements of fairness and consistency, which the applicants raise in support of their claim of breach of property rights (see paragraphs 334 to 375 below).
(a)    The first three harmful measures
225    In the present case, the applicants do not dispute that, as held by the Court of Justice in its judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701) (see paragraphs 221 and 222 above), the objective pursued by the first three harmful measures is in the public interest. The applicants nevertheless dispute the applicability to the present case of the conclusion reached by the Court of Justice in that judgment that the first three harmful measures did not constitute an excessive and intolerable intervention affecting the very substance of the right to property of the depositors in the banks concerned and could not therefore be regarded as unjustifiably restricting it. They put forward three arguments in that regard, relating, first, to the nature of the examination carried out by the Court of Justice in that judgment (see paragraphs 226 to 228 below), secondly, to the evidence relied on by the applicants in the case which gave rise to that judgment (see paragraphs 229 to 232 below) and, thirdly, to compliance with the requirements that any restriction on the right to property must be provided for by law and proportionate to the aim pursued (see paragraphs 233 to 299 below).
(1)    The nature of the review carried out by the Court of Justice in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P)
226    The applicants point out that, in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701), the Court of Justice confined itself to examining the existence of a possible infringement of the depositors’ right to property from the point of view of the inclusion in the Memorandum of Understanding of 26 April 2013 of paragraphs 1.23 to 1.27, which related, inter alia, to the first three harmful measures. The Court of Justice therefore did not examine the conduct of the defendants whose illegality is invoked in the present case. That conduct formed part of a continuum which began with the defendants’ interventions before the signing of the memorandum of understanding and continued with their interventions after the signing thereof.
227    That argument stems from a misreading of the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701). Admittedly, the Court of Justice concluded, in paragraph 75 of that judgment, that it could not be held that, by having allowed the adoption of paragraphs 1.23 to 1.27 of the Memorandum of Understanding of 26 April 2013, the Commission had contributed to an infringement of the applicants’ right to property. In order to do so, however, the Court of Justice examined, in paragraphs 73 and 74 of the same judgment, whether the first three harmful measures, as set out in paragraphs 1.23 to 1.27 of that memorandum, in themselves infringed the applicants’ right to property. The reasoning set out in those paragraphs therefore concerned the intrinsic legality of those measures. As to the applicants’ allegation that the conduct complained of formed part of a continuum, that has already been rejected in paragraph 125 above.
228    The applicants’ first argument must therefore be rejected.
(2)    The evidence submitted by the applicants in the case leading to the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P)
229    The applicants submit that the conclusion reached by the Court of Justice in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701) as to the existence of an infringement of the right to property must be read in the light of the applicants’ narrow claims in that case. It is clear that, in the case which gave rise to that judgment, neither the General Court nor the Court of Justice examined any evidence of a breach of the right to property. In the present case, however, the applicants have provided extensive evidence relating to the circumstances leading up to the adoption of the ‘Eurogroup statement’ and explaining the defendants’ conduct before and after that statement. That evidence, which the Court of Justice did not examine in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701), should be examined carefully in the present case in order to determine whether the harmful measures constitute a disproportionate interference with the applicants’ right to property and to guarantee their right to effective judicial protection. Moreover, the grounds of illegality relied on in the present case are more extensive.
230    In that regard, it should be noted that the evidence to which the applicants refer concerns, in the first place, the imputability of the harmful measures to the defendants and the reality of the harm claimed. That evidence is not, in itself, such as to show that the conclusions reached by the Court of Justice in its judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701) as to the existence of such an infringement are inapplicable to the present case.
231    Consequently, the applicants’ second argument must be rejected in so far as it concerns evidence relating to the imputability of the harmful measures to the defendants and the reality of the harm invoked.
232    In so far, however, as some of the evidence to which the applicants refer could be regarded as tending to establish that the first three harmful measures are vitiated by an infringement of the right to property, it will, in so far as is necessary, be considered in the context of the assessment of the applicants’ arguments, which are based, in their view, on broader grounds of illegality than those relied on in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701), relating to the requirements that any restriction on the right to property must be provided for by law and proportionate to the aim pursued.
(3)    Compliance with the requirement that any restriction of the right to property must be provided for by law and proportionate to the aim pursued
233    The applicants claim, in essence, that the first three harmful measures are vitiated by a manifest breach of their right to property, in that those measures were not provided for by law and were adopted without giving them the opportunity to exercise their rights of defence and despite the existence of less restrictive measures, such as a gradual reduction in the amount of deposits. In that regard, the applicants had already indicated in their application that it follows from Article 17(1) of the Charter that any restriction on the right to property must be both prescribed by law and proportionate to the aim pursued.
234    The Court will examine in turn the conformity of the first three harmful measures with the requirements that any restriction of the right to property must, first, be provided for by law and, secondly, be proportionate to the aim pursued. In doing so, the Court will take into account that, in accordance with paragraph 1.27 of the Memorandum of Understanding of 26 April 2013, the uninsured deposits in the BoC that had been frozen could be converted into shares, which was the case here (see paragraphs 33 and 34 above).
(i)    The requirement that any restriction of the right to property must be provided for by law
235    In support of their claim that the harmful measures were not provided for by law, the applicants invoke the case-law of the European Court of Human Rights concerning Article 1 of Additional Protocol No 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), which requires that any restriction on the right to property be based on a clear, foreseeable and accessible legal framework.
236    According to the applicants, no rule of EU law allowed the defendants, at the material time, to adopt the harmful measures, nor did Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014, establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council (OJ 2014 L 173, p. 190), or Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ 2014 L 225, p. 1), which was not in force at the time. Moreover, the harmful measures do not satisfy ‘the requirements of legal certainty, due process, and foreseeability by any legal standard’. Thus, the harmful measures were adopted by the Governor of the CBC on the basis of the discretion conferred on him by an imprecise law which did not provide either for a clear compensation procedure or for a right to judicial protection, while no provision was made at Cypriot or EU level for consulting interested parties or for giving depositors in the banks concerned the opportunity to express their views.
237    The Council and the ECB contest the applicants’ arguments.
238    It should be noted that, under Article 17(1) and Article 52(1) of the Charter, no one may be deprived of his or her property except in the public interest, in cases and under conditions prescribed by law, and subject to fair compensation being paid in due course for its loss. For the purposes of determining the scope of that right, account must be taken, in the light of Article 52(3) of the Charter, of Article 1 of Additional Protocol No 1 to the ECHR (see, to that effect, judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraph 356). According to the case-law of the ECtHR, the words ‘in accordance with the law’ not only require that the harming measure has a basis in domestic law, but also refer to the quality of the law in question, requiring that it be accessible to the persons concerned and foreseeable as to its effects (see, to that effect, ECtHR, 13 July 2010, Kurić and Others v. Slovenia, CE:ECHR:2010:0713JUD002682806, § 363).
239    It is therefore necessary to examine whether the first three harmful measures were adopted in the absence of a clear, foreseeable and accessible legislative framework and which provides for a system of compensation and appropriate legal protection.
240    In that regard, in the first place, it should be noted that the harmful measures were taken by the Governor of the CBC, pursuant to the Law of 22 March 2013, which was approved by the Cypriot Parliament.
241    It is true that, as the applicants claim, in essence, the Law of 22 March 2013 confers broad powers on the CBC. In particular, the latter may restructure the debts and obligations of an institution subject to a resolution procedure (Section 12(1) of the Law of 22 March 2013, see paragraph 25 above), require, irrespective of the existence of other legislative and statutory provisions, the increase of the capital of such an institution (Section 8(1) of the Law of 22 March 2013) and order the sale of certain of its activities without the need to obtain the consent of its board of directors or shareholders (Section 9(1) of the Law of 22 March 2013). However, the mere fact that the measures which may be adopted under the Law of 22 March 2013 are numerous or extensive in scope does not mean that that law lacks clarity, precision or predictability.
242    In the second place, it should be noted that the Law of 22 March 2013 provides for a series of guarantees for the benefit of the creditors of the banks concerned. First, Section 3(2)(a) and (b) of that law provides that the shareholders of an institution subject to a resolution procedure are the first to bear any loss resulting from the implementation of resolution measures, whereas the creditors of such an institution bear such losses only after the shareholders. Section 3(2)(d) of that law provides that measures adopted on the basis of the latter may not place such creditors in a less favourable financial situation than that in which they would find themselves in the event of the liquidation of the institution in question. Section 12(14) of that law specifies that, in the event of a restructuring, pursuant to Section 12(1) of that law, of the debts and obligations of an institution subject to a resolution procedure, the parties affected are to receive, in payment of their claims, at least the amount which they would have received, under Cypriot law, in the event of the liquidation of that institution (see paragraph 25 above).
243    Secondly, even assuming that the requirement that any restriction of the right to property must be provided for by law requires that the procedure for compensating the loss resulting from such a restriction must, where appropriate, also be provided for by law, it follows from Section 26(1) of the Law of 22 March 2013 that any party who considers that its right to property has been unduly prejudiced by resolution measures retains the right to bring an action before the competent national court to claim compensation. Section 26(2) and (3) of that law specifies that, if the affected party considers that its financial position has deteriorated significantly in relation to that in which it would have been if no resolution measure had been taken and if the bank concerned had been put directly into liquidation, it may claim compensation only for the losses suffered without prejudice to the transaction concluded or any act or measure adopted on the basis of that law.
244    In that sense, first, the applicants submit that, in accordance with Section 26(3) of the Law of 22 March 2013, claims made may not be directed either against the resolution authority, subject to the cases provided for in Section 29 of that law, or against the person who benefits from a transfer of activities, property or assets resulting from the adoption of a resolution measure. The applicants consider that it is therefore impossible to understand against whom an action could be brought.
245    In that regard, it is important to note that the question concerning against whom an action may be brought for compensation for damage unlawfully caused by a resolution measure adopted under the Law of 22 March 2013 is a matter of Cypriot law. The material in the case file does not make it possible to answer that question, which it is not, in any event, for the Court to decide in the context of the present case. It must, however, be noted that neither the wording of Section 26(3) of the Law of 22 March 2013 nor the documents in the case file suggest that it is impossible in practice to bring a claim for compensation for damage unlawfully caused by a resolution measure adopted under that law. Moreover, as the applicants themselves acknowledge, Section 29 of the Law of 22 March 2013 provides that the resolution authority may be held liable in the event of fraud, bad faith or gross negligence.
246    Secondly, the applicants submit that Section 22 of the Law of 22 March 2013, first of all, provides that an assessment must be carried out, for the purposes of implementing resolution measures, by the resolution authority and, then grants the latter a very wide margin of discretion. The applicants point out that, according to Section 22(7) of that law, that assessment cannot be subject to a separate judicial review, but must be considered in conjunction with the decision taken under ‘this section’. According to the applicants, that means that parties who consider that their financial position has deteriorated as a result of a resolution measure must challenge an assessment which is made at the sole discretion of the resolution authority. It would be difficult to understand how that assessment could be effectively challenged unless it itself reveals an underestimation.
247    In that regard, it is sufficient to note that there is nothing in Section 22 of the Law of 22 March 2013 to suggest that such an assessment is likely to be binding on the national court hearing a claim for compensation. It must therefore be held that the applicants have failed to show that that provision would, in practice, make the bringing of such a claim impossible or ineffective.
248    In the third place, it cannot be considered that the harmful measures did not contain any guarantees enabling the applicants to put forward their point of view. In that regard, it should be noted that the applicable procedures must provide the person concerned with an adequate opportunity to put his or her case to the competent authorities. In order to ensure compliance with that requirement, which is an inherent requirement of Article 1 of Protocol No 1 to the ECHR, it is necessary to consider the applicable procedures from a general point of view (see, to that effect, judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraph 368 and the case-law cited, and ECtHR, 20 July 2004, Bäckv. Finland, CE:ECHR:2004:0720JUD003759897, § 56). Thus, that requirement cannot be interpreted as meaning that the person concerned must, in all circumstances, be able to express his or her point of view to the competent authorities prior to the adoption of measures affecting his or her right to property (see, to that effect, ECtHR, 19 September 2006, Maupas and Others v. France, CE:ECHR:2006:0919JUD001384402, §§ 20 and 21). That is particularly the case where, as in the present case, the measures in question do not constitute a penalty and are taken in a context of particular urgency. In that regard, it should be noted that, as the ECB pointed out in its defence, the aim was to prevent an imminent risk of collapse of the banks concerned in order to preserve the stability of the Cypriot financial system and thus to avoid contagion to other Member States of the Euro area. The implementation of a prior consultation procedure, in which the thousands of depositors in the banks concerned could have usefully made their views known to the CBC before the adoption of the harmful decrees, would have inevitably delayed the implementation of measures to prevent such a collapse. The achievement of the objective of preserving the stability of the Cypriot financial system and thus avoiding contagion to other Member States of the euro area would have been exposed to significant risks (see, to that effect and by analogy, ECtHR, 21 July 2016, Mamatas and Others v. Greece, CE:ECHR:2016:0721JUD006306614, § 139).
249    In those circumstances, however, the person concerned must be able to benefit from a judicial procedure affording the requisite procedural guarantees, so as to enable the national courts to rule effectively and fairly on disputes relating to the alleged infringement of property rights. As can be seen from paragraphs 243 and 245 to 247 above, that is the case here.
250    In the fourth place, as the Commission rightly points out, the fact that there were no EU harmonisation measures on a bail-in for banks at the material time does not in any way mean that the Member States were prohibited from adopting bail-in measures. Nor does it follow from that non-existence that the EU institutions were prohibited from lending their support to the implementation of such measures by the Cypriot authorities.
251    Furthermore, it is in vain that the applicants argue, in essence, that in the present case it is necessary to depart from the conclusions reached in the judgments of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others
(C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others
(T‑786/14, not published, EU:T:2018:487), in that the Court of Justice and the General Court failed to examine the argument that the defendants had placed the Republic of Cyprus under extreme pressure in order to force it to adopt the harmful measures. Such alleged extreme pressure is irrelevant to the question whether the first three harmful measures were or were not provided for by law.
252    It follows from the above that the applicants have failed to establish that the first three harmful measures were not provided for by law.
(ii) The requirement that any restriction of the right to property must be proportionate to the objective pursued
253    The applicants claim that the first three harmful measures are not proportionate to the aim pursued, in that an excessive burden was imposed on them. First, they had to pay for errors which were attributable to the Government of the Republic of Cyprus, to the lack of prior intervention by the EU institutions and to the imprudence of the ECB, whose ‘liberal policy’ in relation to ELA contributed substantially to the accumulation of debt by Laïki. Secondly, the defendants failed to take into account alternative measures that were less restrictive of the applicants’ right to property.
