EN ECB -PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
29 May 201 3 
on the Hellenic Financial Stability Fund  
(CON/2013 /38) 
 
Introduction and legal basis  
On 24 April  2013, the European Central Bank (ECB) received a request from the Greek Ministry of 
Finance for an opinion on certain draft legislative provisions amend ing the Law on the Hellenic Financial 
Stability Fund  (hereinafter the ‘HFSF Law’)1. The draft provisions were submitted to the Hellenic  
Parliament on 26 April 2013  and adopted on 28 April 20132. 
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
functioning of the European Union (TFEU)  and Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the E uropean Central Bank by national authori ties regarding draft 
legislative provisions3, as the draft provisions  relate to the representation of the ECB in the H ellenic 
Financial Stability Fund’s (HFSF) governing bodies and to the  strengthening of the  HFSF’s governance 
structure in view of its crucial role in the process of the recapitalisation and restructuring of the Greek 
banking sector . In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the 
European C entral B ank, the Governing Council has adopted this opinion.  
 
1.  Purpose of the draft provisions  
1.1 The draft provisions aim at implement ing the commitment s undertaken by the Greek government 
in the context of the second review of the second economic adjustment programme for Greece to 
(a) strengthen the HFSF’s govern ance structure ; (b) rationalise the division of  tasks between the 
HFSF’s General Council and Executive Board;  and (c) strengthen the HFSF ’s independence . 
1.2 The draft provisions , inter alia , alter the composition of the HFSF’s General Council by increasing 
its members from five to seven ; amend t he rules relating to  the competences of the HFSF’s General 
Council and Executive Board;  and enhance  the tasks of the HFSF’s Managing Director . 
Furthermore, the draft provisions  amend the rules relating to  the convoc ation of the meetings and 
                                                 
1  Law No 3864/2010 on the establishment of the Hellenic Financial Stability Fund, FEK A 119/21.07.2010.  
2  See Article 1 subparagraph D.3 of L aw 4152/2013 on urgent meas ures implementing  laws 4046/2012, 4093/2012 and 
4127/2013, FEK A 107/09.05.2013.  
3  OJ L 189, 3.7.1998, p. 42.  
ECB -PUBLIC  
2 the validity of the decisions of the HFSF’s General Council and Executive Board,  and to the  
quorum required for the m eetings of the HFSF's General Council . 
1.3 Finally, the draft provisions amend the rules relating to the represen tation of the ECB and the 
European Commission in the HFSF, by cla rifying that the ECB and  Commission  representatives  
may: (a) participate as observers in the committee selecting members of the  HFSF’s  General 
Council and Executive Board; and  (b) attend the meetings of the  HFSF’s  General Council and 
Executive Board as o bservers without voting rights . 
 
2.  Appropriate time to consult the ECB  
According to Article 4 of Decision 98/415/EC, the ECB must be consulted ‘at an appropriate sta ge’ in the 
legislative pro cess in order to afford the ECB sufficient time to adopt its opinion. In certain  cases, the 
consulting authority may  invoke reasons of extreme urgency and request that the ECB might adopt its 
opinion within a shorter time frame.  
In the present case, the co nsulting authority did not provide the ECB with a specific time frame within 
which to adopt its opinion. Furthermore, the draft provisions were adopted by the Greek Parliament 
within days  of requesting  the ECB’s opinion.  
The ECB stresses that even cases of  particular urgency do not relieve national authorities of their duty to 
consult the ECB at an appropriate stage in the legislative process and to allow sufficient time to take into 
account its views in accordance with Decision 98/415/EC. 
 