254    The Council and the ECB contest the applicants’ arguments.
255    In the first place, it should be noted that, in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 73 to 75), the Court of Justice has already expressly ruled on the proportionality of the first three harmful measures to the aim pursued, concluding that they do not constitute an excessive and intolerable intervention affecting the very substance of the property rights of the depositors in the banks concerned. The applicants failed to explain why that conclusion could not be transposed to the present case. It must therefore be held to apply, mutatis mutandis, to the present complaint.
256    In the second place, and in any event, the arguments relied on by the applicants in support of their complaint concerning the lack of proportionality of the first three harmful measures do not, in the present case, allow a different conclusion to be reached from that reached by the Court of Justice in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 73 to 75).
257    In that regard, it should be noted that a restriction on the right to property must not be excessive. First, the restriction in question must meet the general interest objective pursued and be necessary and proportionate to that end. Secondly, the ‘essential content’, that is to say, the substance, of the right to property must not be affected (see, to that effect, judgments of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraphs 355 and 360; of 13 June 2017, Florescu and Others, C‑258/14, EU:C:2017:448, paragraphs 53 and 54; and of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraph 200).
258    Where, as in the present case, the EU institutions are called upon, in a complex and evolving context, to make decisions of a technical nature and to make complex forecasts and assessments, they must nonetheless enjoy a broad discretion as to the nature and scope of the measures which they support. In such a context, the condition relating to the unlawfulness of the conduct complained of requires proof of a manifest and serious disregard by the institution concerned of the limits on its discretion (see, to that effect, judgment of 10 July 2014, Nikolaou v Court of Auditors, C‑220/13 P, EU:C:2014:2057, paragraph 53 and the case-law cited, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 68).
259    It is in the light of those principles that the applicants’ arguments must be examined. More specifically, the Court will examine, first of all, whether the first three harmful measures contribute to the attainment of the objective pursued (see paragraphs 260 to 266 below), next, whether they are proportionate and necessary to the attainment of that objective (see paragraphs 267 to 291 below) and, finally, whether the disadvantages they cause are not disproportionate to that objective (see paragraphs 292 to 299 below).
–       The suitability of the first three harmful measures to contribute to the achievement of the objective pursued
260    According to the case-law, it is necessary to verify the suitability of the restriction on the right to property under consideration to contribute to the attainment of the objective of general interest pursued (see, to that effect, judgment of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraph 203).
261    In the present case, first, it should be noted that the adoption of the harmful measures responded to a situation in which, if they had not been recapitalised, the banks concerned would have been exposed to a risk of a run as soon as the period of closure of the banks ordered on 18 March 2013 had expired, with the result that they would have been at risk of having to cease their operations and would have been threatened by a disorderly default. As the ECB pointed out in its response to the Court’s measures of organisation of procedure, the effects of such default were likely to be of a systemic nature, threatening the Republic of Cyprus with a sovereign default and risking a rapid spread to other banks, in particular Cypriot banks. The confidence of the depositors of those banks and the solvency of the Republic of Cyprus, guarantor of some of the debts of Laïki, would have been affected and the stability of the entire Cypriot financial system threatened. As noted by the Commission and the ECB, a risk of contagion to other Member States, or even to the entire banking system of the euro area, could not have been excluded.
262    In the light of the material in the file, it cannot be concluded that that analysis of the economic and financial situation of Cyprus and of the European Union at the date of adoption of the harmful measures was vitiated by a manifest error of assessment. In that regard, the vague allegations made by the applicants that, because of the small size of the Cypriot economy, its default had only a limited impact on the euro area are in no way supported. Those allegations ignore the size of the Cypriot financial sector, which was eight times the size of Cypriot GDP at the material time, and the risk of contagion to other Member States.
263    According to paragraph 1.26 of the Memorandum of Understanding of 26 April 2013, the conversion of 37.5% of the BoC’s uninsured deposits was intended to enable the BoC to reach ‘a core tier one ratio of 9% under the adverse scenario of the stress test by the end of the programme’. In accordance with paragraph 1.27 of that memorandum of understanding, additional deposit conversions, such as those referred to in paragraph 34 above, were intended to ensure that that objective could be achieved at the end of the programme. Therefore, in the circumstances described in paragraph 261 above, it was not manifestly unreasonable to consider that those measures were likely to stabilise the financial system, in particular by making it possible, as is still apparent from paragraph 1.26 of the Memorandum of Understanding of 26 April 2013, to ‘restore confidence and normalise funding conditions’.
264    As for the harmful measure whereby the BoC was to take over Laïki’s insured deposits, while its uninsured deposits would be maintained with the former entity, pending its liquidation, it was intended, as is apparent from the CBC’s press release of 26 March 2013, to enable Laïki to be split into a bad bank and a good bank. Therefore, in the circumstances described in paragraph 261 above, it was not manifestly unreasonable to consider that that measure was likely to stabilise the financial system by avoiding the disorderly default of Laïki.
265    Secondly, it is important to stress that the excessive size of the Cypriot financial sector was among the main causes of the banking crisis. As noted in the introduction to a May 2013 IMF report, the significant internal and external imbalances in the Cypriot economy prior to the financial crisis were exacerbated by a disproportionately large and weak financial sector. Highly exposed to Greece, it represented, as already noted (see paragraph 262 above), more than 800% of Cyprus’ GDP.
266    The first three harmful measures include, inter alia, the application of a haircut to the BoC’s uninsured deposits and were thus intended to reduce the size of the Cypriot financial sector. Therefore, in the circumstances described in paragraph 265 above, it was not manifestly unreasonable to consider that that haircut would contribute to ensuring the stability of the euro area banking system.
–       The proportionality and necessity of the first three harmful measures
267    According to the case-law, it must be ascertained whether the restriction on the right to property under consideration exceeds the limits of what is appropriate and necessary for the attainment of the objectives pursued by the legislation in question. In particular, where there is a choice between several appropriate measures, the least restrictive should be adopted (see judgment of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraph 205 and the case-law cited).
268    In the present case, first, the applicants argue, in essence, that alternatives which are less restrictive of their right to property than the first three harmful measures have not been taken into account. According to the applicants, it would have been possible to save the economy of the Republic of Cyprus by imposing on them lesser burdens than those which they have borne. Secondly, the applicants submit that they have been expropriated and have not, as such, obtained compensation which can be regarded as fair within the meaning of Article 17(1) of the Charter. Thirdly, the applicants argue that, on the one hand, the excessive nature of those measures is apparent from the fact that the Republic of Cyprus ultimately used only 70% of the EUR 9 billion of the FAF and, on the other hand, an ulterior motive for the restructuring of the BoC and Laïki was that the Troika considered that the Cypriot banking system was not sufficiently compliant with the rules on combating money laundering.
269    First, as regards the consideration of less restrictive alternatives, it appears from the documents in the file that, as the Council rightly points out, any approach other than the one finally chosen was either not feasible or would not have achieved the desired results. First of all, it should be noted that the Cypriot authorities adopted the harmful measures only after the Cypriot Parliament had rejected a measure which was less restrictive to the applicants’ interests than the first three harmful measures, namely, the creation of a tax on all bank deposits in Cyprus (see paragraph 23 above).
270    Next, according to an IMF report of May 2013, the assumption by the budget of the Republic of Cyprus of the cost of recapitalising the banks concerned would have led to an increase in the Cypriot public debt to an unsustainable level. It follows from paragraph 11 of that report that, in the event of an injection of public capital for the benefit of the banks concerned, that debt would have reached a level of around 150% of Cypriot GDP and would have risked increasing even further. According to the IMF, that would have burdened Cypriot taxpayers, while the size of the banking sector, which was one of the main causes of the crisis (see paragraph 265 above), would have remained excessive and continued to threaten the Republic of Cyprus.
271    Finally, paragraph 11 of the report referred to in paragraph 270 above shows that approaches which did not generate debt, such as direct recapitalisation of the banks concerned by the ESM or their outright sale, were not available. As for an exit from the euro area, that would have only partially remedied Cyprus’ difficulties and would have inflicted considerable losses on both taxpayers and insured depositors.
272    The applicants nevertheless consider, first, that other measures should have been considered and, secondly, that the defendants failed to take account of situations comparable to that of the Republic of Cyprus, namely, that of the four other MSCE which had previously received financial assistance, that is to say, Ireland, the Hellenic Republic, the Kingdom of Spain and the Portuguese Republic.
273    First, as regards the existence of less restrictive alternative measures, the applicants allege that it would have been perfectly feasible, even within the time limits within which the rescue measures had to be agreed, to provide for an alternative system of haircuts which would have taken account of the size of the deposits made in the banks concerned. According to the applicants, it would, in particular, have been possible to provide either for a haircut calculated as a percentage of the amount of a deposit in excess of EUR 100 000 or for a progressive system whereby the percentage of the haircut would increase above certain thresholds.
274    However, it must be noted that the applicants do not provide the slightest concrete evidence in support of their allegations, which are not, moreover, quantified in any way. At no point do the applicants specify what percentage or above what threshold the haircut would apply, nor do they establish that the approach which they advocate would have enabled the BoC to achieve the core tier one ratio provided for in paragraph 1.26 of the Memorandum of Understanding of 26 April 2013.
275    It is, however, possible to deduce from the applicants’ claims that that approach would have made it possible to allocate to the recapitalisation of the BoC only capital lower than that released by the first three harmful measures. In view of the imperative of protecting insured deposits, the haircut envisaged by the applicants could, like the first three harmful measures, have been applied only to deposits in excess of EUR 100 000. But, unlike those measures, that haircut would have applied only to a percentage of the deposits in question.
276    Either that percentage was insufficiently high to enable the BoC to achieve the level of equity referred to in paragraphs 1.26 and 1.27 of the Memorandum of Understanding of 26 April 2013, in which case the approach advocated by the applicants would not have achieved the aim pursued, or that percentage was sufficiently high to do so, in which case the applicants would have suffered losses which it has not been established would have been substantially lower than those which they suffered as a result of the first three harmful measures. That would have been the case even if the haircut actually applied had been higher than was strictly necessary for the BoC to achieve a level of equity higher than that referred to in paragraphs 1.26 and 1.27 of the Memorandum of Understanding of 26 April 2013. According to paragraph 1.27 of that memorandum, which incorporates the substance of paragraph 6(5) of Decree No 103, if the BoC were to be overcapitalised in relation to the objective of a core tier one capital target of 9% under stress, a share buy-back would be carried out in order to reimburse the uninsured deposit holders by the amount corresponding to the overcapitalisation.
277    In any event, it is important to take account of the need for the Cypriot authorities to act quickly when adopting the harmful measures. Far from constituting, as the applicants essentially suggest, an indication of disregard for their right to sound administration, the speed with which the harmful measures were adopted bears witness to the urgency of the situation in which the Republic of Cyprus found itself at the material time. As indicated in paragraph 248 above, the aim was to prevent an imminent risk of collapse of the banks concerned in order to preserve the stability of the Cypriot financial system and thus to avoid contagion to other Member States of the euro area. Designing a differentiated haircut system such as that advocated by the applicants in such a context would have required the Cypriot authorities to undertake a particularly delicate and uncertain process to ensure that the percentages and thresholds chosen would allow the BoC to achieve the core tier one capital target referred to in paragraphs 1.26 and 1.27 of the Memorandum of Understanding of 26 April 2013, thereby exposing the recapitalisation of the BoC to significant risks (see, to that effect and by analogy, ECtHR, 21 July 2016, Mamatas and Others v. Greece, CE:ECHR:2016:0721JUD006306614, § 139).
278    As regards the argument, raised in the context of the measures of organisation of procedure, that urgency could not have justified the adoption of the harmful measures, the applicants do not provide any evidence to support the fact that, despite that urgency, the defendants could have provided temporary assistance to the banks concerned by giving them the opportunity to recapitalise themselves on terms which were less onerous for depositors.
279    Secondly, with regard to the existence of comparable situations, it should be noted that the measures to which the granting of financial assistance by the ESM (or by other international organisations, Union bodies and institutions or States) may be subject to in order to resolve the financial difficulties encountered by a State facing the need to recapitalise its banking system may vary fundamentally from one case to another depending on the experience gained and a set of specific circumstances. Those may include in particular, the economic situation of the beneficiary State, the size of the aid in relation to its economy as a whole, the prospects for the return of the banks concerned to economic viability and the reasons that led to the difficulties encountered by them, including, where appropriate, the excessive size of the banking sector of the beneficiary State in relation to its national economy, the evolution of the international economic situation or a high probability of future interventions by the ESM (or other international organisations, Union bodies and institutions or States) in support of other States in difficulty which may require a preventive limitation of the amounts devoted to each intervention.
280    In the present case, the applicants merely compare the size (absolute and relative) of the financial assistance received by the Republic of Cyprus, on the one hand, and Ireland, the Hellenic Republic, the Kingdom of Spain and the Portuguese Republic, on the other hand. Thus, the applicants do not demonstrate or even allege that the respective financial sectors of the other MSCE which received financial assistance, including that of the Hellenic Republic, were, like that of the Republic of Cyprus (see paragraph 265 above), characterised by excessive size in relation to the size of the respective national economies of those MSCE. On the contrary, it is apparent from the documents in the file that the respective financial sectors of those Member States were less imbalanced than that of the Republic of Cyprus. For example, a press article dated 20 March 2013 quoted a member of the ECB’s Executive Board as saying that the Cypriot banking sector presented ‘unique circumstances’, since no other country in Europe had such a grossly unbalanced banking sector.
281    Nor have the applicants shown that the experience acquired and differences relating to the economic situation of the MSCE concerned or to the prospects of a return to viability of the banks concerned, the evolution of the international economic situation or a high probability of future interventions by the ESM in support of other States in difficulty, which may require a preventive limitation of the amounts allocated to each intervention, could not justify a difference in treatment between the Republic of Cyprus, on the one hand, and Ireland, the Hellenic Republic, the Kingdom of Spain and the Portuguese Republic, on the other hand.
282    Secondly, as regards the award of fair compensation to the applicants, and assuming that the first three harmful measures can be regarded as involving an deprivation of the applicants’ right to property, it should be recalled that, without the payment of a sum reasonably commensurate with the value of the property in question, a deprivation of property would ordinarily constitute an excessive interference with the right to property (see, to that effect, ECtHR, 21 February 1986, James and Others v. United Kingdom, CE:ECHR:1986:0221JUD000879379, § 54). In the case of a security, the amount of compensation due is assessed by reference to the true market value of that security at the time of the adoption of the disputed regulation, and not by reference to its nominal value or the amount which its holder expected to receive at the time of its acquisition (see, to that effect, ECtHR, 21 July 2016, Mamatas and Others v. Greece, CE:ECHR:2016:0721JUD006306614, § 112). In the present case, it is not for the Court to estimate in the abstract the amount of hypothetical compensation which the applicants should have received in the circumstances of the case. It should, however, be noted that, if they were not recapitalised, the banks concerned risked having to cease their operations and would have been threatened with disorderly default (see paragraph 261 above). The applicants have failed to establish that, in those circumstances, the true market value of their assets was such as to warrant compensation.
283    Secondly, and in any event, it should be noted that, as is apparent from paragraphs 243, 245 and 247 above, Section 26 of the Law of 22 March 2013 provides that any party who considers that his or her right to property has been unduly infringed by resolution measures retains the right to bring an action before the competent national court to claim compensation. It must therefore be concluded that the applicants have not established that they have been unlawfully deprived of fair compensation.
284    Thirdly, as regards, first of all, the amount of the FAF actually used by the Republic of Cyprus, it should be noted that the Eurogroup statement of 7 March 2016, which the applicants rely on, states that it ‘welcomes the fact that economic activity has continued on a positive trend and that the [Cypriot] banking system continued to recover; the commitment of the Cypriot authorities and population to the [macroeconomic adjustment] programmes was also key to a fiscal performance that exceeded expectations’.
285    It follows that the fact that the Republic of Cyprus used only 70% of the amount allocated to the FAF, as set out in the IMF report of June 2017 produced by the applicants, can be explained, as the ECB argues, by the occurrence of more favourable circumstances than those initially envisaged at the time when the total amount of this assistance was defined by complex technical forecasts made in a complex and changing context, allowing for an unexpected fiscal performance. The applicants do not allege that those forecasts were vitiated by a manifest error.
286    Furthermore, the sums paid under the FAF could not, in any event, be used for the recapitalisation of the banks concerned, as the applicants themselves point out, so that the size of the sums actually received by the Cypriot authorities in that connection could not have had any impact on the conditions for the restructuring and resolution of the banks laid down by the harmful measures, which, moreover, were determined prior to the payment of the various instalments of the financial assistance.
287    Consequently, the fact that the Republic of Cyprus has used only 70% of the EUR 9 billion of the FAF does not manifestly demonstrate the disproportionate nature of the harmful measures.
288    Next, the allegation that one of the reasons for the harmful measures was that the Cypriot banking system was, in the eyes of the ‘Troika’ (the Commission, the ECB and the IMF), not sufficiently compliant with the anti-money laundering rules is not supported in any way. The only document produced by the applicants in that context consists of a press release of the CBC of 23 May 2013 which comments on the results of an audit of anti-money laundering measures in Cyprus without making any reference to the harmful measures, their reasons or the circumstances in which they were taken. That allegation is therefore manifestly unfounded.
289    Furthermore, the applicants submit, in essence, that in the present case it is necessary to depart from the conclusions reached in the judgments of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others
(T‑786/14, not published, EU:T:2018:487), because neither the Court of Justice nor the General Court in those judgments sufficiently explained how the bail-in of Laïki and the BoC was the least restrictive of the possible appropriate measures, or how the interests of the applicants had been taken into account.
290    In that regard, it should be noted that that argument consists either of a reiteration of the objections corresponding, in essence, to those examined and rejected in paragraphs 300 to 315 of the judgment of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and in paragraphs 299 to 314 of the judgment of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), or of allegations which are in no way substantiated.
291    It cannot therefore be considered that the first three harmful measures exceed the limits of what is appropriate and necessary to achieve the objectives pursued.
–       The disadvantages caused by the first three harmful measures
292    According to the case-law, it must be ascertained whether the disadvantages caused by the restriction on the right to property under consideration are not disproportionate to the objectives pursued (see, to that effect, judgment of 27 February 2014, Ezz and Others v Council, T‑256/11, EU:T:2014:93, paragraphs 205 and 209).
293    In that regard, first, it should be noted that the establishment of deposits with a bank is not free of risk. At the material time, Article 7(1a) of Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes (OJ 1994 L 135, p. 5), as amended by Directive 2005/1/EC of the European Parliament and of the Council of 9 March 2005 amending Council Directives 73/239/EEC, 85/611/EEC, 91/675/EEC, 92/49/EEC and 93/6/EEC and Directives 98/78/EC, 2000/12/EC, 2001/34/EC, 2002/83/EC and 2002/87/EC in order to establish a new organisational structure for financial services committees (OJ 2005 L 79, p. 9), and by Directive 2009/14/EC of the European Parliament and of the Council of 11 March 2009 (OJ 2009 L 68, p. 3), obliged the Member States to ensure that the coverage for the aggregate deposits of each depositor be set at EUR 100 000 in the event of deposits being unavailable. In those circumstances, depositors must have been aware of the risk of losing all or part of the amounts above EUR 100 000 that they had deposited in the banks concerned in the event of deposits becoming unavailable.
294    Secondly, it should be noted that Section 3(2)(a) and (b) of the Law of 22 March 2013 provides that the shareholders of an institution subject to a resolution procedure are the first to bear any losses resulting from the implementation of resolution measures, whereas the creditors of such an institution bear such losses only after the shareholders. It follows that it is only after the shareholders of the banks concerned that their depositors had to bear the losses resulting from the implementation of the harmful measures.
295    Thirdly, it should be noted that the Law of 22 March 2013 guarantees the depositors in the banks concerned a level of protection at least equal to that which they would have enjoyed in the event of their liquidation. It follows from Section 3(2)(d) of that law that the measures adopted on the basis of that law may not place the creditors of the institutions concerned in a less favourable financial situation than that in which they would have found themselves in the event of their liquidation. Section 12(14) of that law specifies that, in the event of a restructuring, pursuant to Section 12(1) of that law, of the debts and obligations of an institution subject to a resolution procedure, the parties affected are to receive, in payment of their claims, at least the amount which they would have received, under Cypriot law, in the event of the liquidation of those banks (see paragraph 25 above).
296    In the present case, it is common ground between the parties that, in the absence of public intervention, the banks concerned would probably have had to be wound up. In those circumstances, Section 3(2)(d) and Section 12(14) of the Law of 22 March 2013 therefore ensured that the affected parties were not, as a result of the application of the first set of harmful measures, in a more unfavourable position than they would have been had the Cypriot authorities not intervened (see, to that effect and by analogy, Opinion of Advocate General Wahl in Kotnik and Others, C‑526/14, EU:C:2016:102, point 90).
297    Fourthly, it should be noted that, in accordance with paragraph 1.27 of the Memorandum of Understanding of 26 April 2013, paragraph 6(5) of Decree No 103 provides that if the contributions of uninsured depositors in the BoC exceed what is necessary for the purpose of restoring its capital, the resolution authority is to determine the amount corresponding to the overcapitalisation and treat it as if the conversion had never taken place.
298    It must therefore be concluded that, having regard also to the importance of the objectives pursued (see paragraphs 220 and 221 above), the disadvantages resulting from the application to the applicants of the first three harmful measures are not manifestly disproportionate.
299    In the light of the foregoing, it must be concluded that the first three harmful measures cannot be regarded as a disproportionate and intolerable interference with the very substance of the applicants’ right to property. It cannot therefore be considered that the Commission and the ECB, by supporting the first three harmful measures, have contributed to an infringement of the applicants’ right to property.
300    It must then be examined whether, by supporting the sale of the Greek branches, the Commission and the ECB contributed to an infringement of the applicants’ right to property.
(b)    The sale of the Greek branches
301    The applicants argue that the sale of the Greek branches cannot be considered objectively justified, nor can it be considered to be provided for by law or to comply with the principle of proportionality.
302    Even assuming that the sale of the Greek branches could have had an impact on the existence or extent of the damage claimed, allegedly originating in the conversion of deposits made in the Cypriot branches of the banks concerned, it must be found that that sale referred to in paragraph 1.24 of the Memorandum of Understanding of 26 April 2013 and provided for in Decrees No 96 and No 97 was, like the harmful measures previously examined, justified by the public interest objective of ensuring the stability of the Cypriot financial system and of the euro area as a whole, in accordance with the case-law cited in paragraph 221 above.
303    It is clear from the documents in the file that the purpose of that sale was, in view of the mutual exposure of Greece and Cyprus, to prevent a general destabilisation of the financial systems of those two Member States.
304    In that regard, first, it follows from recital 302 of Commission Decision (EU) 2015/455 of 23 July 2014 on State aid SA.34826 (2012/C) and SA.36005 (2013/NN) implemented by Greece for Piraeus Bank Group relating to the recapitalisation and restructuring of Piraeus Bank SA (OJ 2015 L 80, p. 49) that the purpose of the sale of the Greek activities of three Cypriot banks and, in particular, of the Greek branches of the banks concerned was to safeguard the stability of the Greek banking system and to ensure that the Cypriot banks could sell businesses before those businesses were in danger of losing value.
305    Admittedly, the reasons why the Commission considered that the sale of those branches was necessary to ensure the stability of the Greek banking system are not clear from Decision 2015/455. However, as the applicants essentially agreed in their reply to the Court’s measures of organisation of procedure, those reasons are set out in an internal ECB report of 27 January 2013 produced at the reply stage.
306    It should be noted that, contrary to what the ECB and the Commission maintain, the production of the ECB’s internal report of 27 January 2013 cannot be regarded as inadmissible under Article 85(1) of the Rules of Procedure since it was produced, at the reply stage, in order to contest statements in the Commission’s defence relating to the conditions of sale of the Greek branches of the banks concerned (see, to that effect, judgment of 13 December 2018, Post Bank Iran v Council, T‑559/15, EU:T:2018:948, paragraph 75 and the case-law cited).
307    It follows, in essence, from the ECB’s internal report of 27 January 2013 that the objective of a possible sale of the Greek branches was to avoid any contagion effect from the Cypriot banking system to the Greek financial system and thus to maintain the stability of the latter. The aim was to prevent a widespread withdrawal in Greece in the event of either the default of Laïki or the haircut of deposits made in the BoC. As the ECB stated in its response to the Court’s measures of organisation of procedure, there was a risk that, in view of the general situation in the Republic of Cyprus and the fact that their deposits were subject to the Cypriot deposit-guarantee scheme (see paragraph 440 below), the holders of deposits with Greek branches might withdraw their deposits.
308    The viability of the Greek branches, and indeed the viability of the banks concerned to which they belonged, would have been negatively affected, while the value of their assets would have declined as a result. Such developments would have risked jeopardising the renewed public confidence in the Greek banking sector, whose deposits were beginning to increase again after two years of sharp decline. There was a high risk that a run on the banks would ensue in Greece, which in turn could have aggravated the low funding capacity of Greek banks and would have required an increase in the ELA granted to them to a level potentially exceeding the actual capacity of Eurosystem central banks.
309    Secondly, it is apparent from the replies of the applicants, the Commission and the ECB to the Court’s measures of organisation of procedure that the sale of the Greek branches was also intended to protect the Cypriot banking system from a contagion effect resulting, inter alia, from a possible deterioration of the economic situation in Greece. As stated in a Commission report of May 2013, to which the Commission refers in its reply to the Court’s measures of organisation of procedure, the Cypriot banking system and, in particular, Laïki were particularly exposed to the difficulties of the Greek economy.
310    In the light of the foregoing, it is necessary to consider, first, whether the sale of the Greek branches was provided for by law and, secondly, whether, in the light of the objective of general interest referred to in paragraphs 302 and 303 above, it constitutes a disproportionate and intolerable intervention which would undermine the very substance of the applicants’ right to property.
311    In that regard, first, it should be noted that, for reasons similar to those set out in paragraphs 238 to 250 above, the sale of the Greek branches was provided for by law.
312    Secondly, as regards the proportionality of the sale of the Greek branches, first, it must be considered that it was appropriate to achieve the objective pursued by reducing the mutual exposure of the Greek and Cypriot banking systems.
313    Next, it is not apparent from the documents in the file that the objectives pursued could have been achieved by means of less restrictive measures than the sale of the Greek branches. As part of their complaint alleging breach of the principle of non-discrimination, the applicants admittedly submit that ‘distributing the cost of the bail-in among the Cypriot taxpayers’ would have made it possible to achieve those objectives.
314    However, it should be noted that, as the applicants confirmed, in essence, in their response to the measures of organisation of procedure, such a measure would have been tantamount to the Republic of Cyprus simply assuming the cost of recapitalisation and restructuring of the banks concerned. First, such an approach would not have been feasible. As the Commission rightly pointed out in its response to the Court’s measures of organisation of procedure, the Republic of Cyprus did not have the necessary funds for that purpose at the time of the events. It was also deprived of access to international capital markets. In those circumstances, it is, as the applicants agree in their reply to the Court’s measures of organisation of procedure, difficult to see how the Republic of Cyprus could have recapitalised the banks concerned without external financial assistance.
315    It should be noted that the amount of the FAF, limited to EUR 10 billion, was calculated on the basis of the financial needs of the Republic of Cyprus in the absence of any public capital injection in favour of the banks. Since, according to a March 2013 report by Pacific Investment Management Company (PIMCO) (‘the PIMCO report’), the recapitalisation of the banks concerned would, at the end of 2012, have required a total amount of almost EUR 7.8 billion, the solution advocated by the applicants would have necessitated either an increase in the amount of the FAF or the use of a substantial part of the amount of the FAF for the purpose of recapitalising the banks concerned.
316    The first of those two options would have presented two major difficulties, which the applicants do not explain at any point how the Republic of Cyprus could have overcome. First, the ESM was under no obligation to grant the Republic of Cyprus an FAF in excess of EUR 10 billion. On the contrary, the ESM could legitimately consider that the size of that envelope should be limited, in particular to safeguard its ability to make future interventions. Secondly, an increase in the size of the FAF for the purpose of recapitalising the banks concerned would have contributed to increasing the Cypriot public debt to an unsustainable level (see paragraph 270 above).