3. General observations  
The ECB welcomes the draft provisions, to the extent that they aim to amend the HFSF framework in line  
with the financial sector objectives outlined by the Greek authorities in the Memorandum of Economic 
and Financial Policies, as applicable from t ime to time4. In relation to the evolution of the 
abovementioned legal framework, the ECB refers the consulting authority to its previous , relevant 
opinions5. Without prejudice to this general observation, the ECB has the following specific observations.  
 4. HFSF ’s governance structure  
4.1 The ECB understands that the proposed amendments to the HFSF’s governance structure aim at 
clarifying the competences and responsibilities of the HFSF’s governing bodies and optimising the 
                                                 
4  Annex V to Law No 4046/2012 on the approval of the draft financing agreements between the European Financial 
Stability Fund, the Hellenic Republic and the Bank of Greece and of the draft Memorandum of Understanding bet ween 
the Hellenic Republic, the European Commission and the Bank of Greece and other provisions of utmost importance for 
reducing the public debt and saving the national economy (FEK A 28/14.12.2012) . 
5  See, in particular , Opinions CON/2010/54,  CON/2012/ 14, CON/2012/ 90 and CON/2013/17. All ECB opinions are 
published on the ECB’s website at www.ecb.europa.eu.  
ECB -PUBLIC  
3 HFSF’s operation in order to support it in its efforts for an ambitious and swift operational 
restructuring of all banks in which it has a significant stake.  
4.2 The ECB emphasises that the enhancement of the HFSF’s governance structure has been pursued 
since the agreement on the second economic adjustment programme for Greece in March 2012, on 
account of the very substantial amount of official financing that is be ing channelled to Greek banks 
through the  HFSF6. Moreover, the ECB notes that the Greek authorities have already , since the 
time of the agreement on the first economic adjustment programme for Greece in 2010, undertaken to ensure that the HFSF will be governed by private law, that it will enjoy administrative and 
financial independence , and that it will operate purely in accordance with private economic activity 
standards
7. 
4.3 The ECB considers that any amendment to the HFSF’s governance structure should take into 
consideration all the commitments undertaken by the Greek government under the economic 
adjustment programme  for Gree ce and aim at enabling the HFSF to pursue effectively its critical  
mandate , which is  to maintain the stability of the Greek banking system  and to minimise costs for 
the taxpayer. Against this background, the ECB considers that , although the draft provision s 
improve to some extent the HFSF’s operation, they do not contribute substantially to enhancing the 
independent and effective fulfilment of the HFSF’s mandate.  In particular, t he ECB welcomes the 
fact that the independence of the HFSF’s General Council is  enhanced by means of the addition of 
two independent  members. At the same time, the ECB  is of the view that the competences and 
responsibilit ies of the HFSF ’s governing bodies should be clarified further in order to facilitate 
more effective practical dec ision -making.  More specifically, t he ECB understands that , although 
the HFSF’s General Council has the status of  a supervisory body , it exercises significant  decision-
making powers upon proposal from the Executive Board8. The HFSF framework should ensure t hat 
the two governing bodies of the HFSF bear adequate responsibility for the HFSF’s decisions , that 
they cooperate efficiently , that the boundaries of their respective competences are clear, and that 
these boundaries are also reflected in the internal rul es of procedure of the HFSF . 
 
5. Representation of the ECB in the HFSF  
5.1 The ECB welcomes the draft provisions relating to the ECB’s representation in the HFSF, as these 
are broadly in line with the ECB representative’s mandate within the HFSF, which has  always been 
limited to that of an observer, without decision- making authority9. 
                                                 
6  The Second Economic Adjustment Programme for Greece  - March 2012’, European Economy -Occasional Pape rs, 94, 
p. 3. 
7  See, in particular , ECB opinion  CON/2010/54, paragraph 1.2.1.  See, also, Article 1 of Law 3864/2010.  
8  See Article 4(9) of the HFSF Law.  
9  See Opinion CON/2012/90, paragraph 8.  
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4 5.2 The ECB nevertheless wishes to reiterate its position that the provision in Article  4(13) of the 
HFSF Law entitling the ECB’s representative to request the  convocation of a meeting of the 
General Council should be deleted, given that this goes beyond mere observer status of the ECB 
representative10. 
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main, 29 May  2013.  
 
[signed]   
The President of the ECB  
Mario DRAGHI  
                                                 
10  See Opinion CON/2012/90, paragraph 8.