317    The second of those two options would not, on the basis of the documents in the file, have been more viable. First, devoting a substantial part of the EUR 10 billion of the FAF to the recapitalisation of the banks concerned would have been incompatible with the conditions for the granting of the FAF, which provided that it would not be used for that purpose. Secondly, irrespective of those conditions, it should be noted that such an approach would necessarily have required a significant reallocation of the amounts granted to the Republic of Cyprus under the FAF. Therefore, all or part of the EUR 7.8 billion which would then have been used for the recapitalisation of the banks concerned could no longer have been used for the budgetary needs of the Republic of Cyprus, for the repurchase by the Republic of Cyprus of debt instruments or for the recapitalisation of Cypriot banks other than the banks concerned. As stated by the ECB and the Commission in response to the Court’s measures of organisation of procedure, without financial assistance, the Republic of Cyprus would probably have been unable to meet its financial obligations, thereby jeopardising its solvency. In view of the resulting risks to the financial stability of the euro area as a whole, it would then have become likely that the FAF would not achieve the objective of general interest pursued.
318    Moreover, unlike the sale of the Greek branches, the mere assumption by the budget of the Republic of Cyprus of the costs of recapitalisation and restructuring of the banks concerned would not have been capable of reducing the mutual exposure of the Hellenic Republic and the Republic of Cyprus. Such a measure would have left the links between the banks concerned and the Greek banking system intact.
319    Finally, as regards the disadvantages generated by the sale of the Greek branches, it is true that recital 294 of Decision 2015/455 shows that Piraeus Bank had acquired the loan portfolios of the Greek activities of three Cypriot banks, including the banks concerned, at a price below their nominal value. It also appears from that recital that the sale price of those branches had been reduced to take into account the future losses estimated by PIMCO in the context of a stress test. According to the ECB’s reply to the Court’s measures of organisation of procedure, the purpose of that test was to determine the capital requirements of the participating banks and was part of an audit of the Cypriot banking system which PIMCO had been commissioned to carry out by the CBC and which it conducted under the guidance of a committee composed of representatives of the CBC, the Commission, the ECB, the ESM, the European Banking Authority and the IMF as an observer. The result of that test was that the risk that loan losses would be higher than those already anticipated through the lower sales price was limited.
320    The Commission also stated, in recital 298 of Decision 2015/455, that the consideration finally paid by Piraeus Bank to acquire the Greek operations of the three Cypriot banks concerned, including the Greek branches, was much lower than the book value of the acquired portfolio, and even lower than the value of the loans after it was adjusted downward for anticipated future loan losses under the stress test. The Commission concluded that the acquisition price could be considered negative, which is confirmed by the fact that Piraeus Bank had booked significant negative goodwill after the acquisition and had seen its capital increase.
321    It cannot therefore be ruled out that the banks concerned suffered a significant loss of assets as a result of the sale of the Greek branches. As stated in recital 74 of Decision 2015/455:
‘The assets transferred to [Piraeus Bank] amounted to approximately EUR 18.9 billion and the liabilities amounted to approximately EUR 15 billion. However, the parties to the transaction agreed to take into account the amount of losses that was forecast in the PIMCO report for the banks in Cyprus, under an adverse scenario. According to the PIMCO report, the value of the assets that would be transferred to [Piraeus Bank] amounted to approximately EUR 16.5 billion. The liabilities transferred amounted to approximately EUR 14.5 billion.’
322    However, it is clear from recitals 75 and 303 of Decision 2015/455 that the sale took place in an open, transparent and non-discriminatory procedure, in which three bidders submitted offers, of which only Piraeus Bank’s offer proved to be valid.
323    The applicants do not put forward any argument to show that that sale procedure was flawed. They merely state that the price of the Greek branches was calculated on the basis of the valuation carried out by PIMCO in the context of its report, the role of which was essentially to magnify the capital requirements of the banks concerned, without the participation of their management or shareholders and depositors, despite the disagreement of their respective boards of directors, in complete opacity and in breach of international financial reporting standards (IFRS).
324    In that regard, first, it must be observed that the applicants’ reasoning is based on the premiss that the sale price of the Greek branches was ‘calculated’. That premiss is incorrect, since the price was the result of the best offer made in an open tender procedure (see paragraph 322 above).
325    Secondly, even assuming that the outcome of the PIMCO report, the purpose of which was not specifically to value the Greek branches for sale, but to assess, more generally, the value of the Cypriot banks under a baseline and an adverse scenario, was flawed, or based on biased assumptions, as the applicants contend by relying on an excerpt from a book published in 2016 entitled ‘The Cyprus Bail-in: Policy Lessons from the Cyprus Economic Crisis’, the sale of those branches is not, in itself, flawed. There is no evidence that the tenderers participating in the sale of the Greek branches were prohibited from offering a price different from the one resulting from the PIMCO report.
326    Thirdly, the applicants rely, in the context of their response to the Court’s measures of organisation of procedure, on an announcement by the CBC of 7 June 2013, from which it appears that the price and conditions of sale of the Greek branches were determined ‘at a political level’ by the Hellenic Republic and the Republic of Cyprus at two meetings of the Eurogroup in March 2013.
327    The conclusions which the applicants draw from the CBC’s announcement of 7 June 2013 cannot, however, be accepted. Without needing to rule on the evidential value of the announcement in question, it is sufficient to note that there is nothing in the file to indicate that the price and conditions on which the Greek and Cypriot authorities agreed ‘at a political level’ were binding on the tenderers who participated in the procedure for the sale of the Greek branches.
328    The applicants also rely, in the reply, on a press article of 19 February 2015 entitled ‘Unter Wert’ (Below value).
329    It should be noted that, contrary to what the ECB and the Commission maintain, the production of the press article of 19 February 2015 cannot be regarded as inadmissible under Article 85(1) of the Rules of Procedure since it was produced, at the stage of the reply, in order to contest statements in the Commission’s defence relating to the conditions of sale of the Greek branches of the banks concerned (see, to that effect, judgment of 13 December 2018, Post Bank Iran v Council, T‑559/15, EU:T:2018:948, paragraph 75 and the case-law cited).
330    The press article of 19 February 2015 does not, however, support the applicants’ claim. Contrary to their allegations, the article does not show that the ECB ‘conceived and articulated’ the sale of the Greek branches, still less that it determined the price. It is true that the article states that ‘the ECB and the European Commission devised an ambitious plan’, according to which the Cypriot banks would be forced to sell ‘their branches in Greece in order to guard the Greeks from the Cypriot shock’. In doing so, however, the article relies on the ECB’s internal report of 27 January 2013 referred to in paragraph 305 above, which examines different scenarios for the separation of the Greek branches and the banks concerned in view of the risk of contagion to the Greek financial system. As the ECB correctly points out, the fact that its services discussed such scenarios in an internal document does not mean that it ‘conceived and articulated’ the sale of Greek branches or that it played a role in determining the sale price. On the contrary, as can be seen from paragraphs 322 to 327 above, that price was the result of an open, transparent and non-discriminatory procedure.
331    Consequently, also in view of the importance of the objectives pursued, the disadvantages generated by the sale of the Greek branches cannot be considered to be disproportionate.
332    The applicants therefore failed to establish that the sale of the Greek branches, provided for in Decrees No 96 and No 97 and referred to in paragraph 1.24 of the Memorandum of Understanding of 26 April 2013, constituted a disproportionate and intolerable interference with the very substance of their right to property.
333    In the light of the foregoing, the sale of the Greek branches cannot be regarded as vitiated by an infringement of the right to property. It follows that the Commission and the ECB did not, by supporting the sale of the Greek branches, contribute to an infringement of the applicants’ right to property.
(c)    The alleged infringement of Article 14.4 of the ECB Statute, the right to sound administration and the requirements of consistency and fairness
334    In order to demonstrate the existence of an infringement of their right to property, the applicants allege a breach of Article 14.4 of the ECB Statute, of the requirements of fairness and consistency and of the principle of sound administration, which are inherent in the principle of proportionality, which is itself one of the conditions that must be met by any restriction on the right to property. In support of that view, the applicants put forward, in essence, three sets of arguments.
335    In the first place, as regards the applicants’ argument that the Eurogroup infringed the principle of sound administration by deciding on harmful measures in breach of ‘fundamental principles of democracy’, it is sufficient to point out that the Court does not have jurisdiction to rule on that matter, since the Eurogroup does not constitute an entity established by the Treaties whose acts or conduct could be the subject of an action for non-contractual liability on the part of the European Union under the second paragraph of Article 340 TFEU (see paragraph 95 above).
336    In the second place, the applicants submit that the ECB failed to observe the requirements of fairness and consistency in that it decided to support the bail-in of the banks concerned, even though, in a letter of 11 February 2013 addressed to the respective executive directors of those banks, the Director of the Office of the Governor of the CBC assured them, on behalf of the Eurosystem, that their depositors’ rights would not be restricted.
337    The defendants have not taken a position on that argument.
338    In that regard, without prejudice to the question whether the alleged lack of fairness and consistency is of any relevance for the purposes of assessing whether there has been a breach of the applicants’ right to property, it is sufficient to note that that argument merges with one of those relied on by the applicants in support of their claim that there has been a breach of the principle of the protection of legitimate expectations, with which it will therefore be examined (see paragraphs 381 to 399 below).
339    In the third place, the applicants criticise the ECB’s conduct in relation to ELA. According to the applicants, that conduct is unfair, inconsistent and in breach of Article 14.4 of the ECB Statute and the principle of sound administration, which the ECB disputes.
340    In support of their argument, the applicants submit, first, that the legal framework governing the ECB’s intervention in the field of ELA infringes the principle of sound administration and the requirement of consistency, which are an integral part of the principle of proportionality, and infringes the requirement that any restriction on the right to property must be provided for by law. In that regard, the applicants point out that ELA is subject to the condition that the beneficiary be solvent. According to the applicants, the concept of solvency for the purposes of ELA is not legally defined. The ECB is therefore not obliged to determine whether the potential beneficiary fulfils a strict solvency requirement laid down by law, but may, on the contrary, consider a bank to be solvent and therefore continue to authorise ELA on the basis of the prospect of financial assistance.
341    At the same time, the ECB could, by virtue of its membership of the Eurogroup and as it did in the present case, have a decisive influence on the decision to grant aid and the conditions attached to it. It would also participate, by virtue of its membership of the Troika, in the monitoring of the Republic of Cyprus’ compliance with conditionality. That would create a clear ‘moral hazard’, as the ECB could freely agree to ELA in the belief that it could demand repayment as a condition of any financial assistance.
342    Secondly, the applicants submit that the ECB was inconsistent and unfair in not objecting to the grant of ELA to the banks concerned until 21 March 2013, while stating that it was reserved for solvent banks. According to the applicants, the ECB had already become aware of Laïki’s insolvency at a date prior to 21 March 2013. In support of their argument, the applicants rely, on the one hand, on the PIMCO report, from which it transpires that the banks concerned were ‘economically insolvent’ and, on the other hand, on a press article dated 17 October 2014 and referred to in paragraph 115 above, from which it transpires, inter alia, that the Governor of the Bundesbank (Central Bank, Germany) had already referred to the insolvency of Laïki at a meeting of the Governing Council in December 2012.
343    Thirdly, the applicants complain, in essence, of the inconsistent, disproportionate and unfair nature of the ECB’s conduct, in that the latter, in a first step, between October 2011 and March 2013, displayed a liberal attitude by hastily granting Laïki virtually unlimited access to ELA, only, in a second step, to suddenly terminate ELA on 21 March 2013.
344    Fourthly, the applicants add, at the reply stage, that they are not in a position to challenge the analysis which led the Governing Council of the ECB to adopt its decision of 21 March 2013. According to the applicants, that decision lacks any statement of reasons and may not be the result of a genuine analysis.
345    Fifthly, the applicants submit that the ECB’s conduct in relation to ELA constitutes a clear and serious breach of the ECB’s discretionary powers under Article 14.4 of its Statute.
346    The defendants contest the applicants’ arguments.
347    In that regard, it should be recalled that it is in the application of the harmful measures that the economic loss which the applicants claim to have suffered is likely to have had its immediate origin (see paragraph 65 above). As is apparent from paragraphs 100 to 122 above, the ECB did not require the adoption of the harmful measures either by its press release of 21 March 2013, or by the decision referred to therein, or by prior decisions to ‘continue the granting of ELA’. In those circumstances, it cannot be considered that any illegalities in those acts are capable of establishing a lack of proportionality of the harmful measures or their failure to comply with the requirement that any restriction on the right to property must be provided for by law. That conclusion is particularly relevant to the applicants’ arguments concerning the alleged inadequacy of the legal framework for ELA (see paragraphs 340 and 341 above). Since that legal framework is not the one in which the harmful measures were adopted (see, in that regard, paragraphs 238 to 250 and 311 above), its alleged inadequacy can in no way indicate that those measures were not adopted under conditions laid down by law.
348    In any event, the applicants’ arguments do not show that the ECB’s conduct in relation to ELA is vitiated by illegality.
349    First, the applicants’ criticisms alleging a lack of precision in the concept of solvency cannot succeed. The fact that the ECB, in exercising its powers under Article 14.4 of the ECB Statute and its wide margin of discretion, may have to interpret or apply a financial concept in the context of a complex economic assessment cannot, as such, constitute an illegality.
350    The applicants’ arguments, according to which the multiplicity of functions exercised by the ECB is contrary to the principle of proportionality due to a lack of consistency or an infringement of the principle of sound administration, can also not be accepted. In that regard, it is worth noting the scope of the consistency requirement in the context of the assessment of the necessity and proportionality of a measure. According to the case-law, a measure is suitable for ensuring the attainment of the aim pursued only if it genuinely responds to the concern to attain that aim in a coherent and systematic manner (judgment of 12 January 2010, Petersen, C‑341/08, EU:C:2010:4, paragraph 53). The applicants do not explain in any way how the alleged multiplicity of functions exercised by the ECB and the ‘moral hazard’ which would result from it are liable to impede the coherent and systematic achievement of the aim of ensuring the stability of the financial system of the euro area which the harmful measures pursue. Nor do they establish how that circumstance is such as to prejudice their right to sound administration.
351    Furthermore, it should be noted that the documents in the file do not support the applicants’ argument concerning the multiplicity of the ECB’s functions.
352    As regards the ECB’s participation in the activities of the Eurogroup, the applicants merely submit that the ECB had, in the present case, ‘defining influence in the determination of the terms of the [Eurogroup] Agreement of 25 March [2013]’, without providing the slightest evidence capable of substantiating that allegation, so that their argument is in any event manifestly unfounded.
353    As regards the ECB’s membership of the Troika, it is sufficient to note that the monitoring of compliance with conditionality presupposes that it has been determined in advance. Contrary to what the applicants essentially maintain, the ECB cannot therefore derive from the supervisory role conferred on it by Article 13(7) of the ESM Treaty the power to demand repayment as a condition of any financial assistance.
354    Secondly, it cannot be considered that the ECB behaved inconsistently, arbitrarily or unfairly by not objecting to ELA until 21 March 2013, although it had allegedly already become aware of Laïki’s insolvency at an earlier date.
355    In that regard, it should be noted that, pursuant to Article 14.4 of the ECB Statute, the role of the Governing Council of the ECB in the present case was limited to checking whether ELA interfered with the objectives and tasks of the ESCB. In particular, in order to ensure compliance with the prohibition on monetary financing laid down in Article 123 TFEU and Article 21.1 of the ECB Statute, it was for the Governing Council to verify that ELA was not granted to an insolvent bank (see paragraph 108 above). As noted in paragraph 109 above, at the time of the events, the ECB had no competence for the prudential supervision of EU credit institutions, which was the exclusive responsibility of national prudential supervisory authorities. In those circumstances, the ECB was dependent on the information provided to it by those authorities on the solvency of the banks benefiting from ELA. According to the ECB’s written submissions, which the applicants have not contested in that regard, the CBC provided the ECB’s Governing Council with its assessment from September 2011 that the banks concerned remained solvent. As the financial soundness of those banks gradually deteriorated, as the ECB again argues without being contradicted by the applicants, the CBC’s assessment of Laïki’s solvency was increasingly based on the prospect of the imminent provision of financial assistance to the Republic of Cyprus. When that prospect receded due to the rejection by the Cypriot Parliament on 19 March 2013 of the creation of a tax on all bank deposits, the Governing Council of the ECB objected to the continuation of the existing level of ELA to the banks concerned. As stated in the comments of the President of the ECB at the press conference of 4 April 2013, the Governing Council considered, at the time of taking the decision of 21 March 2013, that ‘in the absence of a programme, these banks would not have been solvent and viable’ and that at ‘that moment in time, there was no programme in place’.
356    The mere fact that a private company such as PIMCO or a member of the ECB’s Governing Council had previously expressed an opinion differing from that of the CBC as to the solvency of Laïki cannot suffice to establish that that council should already have departed from that opinion – and thus have objected to the maintenance of the existing level of ELA at an earlier date. Furthermore, even if, as the applicants claim in the context of the measures of organisation of procedure, the ECB is subject to a duty of care when verifying that ELA is not granted to an insolvent bank, the applicants do not establish that that duty was breached in the present case. They merely submit that the ECB is dependent on the information provided by the national central banks and that the decision of 21 March 2013 corresponds to an abrupt change in that institution’s position. In view of the factors set out in paragraph 355 above, that argument, which is not otherwise supported, is manifestly unfounded.
357    Thirdly, it cannot be considered either that the ECB behaved inconsistently, disproportionately and unfairly in opposing on 21 March 2013 the maintenance of the existing level of ELA, even though it had authorised ELA since October 2011. Far from being a sudden reversal without justification, the decision of the Governing Council of the ECB of 21 March 2013 simply responds to a change in circumstances, which was described in paragraph 355 above.
358    Fourthly, the fact that the applicants were not given access to the minutes or decisions of the ECB relating to ELA and that their requests to that effect were rejected by that institution, as is apparent from the documents in the file, does not in itself demonstrate the inconsistent, disproportionate and unfair nature of the decision of the Governing Council of the ECB of 21 March 2013. The applicants’ argument in that regard is therefore manifestly unfounded.
359    Fifthly, it is necessary to examine the applicants’ argument that the decision of the Governing Council of the ECB of 21 March 2013 is vitiated by a lack of or insufficient reasoning.
360    The ECB rejects that argument. First, it argues that, as it was only raised at the reply stage, that argument is new and therefore inadmissible.
361    Secondly, the ECB recalls that the decision of the Governing Council of the ECB of 21 March 2013 is not public. In the ECB’s view, the fact that no reasons were given for the decision could not be inferred from the fact that it was not made public. Since the decision was addressed to the CBC, it would be sufficient for the latter’s representative to be informed of the reasons for the decision at the meeting of the Governing Council of the ECB.
362    From the outset, the plea of inadmissibility raised by the ECB must be dismissed, as the failure to state reasons or the inadequacy of the statement of reasons is an infringement of essential procedural requirements within the meaning of Article 263 TFEU and, as such, constitutes a plea of public policy which the Court may, at any time, raise of its own motion (see, to that effect, judgments of 20 February 1997, Commission v Daffix, C‑166/95 P, EU:C:1997:73, paragraph 24; of 2 April 1998, Commission v Sytraval and Brink’s France, C‑367/95 P, EU:C:1998:154, paragraph 67; and of 2 December 2009, Commission v Ireland and Others, C‑89/08 P, EU:C:2009:742, paragraph 34).
363    It is therefore necessary to examine the merits of the present argument.
364    It should be noted that, in cases where an EU institution, such as the ECB in the present case, has a wide discretion, the monitoring of compliance with certain procedural safeguards is of fundamental importance. Those safeguards include the obligation on the ECB to give adequate reasons for its decisions (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 69).
365    According to the case-law, the statement of reasons required by Article 296 TFEU must be appropriate to the nature of the act and must show clearly and unequivocally the reasoning of its author, so as to enable the persons concerned to know the reasons for the measure taken and the Court of the Union to exercise its review. In that regard, first of all, the obligation to state reasons must be assessed in the light of the circumstances of the case, in particular the content of the measure and the nature of the grounds relied on (see, to that effect, judgment of 1 July 2008, Chronopost and La Poste v UFEX and Others, C‑341/06 P and C‑342/06 P, EU:C:2008:375, paragraph 88). It is not required that the statement of reasons specify all the relevant points of fact and law, since the question whether the statement of reasons for an act satisfies the requirements of Article 296 TFEU must be assessed in the light not only of its wording, but also of its context and of all the legal rules governing the matter in question (see judgment of 6 September 2006, Portugal v Commission, C‑88/03, EU:C:2006:511, paragraph 88 and the case-law cited).
366    Next, a statement of reasons may be implicit, provided that it enables the persons concerned to know the reasons for which the measures in question were taken and the competent court to have sufficient information to exercise its review (see, to that effect, judgments of 7 January 2004, Aalborg Portland and Others v Commission, C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P, EU:C:2004:6, paragraph 372, and of 8 February 2007, Groupe Danone v Commission, C‑3/06 P, EU:C:2007:88, paragraph 46).
367    Finally, an examination of compliance with the obligation to state reasons can only be made on the basis of a formally adopted decision. However, other documents, such as a press release, may make it possible to ascertain the essential elements of the decision at issue and enable the persons concerned to know the reasons for which it was taken and the court to exercise its review (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 71).
368    In the present case, it should be noted that it is solely on the basis of the press release of 21 March 2013 that the applicants criticise the ECB for failing to provide any reasons in support of its decision of the same day to oppose the maintenance of the existing level of ELA as from 26 March 2013. However, that press release and that decision are not identical. As can be seen from paragraphs 111 and 112 above, that press release merely refers to the existence of that decision. It is clear from the ECB’s submissions that that decision was not published and that the reasons for it were communicated to the representative of the CBC, who was the sole addressee thereof. In those circumstances, it is necessary to determine whether the press release of 21 March 2013 enables those concerned to know the reasons for the decision referred to therein and enables the Court to exercise its review.
369    In that regard, first of all, it is apparent from the press release of 21 March 2013 that ‘the Governing Council of the [ECB] decided to maintain the current level of [ELA] until … 25 March 2013’ and that ‘thereafter, [ELA] could only be considered if an [EU or IMF] programme [was] in place that would ensure the solvency of the concerned banks [namely, the BoC and Laïki]’. It follows, implicitly but necessarily, that the solvency of the banks concerned would not have been guaranteed in the absence of such a programme. The comments of the President of the ECB at the press conference of 4 April 2013 (see paragraph 355 above) on the decision of 21 March 2013 of the Governing Council of the ECB support that interpretation:
‘[ELA] can be extended only to solvent and viable banks. Now, it so happened that in the absence of a programme, these banks would not have been solvent and viable. At that point in time the Governing Council assessed there was no programme in place, and that’s why it had to do what it did.’
370    Next, it should be noted that, at the time of the publication of the press release of 21 March 2013, the existence and nature of the difficulties faced by the Republic of Cyprus and the banks concerned were known. It was also known that the Republic of Cyprus had submitted a request for financial assistance to the President of the Eurogroup, that such assistance would be provided in the context of a macroeconomic adjustment programme to be embodied in a memorandum of understanding and that the Cypriot Parliament had rejected the institution of a measure which the Cypriot authorities had undertaken to take for the purpose of mobilising domestic resources to limit the volume of financial assistance linked to that programme (see, inter alia, paragraphs 14 to 16, 19 and 21 to 23 above).
371    Finally, it should be noted that, as stated in paragraph 108 above, the rules governing ELA prohibit its grant to insolvent credit institutions.
372    Consequently, in any event, in the circumstances of the present case, the wording of the press release of 21 March 2013, however laconic it may have been, enabled the applicants to understand, having regard in particular to the context, the applicable legal rules and the comments of the President of the ECB made at the press conference of 4 April 2013, that the insolvency of the banks concerned in the absence of an adequate adjustment programme was an obstacle to the maintenance of the existing level of ELA. That same press release allows the EU judicature to exercise its review. Consequently, the applicants’ argument concerning the statement of reasons for the decision of the Governing Council of the ECB of 21 March 2013 must be rejected.
373    Sixthly, as regards the alleged infringement of Article 14.4 of the ECB Statute, it is sufficient to note that the applicants make assertions, not in any way explaining how the ECB’s conduct in relation to ELA is vitiated by a breach of that provision.
374    Consequently, the applicants have failed to establish that the ECB’s conduct in relation to ELA was in breach of the principle of sound administration, Article 14.4 of the ECB Statute and the requirements of fairness and consistency. The applicants’ third set of arguments must therefore be rejected.
375    As the applicants’ three sets of arguments have thus been rejected, the complaint alleging infringement of Article 14.4 of the ECB Statute, the requirements of fairness and consistency and the principle of sound administration must be rejected.
2.      The existence of a possible infringement of the principle of the protection of legitimate expectations
376    As a preliminary point, it should be noted that the principle of the protection of legitimate expectations is one of the fundamental principles of the European Union (judgment of 24 March 2011, ISD Polska and Others v Commission, C‑369/09 P, EU:C:2011:175, paragraph 122). The right to rely on that principle presupposes that precise, unconditional and consistent assurances from authorised and reliable sources have been given to the person concerned by the competent authorities of the European Union. That right belongs to any person in respect of whom an institution, body, office or agency of the Union, by providing him or her with precise assurances, has given rise to well-founded expectations (see judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraph 62 and the case-law cited).
377    In the present case, the applicants consider that the defendants committed a serious breach of the principle of the protection of legitimate expectations. They submit that the defendants provided them with consistent and precise assurances that the harmful measures would not be imposed on the Republic of Cyprus. Those assurances are based, first, on a letter of 11 February 2013 from the Director of the Office of the Governor of the CBC on behalf of the Eurosystem to the respective executive directors of the banks concerned, secondly, on the Eurogroup’s commitment of 21 January 2013 as to the possibility of offering the FAF on the basis of a political agreement, agreed in November 2012, thirdly, the treatment of MSCE that received financial assistance before the Republic of Cyprus, fourthly, the ECB’s decision to allow ELA for a considerable period of time, and fifthly, the Commission’s decision of 13 September 2012 on State aid SA.34827 (2012/C) granted by Cyprus to [Laïki] in the context of its rescue recapitalisation (OJ 2012 C 341, p. 2) (‘the decision of 13 September 2012’).
378    The applicants add that those acts and conduct are capable of giving rise to a legitimate expectation on their part, not only taken individually but also taken together. According to the applicants, those acts and conduct have a cumulative effect which reinforced the assurance that no bail-in measures would be adopted.
379    It should be noted at the outset that the Eurogroup is not an entity established by the Treaties whose acts or conduct could be the subject of an action for non-contractual liability of the European Union under the second paragraph of Article 340 TFEU (see paragraph 95 above). Therefore, the Eurogroup’s alleged commitment of 21 January 2013 as to the possibility of offering the FAF on the basis of a political agreement, agreed in November 2012, cannot, in any event, give rise to a legitimate expectation on the part of the applicants capable of justifying non-contractual liability on the part of the European Union.
380    It is therefore only with regard to the other acts and conduct complained of by the applicants that the Court is entitled to examine the existence of legitimate expectations.
(a)    The existence of a legitimate expectation derived from the letter of 11 February 2013
381    The applicants claim that, in a letter of 11 February 2013, addressed to the respective executive directors of the banks concerned, the Director of the Office of the Governor of the CBC, on behalf of the Eurosystem, provided them with clear, precise, unconditional and legally compliant assurances that the rights of their depositors would not be restricted (see also paragraphs 336 to 338 above). In that regard, the applicants note, first, that, under Article 282(1) TFEU, the Eurosystem is composed of the ECB and the central banks of the MSCE and conducts the European Union’s monetary policy and, secondly, that the Eurosystem’s mission statement indicates that the Eurosystem speaks with one voice. Any reasonable observer would therefore have assumed that the letter in question was binding on the Eurosystem, including the ECB, which breached the applicants’ legitimate expectations by subsequently requiring the Republic of Cyprus to comply with the conditionality agreement. If, however, the ECB considered that that letter did not correctly present its position, it should have made a public statement to correct the errors in it. The ECB did not make any such statement, thereby incurring liability.
382    The defendants contest the applicants’ arguments.
383    In that regard, in the first place, it should be noted that there is nothing in the letter of 11 February 2013 which would allow a prudent and discerning reader to conclude that its content is attributable to the Eurosystem or the ECB.
384    First of all, that letter is addressed to the respective executive directors of the banks concerned by a person signing as Director of Communications and the Cabinet of the Governor of the CBC. At no point does that person claim to speak on behalf of the Eurosystem. On the contrary, as can be seen from the text of the letter itself, that person merely expresses the opinion of the CBC and makes no reference either to the bodies or to the operating rules of the Eurosystem:
‘Following the publication of an article in the Financial Times dated 10 February 2013 and titled “Radical rescue proposed for Cyprus”, the [CBC] wishes to stress that any action aimed at reducing, depriving or restricting the property rights of depositors, contradicts the provisions of the Constitution of the Republic of Cyprus and of Article 1 of Additional Protocol No 1 to the [ECHR], provisions which protect the right to own property and which are crucial to the functioning of a free market economy.
Hence, any suggestion to the contrary is not only legally unfounded but it cannot merit serious consideration.’
385    It is true that, as the applicants point out, the CBC logo appears in the header of that letter, followed by the words ‘Central Bank of Cyprus’ and ‘Eurosystem’ in capital letters.
386    However, the mere presence of that heading would not allow a prudent and circumspect reader to assume that that letter is attributable to the Eurosystem. On the contrary, the impression that emerges from that heading is, on the one hand, that the letter is written on behalf of the CBC and not the Eurosystem and, on the other hand, that the term ‘Eurosystem’ is of a purely informative nature, merely indicating the CBC’s membership of the Eurosystem in its capacity as the central bank of a MSCE. First, the characters making up the term ‘Eurosystem’ in the heading of the letter of 11 February 2013 are located below those making up the words ‘Central Bank of Cyprus’ and are significantly smaller than the latter.
387    Secondly, as the applicants themselves acknowledged in their response to the Court’s measures of organisation of procedure, the word ‘Eurosystem’ is presumably an integral part of the CBC’s logo. No conclusion can therefore be drawn from the mere presence of that wording on the letter of 11 February 2013, unless it is considered that all, or at least the majority, of the letters from the CBC are attributable to the Eurosystem solely on the basis that they mention the former’s membership of the latter.
388    Thirdly, the footer of the letter of 11 February 2013, which identifies the address and website of the CBC, does not refer to the Eurosystem.
389    In the second place, it is important to point out that national central banks perform two types of functions, namely, first, those provided for in the ECB Statute and, secondly, those which are not. The latter cannot be imputed to the ESCB or the Eurosystem. Article 14.4 of the ECB Statute provides that national central banks may perform functions other than those specified in the ECB Statute, unless the Governing Council of the ECB decides, by a two-thirds majority of the votes cast, that they interfere with the objectives and tasks of the ESCB. Conversely, functions which national central banks perform on their own responsibility and at their own risk are not considered to be ESCB functions (see paragraphs 104 to 106 above).
390    At the time of the events, the ECB Statute did not mention, among the tasks of the ECB or the ESCB, the determination of the conditions for recapitalisation or resolution of financial institutions. Those are therefore functions that national central banks perform on their own responsibility and at their own risk. In those circumstances, a prudent and circumspect reader could not reasonably consider that a statement made by the CBC in relation to the determination of the conditions for the recapitalisation or resolution of financial institutions was attributable to and binding on the Eurosystem. On the contrary, such a reader would necessarily have to consider that the CBC had expressed itself in the letter of 11 February 2013 in its own name and as a national central bank.
391    Contrary to what the applicants, in essence, claim, neither Article 282(1) TFEU nor the Eurosystem’s mission statement call that conclusion into question.
392    As regards, in the first place, Article 282(1) TFEU, it should be noted that it relates exclusively to the Eurosystem’s role in monetary policy. That provision reads as follows:
‘The [ECB], together with the national central banks, shall constitute the European System of Central Banks (ESCB). The [ECB], together with the national central banks of the [MSCE], which constitute the Eurosystem, shall conduct the monetary policy of the Union.’
393    The applicants could not therefore reasonably infer from Article 282(1) TFEU that the Eurosystem would guarantee the preservation of the value of deposits in the banks concerned in the event of their recapitalisation or resolution.
394    With regard, in the second place, to the ECB’s and the Eurosystem’s mission statement, it should be noted, first, that that statement is a mere statement of intent without any legal force (see, by analogy, judgment of 23 September 2015, ClientEarth and International Chemical Secretariat v ECHA, T‑245/11, EU:T:2015:675, paragraph 103 and the case-law cited) and which was, in that regard, not published either in the L series of the Official Journal of the European Union, the purpose of which is to publish legally binding acts, or in the C series thereof, which publishes information, recommendations and opinions concerning the European Union (see, by analogy, judgment of 13 December 2012, Expedia, C‑226/11, EU:C:2012:795, paragraph 30). That statement is, by its very nature, purely aspirational and is not intended to impose obligations on its authors or to list exhaustively all the tasks and competences of the members of the Eurosystem.
395    Secondly, the content of that statement does not suggest that the Eurosystem has any competence to protect bank deposits in the event of a bank’s recapitalisation or resolution. On the contrary, that statement indicates that the Eurosystem’s primary objective is to maintain price stability. It is true that that statement also indicates that the Eurosystem, acting as the main financial authority, aims to safeguard financial stability and promote financial integration in the European Union. However, a prudent and informed reader could not reasonably draw the conclusion from such a vague statement that the Eurosystem was competent to determine the conditions for the possible recapitalisation or resolution of the banks concerned.
396    Likewise, the indications that, ‘while respecting the legal status of its members, the Eurosystem and its staff shall act and appear as a cohesive and unified entity’ and, ‘in that spirit and working as a team, the Eurosystem shall speak with a single voice and be close to the citizens of Europe’ cannot reasonably be interpreted as meaning that any communication from a national central bank which is a member of the Eurosystem is made on behalf of the latter. At issue is, rather, a general and imprecise declaration of intent, which at the most is applicable to the areas in which the Eurosystem is competent.
397    Finally, it is in vain that the applicants argue, in essence, that in the present case it is necessary to depart from the conclusions reached in the judgment of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486).
398    The fact that the letter of 11 February 2013 may have been disseminated to a wide audience, or the fact that its purpose may have been to reassure depositors and the markets, which would have been relevant to the protection of financial stability in the euro area, which the applicants rely on, cannot suffice to call into question the findings in paragraphs 409 to 422 of the judgment of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), from which it was inferred that no legitimate expectations could be derived by the applicants in the case giving rise to that judgment from the letter of 11 February 2013, as well as the findings in paragraphs 383 to 397 above.
399    It must therefore be concluded that the applicants have failed to establish that they could derive from the letter of 11 February 2013 a legitimate expectation that the harmful measures would not be adopted. It cannot therefore, a fortiori, be held that the ECB, by acts and conduct subsequent to that letter, breached that expectation.
(b)    The existence of legitimate expectations based on the treatment of MSCE that received financial assistance before the Republic of Cyprus
400    The applicants claim that they had a legitimate expectation that the harmful measures would not be adopted because the granting of financial assistance to other MSCE, namely Ireland, the Hellenic Republic, the Kingdom of Spain and the Portuguese Republic, had not been made conditional on the adoption of bail-in measures.
401    The defendants have not explicitly taken a position on that argument.
402    In that regard, in the first place, it should be emphasised that the mere fact that, in earlier phases of the international financial crisis, the granting of financial assistance was not conditional on the adoption of measures comparable to the harmful measures cannot, as such, be regarded as a precise, unconditional and consistent assurance capable of giving rise to legitimate expectations on the part of the depositors of the banks concerned that the granting of financial assistance to the Republic of Cyprus would not be so conditional (see, to that effect and by analogy, judgment of 19 July 2016, Kotnik and Others, C‑526/14, EU:C:2016:570, paragraphs 65 and 66).
403    In the second place, it should be noted that the measures to which the granting of financial assistance by the ESM (or by other international organisations, Union bodies and institutions or States) may be made conditional in order to resolve the financial difficulties encountered by a State in need of recapitalising its banking system are likely to vary fundamentally from case to case depending on the experience acquired and a set of particular circumstances (see paragraph 279 above). In those circumstances, in the absence of a clear and explicit undertaking by the competent authorities, it cannot be considered that the applicants could legitimately expect the grant of the FAF to be subject to conditions identical or even similar to those to which the grant of financial assistance to Ireland, the Hellenic Republic, the Kingdom of Spain and the Portuguese Republic was subject.
404    In the light of the foregoing, it must be concluded that the applicants have failed to establish that they could derive a legitimate expectation from the fact that the granting of an FAF to other MSCE was not conditional on the adoption of measures comparable to the harmful measures.
(c)    The existence of legitimate expectations based on the fact that the ECB decided to authorise ELA for a prolonged period
405    The applicants consider that they can derive a legitimate expectation from the fact that the ECB authorised the CBC to grant ELA to Laïki for a prolonged period.
406    The ECB contests the applicants’ arguments.
407    In that regard, it is sufficient to note that the applicants do not explain in any way how the fact that the ECB authorised the CBC to grant ELA to Laïki for a prolonged period could have given rise to a legitimate expectation on their part that the harmful measures would not be adopted. The applicants therefore failed to establish that they could derive a legitimate expectation from that fact.
(d)    The existence of legitimate expectations based on the decision of 13 September 2012
408    The applicants claim that specific assurances that Laïki would not become insolvent and that the rights of depositors would not be restricted are apparent from the decision of 13 September 2012. In that decision, the Commission approved the grant of State aid to Laïki in the form of a recapitalisation of EUR 1.8 billion on the ground that it was a systemically important bank whose failure could create a serious disturbance in the Cypriot economy, that the capital injection was then considered to be an appropriate, necessary and proportionate measure and that the aid measure was conditional, inter alia, on the commitment of the Cypriot Government to submit a restructuring plan. That plan was prepared and approved in the course of March 2013, but the Commission finally did not examine it in view of the Eurogroup decisions of 16 and 25 March 2013.
409    The Commission and the ECB contest the applicants’ arguments.
410    First of all, it should be pointed out that the decision of 13 September 2012 merely authorises temporary rescue aid for Laïki, conditional on the submission of a restructuring plan for the bank by the Cypriot authorities. Thus, it does not indicate that the financial difficulties of the beneficiary bank were definitively solved by the temporary support provided to it.
411    Next, it is true that recitals 43 and 48 of the decision of 13 September 2012 refer to the systemic importance of Laïki for the economy of Cyprus.
412    However, those grounds were retained by the Commission in the context of an examination of whether, on the basis of the evidence available in September 2012, the temporary rescue aid measure for Laïki in the form of a recapitalisation envisaged by the Cypriot authorities at that time could be authorised as a necessary and appropriate measure to safeguard financial stability within the meaning of Article 107(3)(b) TFEU. It does not follow from the decision of 13 September 2012 that a further rescue measure financed by public resources would necessarily be taken if the financial difficulties faced by the bank were to persist or that restructuring measures of another nature would be excluded as a matter of principle.
413    It follows that the decision of 13 September 2012 did not contain any specific and unconditional assurance that Laïki could not, in the future, become insolvent or be subject to measures such as those resulting from the harmful measures. It is irrelevant in that respect whether or not a restructuring plan for the bank was subsequently actually examined by the Commission.
414    It follows from those considerations that the applicants clearly could not derive any legitimate expectation from the decision of 13 September 2012 that Laïki would not become insolvent and that the rights of depositors would not be restricted.
415    In the light of all the foregoing, it must be held that the applicants could not derive legitimate expectations from any of the acts and conduct referred to in paragraph 377 above, taken individually. Nor, therefore, could those acts and conduct, taken together, by cumulative effect, give rise to legitimate expectations on their part.
416    Furthermore, the applicants submit, in essence, that in the present case it is necessary to depart from the conclusions reached in paragraph 181 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), because the Court of Justice referred to case-law relating to the legitimate expectations of economic operators which is not relevant to the assessment of their own situation as depositors in the banks concerned. That would also call into question the examination of legitimate expectations in relation to the letter of 11 February 2013.
417    In that regard, it is sufficient to note that, contrary to what the applicants maintain, in paragraphs 181 and 182 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), the Court of Justice held that it was by analogy that the finding in the case which gave rise to the judgment of 19 July 2016, Kotnik and Others (C‑526/14, EU:C:2016:570), was relevant to the cases before it and, secondly, paragraph 181 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), does not relate to the consideration, in the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486) and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), of the legitimate expectation that might be derived from the letter of 11 February 2013.
418    It follows that the applicants’ complaint alleging breach of the principle of the protection of legitimate expectations can only be rejected.
3.      The existence of a possible infringement of the principle of equal treatment
419    The principle of equal treatment is a general principle of EUn law, enshrined in Articles 20 and 21 of the Charter (judgment of 14 September 2010, Akzo Nobel Chemicals and Akcros Chemicals v Commission and Others, C‑550/07 P, EU:C:2010:512, paragraph 54). The EU institutions are bound to respect that principle as a superior rule of EU law protecting individuals (judgments of 7 October 2015, Accorinti and Others v ECB, T‑79/13, EU:T:2015:756, paragraph 87, and of 24 January 2017, Nausicaa Anadyomène and Banque d’escompte v ECB, T‑749/15, not published, EU:T:2017:21, paragraph 110).
420    It is settled case-law that the principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way, unless such treatment is objectively justified (see judgment of 14 September 2010, Akzo Nobel Chemicals and Akcros Chemicals v Commission and Others, C‑550/07 P, EU:C:2010:512, paragraph 55 and the case-law cited). The factors which characterise different situations and thus their comparable nature must, in particular, be determined and assessed in the light of the object and purpose of the measures at issue, it being understood that account must be taken, for that purpose, of the principles and objectives of the field to which those measures relate (see, to that effect, judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others, C‑127/07, EU:C:2008:728, paragraph 26 and the case-law cited).
421    Since the applicants have pleaded infringement of the principle of equal treatment, it is for them to identify precisely the comparable situations which they consider to have been treated differently or the different situations which they consider to have been treated identically (see, to that effect, judgment of 12 April 2013, Du Pont de Nemours (France) and Others v Commission, T‑31/07, not published, EU:T:2013:167, paragraph 311).
422    In the present case, it should be noted at the outset that, in the application, the applicants complain that they were discriminated against ‘vis-à-vis depositors of the Co-Op Savings Bank’, without in any way developing that complaint. In the reply filed on 25 September 2017, the applicants merely argued, with regard to the existence of discrimination between the depositors of the banks concerned and the depositors in the ‘Co-Op Savings Bank’, that the Council was wrong to maintain in the defence that the latter was not in a situation comparable to that of the banks concerned.
423    Such a complaint, which is not otherwise substantiated, does not enable the Court to identify the ‘Co-Op Savings Bank’ or to understand the situation of its depositors. Consequently, that complaint clearly cannot constitute an admissible plea within the meaning of Article 76(d) and (e) of the Rules of Procedure and the case-law cited in paragraph 181 above.
424    Furthermore, the applicants claim that the defendants infringed the principle of equal treatment in four respects, which the defendants contest.
(a)    The existence of discrimination against Laïki’s creditors whose claims originate in the ELA
425    The applicants claim that the uninsured deposit holders of Laïki were discriminated against in relation to Laïki’s creditors whose claims originated in the ELA. To the extent that Laïki’s debt arising from ELA was transferred to the BoC, those creditors could, in effect, apply to the BoC, while Laïki’s debt to the uninsured deposit holders would be cancelled.
426    The applicants add that the transfer of the Laïki debt arising from ELA to the BoC placed a considerable burden on the latter. Other categories of applicants were also discriminated against as a result. The transfer in question led, first, to the imposition of drastic limits on the claims of the BoC’s depositors and, secondly, to a decrease in the value of the shares of the banks concerned. The ECB, which is behind ELA, and the other defendants thus favoured their own interests to the detriment of those of the applicants.
427    The defendants contest the applicants’ arguments.
428    As a preliminary point, it should be recalled that the applicants were, on the date on which the harmful measures were adopted, holders of deposits of the banks concerned, so that they are clearly not entitled to complain about the treatment of the persons who were then shareholders in the BoC.
429    In the first place, it is important to note that the transfer of the debt arising from ELA to the BoC is included in the conditions for the granting of the FAF. Paragraph 1.26 of the Memorandum of Understanding of 26 April 2013 provides:
‘[The BoC] is taking over – via a purchase and assumption procedure – almost the entire Cypriot assets of [Laïki] at fair value, as well as the latter’s insured deposits and [ELA] exposure at nominal value. The uninsured deposits of [Laïki] will remain in the legacy entity ...’
430    In the second place, it should be noted that, as the applicants acknowledged in their response to the Court’s measures of organisation of procedure, the granting of ELA falls within the competence of the national central banks, with the ECB only having the competence to prohibit the national central banks from granting ELA where it interferes with the objectives and tasks of the ESCB (see paragraphs 103 to 109 above). In accordance with that division of powers, only the CBC granted ELA to Laïki and thus had a claim on Laïki. In those circumstances, as the ECB rightly argues, only the CBC had a right under the loan agreement with Laïki to repay the debt arising from the granting of ELA to Laïki. Consequently, the categories of persons who could, in the light of the applicants’ arguments (see paragraphs 425 and 426 above), have been treated differently as a result of the transfer to the BoC of Laïki’s debt arising from ELA are the CBC, first, and the holders of uninsured deposits in the banks concerned, secondly.
431    In the third place, it should be noted that a private operator, who, like the holders of uninsured deposits in the banks concerned, acted solely in his or her own private financial interest, is in a different situation within the meaning of the case-law referred to in paragraph 420 above from a Eurosystem central bank, whose decisions were guided exclusively by public interest objectives. The mere fact that depositors and a Eurosystem central bank whose decisions are guided by such objectives hold the same debt instrument against the same bank does not invalidate that conclusion, so that the principle of equal treatment cannot require that those two categories of persons be treated in an identical manner (see, to that effect, judgments of 7 October 2015, Accorinti and Others v ECB, T‑79/13, EU:T:2015:756, paragraph 92, and of 24 January 2017, Nausicaa Anadyomène and Banque d’escompte v ECB, T‑749/15, not published, EU:T:2017:21 paragraphs 108 and 109).
432    In the present case, however, the CBC acquired the claim arising from ELA in order to contribute to the achievement of an objective of general interest, consisting in stabilising one of the two largest Cypriot banks and, by extension, the country’s financial system. It follows from paragraphs 104 and 105 above that the CBC granted ELA to Laïki in the exercise of the powers of public authority vested in it under Cypriot law. In particular, it follows from the ECB’s reply to the Court’s measures of organisation of procedure and from the CBC’s letter annexed thereto that ELA is an instrument to enable the CBC to carry out the task of ensuring the stability of the financial system entrusted to it by Section 6(2)(e) in conjunction with Section 46(3) of the Law of 19 July 2002.
433    Furthermore, it should be noted that, as the Commission and the ECB rightly point out, the claim arising from ELA was secured by the assets of Laïki. As the holder of that claim, the CBC was therefore, unlike the uninsured depositors in the banks concerned, a preferred creditor.
434    In the fourth place, the applicants claim, in essence, that in the present case it is necessary to depart from the conclusions reached in paragraphs 193 to 196 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), on the ground that the Court of Justice merely repeated the reasons given in the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), and accepted that they were well founded without itself providing any reasons.
435    However, that argument is clearly unfounded, since it is apparent from paragraphs 193 to 196 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), that the Court of Justice, after examining the grounds of the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), held that those judgments were not vitiated by any error of law and accordingly rejected the arguments in the appeals.
436    In the light of the foregoing, it must be held that the respective situations of the CBC, on the one hand, and the uninsured deposit holders in the banks concerned, on the other hand, were not comparable. The applicants have therefore failed to establish that the defendants discriminated against those categories of persons in relation to the CBC.
(b)    The existence of possible discrimination with regard to the holders of deposits in the Greek branches
437    The applicants consider that they have been discriminated against on the basis of nationality in relation to the holders of deposits in the Greek branches. In that regard, the applicants point out that, while the grant of the FAF was made conditional on the adoption by the Cypriot authorities of a bail-in measure affecting deposits with the banks concerned in Cyprus, it was not made subject to a similar condition in respect of deposits which had been made in those banks in Greece. Those were to be transferred to a Greek bank as a result of the latter’s acquisition of the Greek branches and could therefore, in principle, remain unaltered. In the absence of any objective justification, such a difference in treatment contravenes the fundamental freedoms guaranteed by the Treaty or is prohibited by Article 18 TFEU.
438    The defendants contest the applicants’ arguments.
439    In the first place, it is, first, common ground between the parties that the Greek branches were branches within the meaning of Article 4(3) 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). As such, those branches constituted parts without legal personality of the banks concerned and directly carried out all or some of the operations inherent in the activity of a credit institution.
440    Secondly, under Article 4(1) of Directive 94/19, as amended by Directives 2005/1 and 2009/14, the depositors of those branches were covered by the Cypriot deposit-guarantee scheme.
441    Thirdly, it follows from recital 21 and Articles 40 to 43 of Directive 2006/48 that the responsibility for the supervision of the financial soundness of Greek branches, and in particular their solvency, rested with the Cypriot authorities, the Greek authorities being responsible only for the supervision of the liquidity of those branches and for monetary policies.
442    It follows that the applicants holding deposits with the banks concerned in Cyprus and the holders of deposits with the Greek branches had deposits with the same banks, covered by the same deposit-guarantee-scheme and subject to the same rules. Therefore, the situation of the applicants with deposits with the banks concerned in Cyprus and the situation of the holders of deposits with the Greek branches were comparable.
443    Unlike the deposits with Greek branches, the deposits with the banks concerned in Cyprus were subject to bail-in measures. It must therefore be considered that the applicants holding deposits with the banks concerned in Cyprus were treated unfavourably in relation to the holders of deposits with the Greek branches.
444    The ECB’s arguments cannot undermine that conclusion. First, the ECB submits that any discrimination suffered by the applicants should be considered as ‘reverse discrimination’, which is not prohibited by EU law.
445    It is true that, according to settled case-law, EU law does not preclude, in situations which do not present any factor connecting them to one of the situations envisaged by that law and all the relevant elements of which are confined within a single Member State, nationals of that Member State from receiving, from that State, less favourable treatment than that accorded to nationals of another Member State (see, to that effect, judgments of 16 June 1994, Steen, C‑132/93, EU:C:1994:254, paragraph 11, and of 1 April 2008, Government of the French Community and Walloon Government, C‑212/06, EU:C:2008:178, paragraph 33).
446    However, that case-law does not apply to acts or omissions by which one or more EU institutions contribute to such treatment or require its maintenance or continued implementation. In the present case, the question is precisely whether the defendant institutions could support the adoption and implementation of a memorandum of understanding which made the granting of the FAF conditional on unequal treatment or required its maintenance or continued implementation.
447    Therefore, even supposing that allegations of discrimination between depositors of Cypriot banks and holders of deposits with Greek branches of those same banks can be regarded as referring to a situation in which all the relevant elements are confined to the territory of a single Member State, the ECB’s argument that any discrimination suffered by the applicants should be regarded as ‘reverse discrimination’, which is not prohibited by EU law, must be rejected.
448    Secondly, the ECB notes that the sale of the Greek branches took place at market prices and therefore maintained the capital base of the banks concerned. Therefore, the sale did not cause any additional disadvantage to the applicants.
449    In that regard, it should be noted that, in order for an EU institution to be held to have infringed the principle of equal treatment, the treatment in question must have resulted in a disadvantage for some persons compared with others. However, the existence of such a disadvantage cannot be denied solely on the ground that the difference in treatment at issue has not led to adverse economic consequences, since the disadvantage to be taken into account with regard to the principle of equal treatment may also be such as to affect the legal position of the person concerned by that difference in treatment (see, to that effect and by analogy, judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others, C‑127/07 EU:C:2008:728, paragraphs 39 and 44). The ECB’s argument relates exclusively to the absence of any additional economic loss suffered by the applicants as a result of the sale of the Greek branches. Therefore, even if it were true, that circumstance alone is not sufficient to demonstrate the absence of discrimination prohibited by EU law. At most, as the ECB seems to consider, that circumstance could be relevant for the purpose of assessing the proportionality of any difference in treatment to the objective pursued. Initially, however, the relevant question remains whether the applicants holding deposits in the banks concerned in Cyprus were in a similar situation to those holding deposits in the Greek branches, which is the case here (see paragraph 442 above).
450    In accordance with the case-law referred to in paragraph 420 above, it is therefore necessary to examine whether there is, in the present case, an objective justification for the difference in treatment to which the applicants holding deposits with the banks concerned in Cyprus were subjected in relation to the holders of deposits with the Greek branches.
451    As indicated in paragraphs 304 to 306 above, that difference in treatment was due, inter alia, to the need to prevent any contagion effect from the Cypriot banking system to the Greek financial system. As the applicants agreed in response to the Court’s measures of organisation of procedure, it appears from an internal ECB report annexed to the reply that a haircut on deposits made with Greek branches would have risked triggering a widespread withdrawal of deposits in Greece, That, in turn, could have exacerbated the low funding capacity of Greek banks, thus potentially calling for an increase in ELA granted to them to a level potentially exceeding the actual capacity of the Eurosystem central banks.
452    Furthermore, it should be noted that a difference in treatment is justified where it is based on an objective and reasonable criterion, that is to say, where it is related to a legally permissible aim pursued by the legislation in question, and where it is proportionate to the aim pursued by the treatment concerned (judgment of 16 December 2008, Arcelor Atlantique et Lorraine, C‑127/07, EU:C:2008:728, paragraph 47).
453    With regard, first, to the question whether the difference in treatment between the applicants holding deposits in the banks concerned in Cyprus and the holders of deposits in the Greek branches was based on an objective and reasonable criterion, it should be noted that, for the reasons set out in paragraphs 220 and 221 above and in the light of the case-law of the European Court of Human Rights (ECtHR, 21 July 2016, Mamatas and Others v. Greece, CE:ECHR:2016:0721JUD006306614, §§ 103 and 138), the aim of preventing a general destabilisation of the Greek financial system via contagion through the Cypriot banking system must be regarded as objective and reasonable.
454    With regard, secondly, to the proportionality of the difference in treatment between the applicants holding deposits with the banks concerned in Cyprus and the holders of deposits with the Greek branches, it is important to recall that a difference in treatment is proportionate where it is suitable for achieving the legitimate objectives pursued and does not go beyond what is necessary to attain them (see, to that effect, judgment of 13 March 2012, Melli Bank v Council, C‑380/09 P, EU:C:2012:137, paragraph 52 and the case-law cited).
455    For reasons similar to those set out in paragraphs 312 to 331 above, it must be held that that difference in treatment is appropriate to achieve the objectives pursued and does not go beyond what is necessary for that purpose.
456    Consequently, the fact that the FAF, on the one hand, was made conditional on the adoption by the Cypriot authorities of a measure ordering a haircut on deposits in the banks concerned made in Cyprus and, on the other hand, was not made conditional on a similar condition in respect of deposits made in Greece was objectively justified and therefore does not constitute a breach of the principle of equal treatment.
457    In the second place, the applicants submit that the harmful measures are contrary, first, to the free movement of capital in that they treated depositors differently on account of the Member State in which the deposits were made and, secondly, to the freedom of establishment in that they inflicted losses on persons exercising that freedom in Cyprus, as a result of which they entered the market under less favourable conditions.
458    Even assuming that those arguments, which are not otherwise substantiated, sufficiently establish that the harmful measures have impeded the exercise of the freedoms provided for in Articles 49 and 63 TFEU, it follows from the settled case-law of the Court of Justice that a restriction on one of the fundamental freedoms guaranteed by the TFEU may be permitted if it pursues a legitimate objective compatible with that Treaty and is justified by overriding reasons in the general interest, provided that the application of such a measure is suitable for securing the attainment of the objective in question and does not go beyond what is necessary to attain that objective (see, to that effect, judgment of 16 December 2021, Prefettura di Massa Carrara, C‑274/20, EU:C:2021:1022, paragraph 31 and the case-law cited).
459    For the reasons already set out in paragraphs 451 to 456 above, the fact that the FAF, first, was made conditional on the adoption by the Cypriot authorities of a measure ordering a haircut on deposits in the banks concerned in Cyprus and, secondly, has not been made subject to a similar condition as regards deposits in Greece is justified by the overriding reason of public interest to prevent a general destabilisation of the Greek financial system via contagion through the Cypriot banking system and does not go beyond what is necessary to do so.
460    The complaints alleging infringement of Articles 49 and 63 TFEU are therefore manifestly unfounded.
461    It must be held that the applicants have failed to demonstrate the existence of a breach of the principle of equal treatment or of the freedoms laid down in Articles 49 and 63 TFEU as a result of the different treatment of their deposits and those lodged with Greek branches.
(c)    The existence of an infringement of the principle of equal treatment based on discrimination against depositors in the banks concerned whose deposits did not exceed EUR 100 000
462    The applicants claim that those of them whose deposits in the banks concerned exceeded EUR 100 000 were discriminated against in relation to the depositors of those banks whose deposits did not exceed that amount. Deposits up to EUR 100 000 were fully covered by the Cypriot deposit-guarantee scheme, while deposits of a higher amount were covered only up to the amount of EUR 100 000. The fact that Directive 94/19, as amended by Directives 2005/1 and 2009/14, required Member States to set up a scheme to cover all the deposits of a single depositor up to EUR 100 000 does not justify preventing the holders of uninsured deposits from obtaining compensation in the event of liquidation, nor does it explain why a depositor holding deposits of EUR 100 000 would not suffer any haircut, while a depositor who holds deposits of EUR 1 000 000 would be subject to a 90% haircut.
463    The defendants contest the applicants’ arguments.
464    In that regard, it should be noted that the discrimination complained of by the applicants in fact concerns two separate aspects of the harmful measures.
465    First, at issue is the measure referred to in paragraph 5 of Decree No 104, which provides, in accordance with paragraph 1.26 of the Memorandum of Understanding of 26 April 2013, that the debts of Laïki to each of its depositors up to a limit of EUR 100 000 are to be transferred to the BoC, with amounts in excess of EUR 100 000 remaining with Laïki, pending its liquidation (see paragraph 36 above). It must be noted that that measure applies indiscriminately to all of Laïki’s depositors. Contrary to what the applicants essentially maintain, it does not therefore establish any difference in treatment between those depositors on the basis of the amount of the deposits they have made in that bank.
466    The mere fact that the transfer to the BoC of the deposits made in Laïki is subject to a uniform ceiling of EUR 100 000 per depositor, and is therefore liable to have different repercussions on those depositors depending on the size of their deposits, cannot call that conclusion into question. Any such difference results from the application of the guarantee ceiling of EUR 100 000 laid down by Article 7(1a) of Directive 94/19, as amended by Directives 2005/1 and 2009/14, the illegality of which the applicants have not pleaded. That is a criterion which is both objective and appropriate to the needs of the functioning of the Union’s banking system (see, to that effect and by analogy, judgments of 19 September 2013, Panellinios Syndesmos Viomichanion Metapoiisis Kapnou, C‑373/11, EU:C:2013:567, paragraph 34 and the case-law cited, and of 30 September 2009, Arkema v Commission, T‑168/05, not published, EU:T:2009:367, paragraph 115). Recital 16 of Directive 94/19, as amended by Directives 2005/1 and 2009/14, states that the purpose of the abovementioned guarantee threshold is, first, not to leave too large a proportion of deposits unprotected, in the interests of both consumer protection and the stability of the financial system and, second, to take account of the cost of financing guarantee schemes and not to impose throughout the European Union a level of protection which, in certain cases, could have the effect of encouraging poor management by credit institutions.
467    Secondly, at issue are the BoC share conversion measures, provided for in Decree No 103, as amended, the substance of which is set out in paragraphs 1.26 and 1.27 of the Memorandum of Understanding of 26 April 2013. That measure provides that the haircut on uninsured BoC deposits applies only to the BoC depositors whose deposits exceed EUR 100 000. The result, as the applicants rightly point out, is therefore a difference in treatment between the BoC depositors depending on whether or not the amount of the deposits they have made in the BoC exceeds EUR 100 000.
468    However, contrary to what the applicants maintain, that difference in treatment in no way constitutes unequal treatment prohibited by EUn law. As the Council and the ECB correctly point out, depositors whose deposits in the banks concerned exceed EUR 100 000 are in a legally distinct situation from depositors whose deposits in the banks concerned do not exceed that amount. Under Article 7(1a) of Directive 94/19, as amended by Directives 2005/1 and 2009/14, the deposits of the latter were, in the event of unavailability of deposits, fully covered by the Cypriot deposit-guarantee scheme, while those of the former were only covered up to an amount of EUR 100 000.
469    Furthermore, the applicants submit, in essence, that in the present case it is necessary to depart from the conclusions reached in the judgments of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), and of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), as regards, first, the inapplicability of the judgment of the ECtHR of 21 July 2016, Mamatas and Others v. Greece (CE:ECHR:2016:0721JUD006306614, § 137), to the present case, on the ground that it concerns the situation of bondholders, secondly, the circumstance that, in paragraph 482 of the judgment of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), the Court erred in finding that the difference in treatment resulted from the harmful measures and, thirdly, the absence of any indication as to why Directive 94/19, as amended by Directives 2005/1 and 2009/14, would be such as to justify such a difference in treatment and why the fact that the Commission and the ECB supported the imposition of a 6.75% tax on deposits of EUR 100 000 or less demonstrates the arbitrary nature of that threshold.
470    Those arguments are clearly unfounded. First, in paragraph 200 of the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), the Court of Justice did not rely on the risk incurred by depositors in relation to bondholders but on the fact that the status of bank depositor falls within the scope of Directive 94/19, as amended by Directives 2005/1 and 2009/14. Secondly, it is apparent from paragraphs 482 and 483 of the judgment of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486) that, in examining a difference in treatment, the General Court took into account both the harmful measure at issue and the guarantee ceiling of EUR 100 000. Thirdly, paragraph 483 of the judgment of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), sets out how the threshold of EUR 100 000 provided for in Directive 94/19, as amended by Directives 2005/1 and 2009/14, is justified.
471    In view of the foregoing, no unlawful discrimination against the applicants whose deposits with the banks concerned exceeded EUR 100 000 can be found in the present case.
(d)    The existence of an infringement of the principle of equal treatment based on discrimination in relation to depositors of banks in other MSCE which received financial assistance before the Republic of Cyprus
472    The applicants consider that they have been discriminated against in relation to depositors of banks established in MSCE which received financial assistance similar to the FAF before the Republic of Cyprus. First, the applicants point out that the amount of that assistance was in each case greater than that of the FAF granted to the Republic of Cyprus, but that the deposits of banks in those Member States were not affected. Secondly, the applicants claim that the Greek banks benefited from aid amounting to EUR 50 billion to compensate for the effect of the PSI, whereas the latter affected the banks concerned more seriously than the Greek banks.
473    The applicants conclude that they were indirectly discriminated against on the basis of their nationality, in breach of Article 18 TFEU and Article 21 of the Charter. As for the Republic of Cyprus, it was discriminated against in relation to the other MSCE which received aid similar to the FAF.
474    The defendants contest the applicants’ arguments.
475    In that regard, it should be noted that the measures that may be attached to financial assistance provided by the ESM to resolve the financial difficulties faced by a State facing recapitalisation needs of its banking system may vary fundamentally from case to case depending on a range of factors other than the size of the assistance in relation to the size of the economy of that State. Those factors may include, in particular, as indicated in paragraph 279 above, the economic situation of the beneficiary State, the prospects of the banks concerned returning to economic viability, the reasons for the difficulties encountered by the banks concerned, including, where appropriate, the excessive size of the beneficiary State’s banking sector in relation to its national economy, the evolution of the international economic situation or a high probability of future interventions by the ESM (or other international organisations, Union bodies and institutions or States) in support of other States in difficulty which may require a preventive limitation of the amounts dedicated to each intervention.
476    In the present case, the applicants, who, in accordance with the case-law cited in paragraph 421 above, had a duty to identify precisely the comparable situations which had been the subject of differential treatment, did not, apart from several references to the size (absolute and relative) of the financial assistance granted to the four MSCE concerned, explain in any way how the situation of those MSCE was, at the material time, comparable to that of the Republic of Cyprus (see paragraphs 279 and 280 above).
477    In the light of the foregoing, the applicants have failed to establish that they were in a situation comparable to that of the depositors of banks established in MSCE which benefited from aid similar to the FAF before the Republic of Cyprus.
478    It cannot therefore be held that the fact that the grant of the FAF was conditional on the adoption of measures aimed at reducing the size of the Cypriot financial sector, whereas the grant of financial assistance to the other MSCE was not conditional on the adoption of similar measures, constitutes a breach of the principle of equal treatment in relation to the applicants or, assuming that they can claim a breach of that principle in relation to a third party, the Republic of Cyprus.
479    In the light of all the foregoing, it must be concluded that the applicants have failed to demonstrate the existence of a breach of the principle of equal treatment in their regard. It cannot therefore be held that the Commission and the ECB, by supporting the harmful measures, have contributed to a breach of that principle.
480    It follows that the first condition for the European Union’s non-contractual liability to be called into question is not satisfied in the present case, so that the claims for compensation made by the applicants must be rejected.
E.      Conclusions on the dismissal of the action
481    In view of all the foregoing considerations, it should be noted that, first, the present case falls within the same legal and factual framework as the two cases giving rise to the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), and that the essence of the pleas in law and arguments raised by the applicants in the present case is identical to the arguments raised by the applicants in the actions which gave rise to those judgments.
482    In the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), the actions were dismissed, in part, on the ground that the General Court did not have jurisdiction, in part, as inadmissible, and in part, as unfounded. In the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), the Court of Justice set aside those judgments only in so far as they dismissed the pleas of inadmissibility raised by the Council to the extent that they related to the actions brought in those cases against the Eurogroup and Article 2(6)(b) of Decision 2013/236 and upheld those pleas of inadmissibility.
483    Furthermore, it follows from paragraphs 87 to 95, 251, 289 and 290, 397 and 398, 416 and 417, 434 and 435 and 469 to 471 above that it is necessary to reject the applicants’ arguments that the Court should depart, in the context of the present action, from the conclusions reached in the judgments of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028); of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486); and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487).
484    It follows that it is clear that the present action, in so far as it is based on pleas and arguments which are rejected, in the present order, on grounds identical to those of the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486), and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), or on grounds which are evident from the conclusions reached in the judgment of 16 December 2020, Council and Others v K. Chrysostomides & Co. and Others (C‑597/18 P, C‑598/18 P, C‑603/18 P and C‑604/18 P, EU:C:2020:1028), must be dismissed partly on the ground that the Court lacks jurisdiction, partly as inadmissible and partly as unfounded.
485    Secondly, as regards the pleas and arguments raised in the present action which are not rejected, in the present order, on grounds identical to those in the judgments of 13 July 2018, K. Chrysostomides & Co. and Others v Council and Others (T‑680/13, EU:T:2018:486) and of 13 July 2018, Bourdouvali and Others v Council and Others (T‑786/14, not published, EU:T:2018:487), it follows from paragraphs 136, 152 to 162, 171, 176, 188 and 189, 196 and 197, 213, 284 to 288, 352, 356, 358, 408 to 414, 423, 428 and 457 to 460 above that the Court manifestly lacks jurisdiction to hear them, that they are manifestly inadmissible or that they are manifestly unfounded.
486    Therefore, the present action, as a whole, must be dismissed, in part, on the ground that the Court manifestly lacks jurisdiction, in part, as being manifestly inadmissible and, in part, as being manifestly unfounded.
IV.    Costs
487    Under Article 138(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.
488    Since the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Council, the Commission and the ECB.
On those grounds,
THE GENERAL COURT (First Chamber, Extended Composition)
hereby orders:
1.      The action is dismissed.
2.      Basicmed Enterprises Ltd and the other applicants whose names are listed in the annex shall pay, in addition to their own costs, those incurred by the Council of the European Union, the European Commission and the European Central Bank (ECB).
Luxembourg, 30 November 2022.
E. Coulon
H. Kanninen
Registrar
President
Table of contents
I. Background to the dispute
A. ESM Treaty
B. Financial difficulties of the Republic of Cyprus and request for financial assistance
C. Bank restructuring measures adopted by the Republic of Cyprus
D. Provision of financial assistance to the Republic of Cyprus
II. Forms of order sought
III. Law
A. The Court’s jurisdiction
1. The action in so far as it concerns acts of the Eurogroup
2. The imputability of the harmful measures to the defendants
(a) ‘Decision of the Governing Council of the ECB of 21 March 2013 to demand repayment of ELA on 26 March 2013 unless a rescue package is agreed’
(b) ‘[Decisions] to continue the granting of ELA’ allegedly adopted by the ECB
(c) Subsequent acts
(d) Conclusion as to whether the defendants are responsible for the adoption, maintenance or continued implementation of the harmful measures
3. The liability of the European Union for certain acts and conduct of the defendants
4. Conclusion on the Court’s jurisdiction
B. Admissibility
1. Compliance with formal requirements
2. The alleged failure to exhaust domestic remedies
C. Conclusion on the jurisdiction of the Court and on the admissibility of the application
D. Substance
1. The existence of a possible infringement of the right to property
(a) The first three harmful measures
(1) The nature of the review carried out by the Court of Justice in the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C8/15 P to C10/15 P)
(2) The evidence submitted by the applicants in the case leading to the judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C8/15 P to C10/15 P)
(3) Compliance with the requirement that any restriction of the right to property must be provided for by law and proportionate to the aim pursued
(i) The requirement that any restriction of the right to property must be provided for by law
(ii) The requirement that any restriction of the right to property must be proportionate to the objective pursued
– The suitability of the first three harmful measures to contribute to the achievement of the objective pursued
– The proportionality and necessity of the first three harmful measures
– The disadvantages caused by the first three harmful measures
(b) The sale of the Greek branches
(c) The alleged infringement of Article 14.4 of the ECB Statute, the right to sound administration and the requirements of consistency and fairness
2. The existence of a possible infringement of the principle of the protection of legitimate expectations
(a) The existence of a legitimate expectation derived from the letter of 11 February 2013
(b) The existence of legitimate expectations based on the treatment of MSCE that received financial assistance before the Republic of Cyprus
(c) The existence of legitimate expectations based on the fact that the ECB decided to authorise ELA for a prolonged period
(d) The existence of legitimate expectations based on the decision of 13 September 2012
3. The existence of a possible infringement of the principle of equal treatment
(a) The existence of discrimination against Laïki’s creditors whose claims originate in the ELA
(b) The existence of possible discrimination with regard to the holders of deposits in the Greek branches
(c) The existence of an infringement of the principle of equal treatment based on discrimination against depositors in the banks concerned whose deposits did not exceed EUR 100 000
(d) The existence of an infringement of the principle of equal treatment based on discrimination in relation to depositors of banks in other MSCE which received financial assistance before the Republic of Cyprus
E. Conclusions on the dismissal of the action
IV. Costs
*      Language of the case: English.
1 The list of other applicants is attached only to the version notified to the parties.