EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 22 December 2008 
at the request of the Slovenian Ministry of Finance  
on a draft decree laying down criteria and conditions for granting loans  
under Article 81.a of the Law on public finance 
(CON/2008/92) 
 
Introduction and legal basis  
On 16 December 2008 the European Central Bank (ECB) received a request from the Slovenian Ministry 
of Finance (hereinafter the ‘Ministry’) for an opinion on a draft decree laying down criteria and 
conditions for granting loans under Article 81.a of th e Law on public finance (hereinafter the ‘draft 
decree’). The draft Decree was adopted by the Slovenian Government on 18 December 2008. 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the sixth indent of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions1, as the draft decree relates to rules applic able to financial institutions insofar as 
they materially influence the stability of financial institutions and markets. In  accordance with the first 
sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council 
has adopted this opinion. 
 
1. Purpose of the draft Decree 
1.1 The legal basis for the adoption of the draft d ecree is the Law on public finance (hereinafter the 
‘Law’)2 which provides for four categories of meas ures for limiting the effects of the global 
financial crisis in Slovenia and maintaining the st ability of the domestic financial system. One of 
these measures is the provision of State loans to credit institutions and other financial companies. 
Article 88.a(1) of the Law requires the Governme nt to adopt separate d ecrees for each of these 
measures setting out the criteria, conditions  and charges for their implementation. 
1.2 Solvent credit institutions that hold a valid licence to provide banking services issued by Banka 
Slovenije and have their corporate seat in Slovenia are eligible for a State loan. State loans may be 
granted to those credit institutions which fulf il minimum capital requirements under the Law on 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  Law on public finance, published in Uradni list Republike Slovenije  No 79/1999.  
banking3 but which, due t o the effects of the glo bal financial crisi s, are not able, even with State  
guarantees, t o acquire funds in the financial and in terbank market s to finance t heir obligations and 
operating costs.  
1.3 Credit institutions must use the funds obtained th rough a State loan to enhance econom ic activities 
and ensure appropriate credit for the support of  the econo my and the populat ion. The Slo vene 
Export and D evelopment Bank (hereinafter the ‘S ID Bank’ ) is responsible for assessing whether a  
credit institut ion fulfils t he relevant conditi ons for obtaining a  State loan. Upon reaching an 
affirmative  decision, the S ID Bank advi ses the  Minis try to recommend that the  Govern ment adopt 
a decision granting the loa n. As the com petent s upervisor y autho rity, Banka Slovenije pro vides its 
assessment of the necessity and a ppropriateness of granting individua l loans to credit institutions  
and is notifie d by the Gov ernment of the adoption of any decision granting such  a loan.  
1.4 The decision to grant a loa n must set out the te rms and conditions of the loan agree ment as w ell as 
other commit ments a ccept ed by the beneficiary , e.g. restrictions on the income and other benefits  
of the co mpany’s management, including opti ons ov er the co mpany’s shares, and restrictions with 
respect to dividend payments and othe r shareholder rights. The maturity  of the loans may range 
from one y ear up to a maximum five  years and may not exceed the maturity  of the resourc es that 
the State acquires by  issuing debt secur ities on the fi nancial market or by  taking loans at the time of  
granting l oans. The annual  interest rate of the loan  consists of the  cost of b orrowing with th e State 
guarantee arising from  issuing deb t securities or fro m taking loans of com parable maturity and the  
credit risk margin based on a long-term  credit assess ment of the credit instituti on by interna tionall y 
recognised rating agencies. 
1.5 The draft decree is a tem porary measure and will onl y apply until 31 December 2 010. 
 
2. Gene ral observations 
2.1 The ECB was consulted b y the Ministr y on the draft d ecree on 16 D ecem ber 2008 and was asked to  
give priorit y to the consultation request as the pr essin g need to adopt the draft d ecree did not allow 
for a norm al consultation period. No specific d eadline for the ad option of the ECB opinion was 
indicated and the ECB was not notified of the advan ced status of the adoption procedure. The draft 
decree was then adopted on 18  December 2008 , without an y prior notificatio n of the ECB. The  
ECB reiterates the position which it has previous ly communicated t o the Sloveni an authorities4 that 
even cases o f particular urgenc y do not abrogate  the dut y of the national authorities unde r 
Article 105(4) of the Treaty  to consult  the E CB on national draft legislative provisions f alling 
within its fiel ds of co mpetence. In the  present case, the ECB  was consulted, but no ti me limit was 
set for the subm ission of the ECB’s opinio n and no notice was given that the law were to be 
                                                 
3  Law on b anking  published in Uradni list Republike Slo venije  No 1 31/2006.  
4  See par agraph  2.4 of ECB Opin ion CON/2008/76 of 25 Novemb er at the request of the Sloveni an Ministr y of Fin ance on  
a draf t law amending th e Law on  public fina nce, available on the ECB’s we bsite at www. ecb.europa. eu.
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adopted two days after the  request for an opi nion. The ECB has been flexible and able to  respond  
within extremely  short time li mits to consultati on requests r eceived during this y ear’s financial  
turm oil, but would have welco med being consu lted on the present Slovenian draft decree  at an 
earlier st age in order to ensure that the adopting authority woul d have had sufficient tim e to take 
the ECB’s considerations into account . It follows  from Article 3(4) of Decision 98/415/EC tha t 
once a consultation request has been submitted to the ECB, Mem ber States are o bliged to suspend 
the process o f adoption of draft legislati ve provisions , pending receipt of the E CB’s opinion or the 
expiry  of a ti me limit set  for the submission of the ECB opinion in accordance with Decision  
98/41 5/EC5. 
2.2 The draft decree w as ado pted on the basis of  the Law on which the ECB issued its Opinion 
CON/2008/7 6. The ECB is now consulted on legisla tion im plementing t he Law. Accordingly, the  
observations made in Opinion CON/200 8/76 also app ly to t he draft decree. 
 
3. Specific obse rvations 
3.1 Costs of State  loans impose d on receiving credit institutions 
 Pursuant to Article 9 of the draft decree, the am ount of the annual interest ra te for a loan is set by 
the Govern ment when granting the loan. This is  based on a pro posal by  the SID Bank and the  
Ministry  and  is calculated taking into  account the cost of borrowing with the State guarantee 
arising from  issuing debt securities or from  taking loans increased by  the cr edit risk margin. The 
latter is based on a long-term  credit assessm ent of the credit institution by  internati onall y 
recognised rating agencies. In additi on, the SID Ba nk charges an up-front fee of 25 basis poi nts for  
processing the State loan application. I n Opinion CON/2008/766, the ECB e mphasises that it is  
crucial to ensure the coord ination of the  pricin g of St ate measures under the La w within the euro 
area and the EU, given that a l evel play ing field is of the essence.  Such prices should be risk-based 
and market-o riented, and determ ined on the basis of  the costs of a correspondin g instrument in the 
market. In this respect, the ECB appre ciates the additional inf ormation provi ded in the A nnex to  
the draft decree7. 
3.2 Central bank involvement in the support measures 
The ECB un derstands that under t he draft decree, Ba nka Slovenij e is responsible for various  tasks 
related to the implem entati on of the measures. In particular, Banka Slovenije will be responsibl e for 
assessing the necessity  and appropriateness of gran ting a loan to a cr edit institution, indic ating 
whether the credit instituti on concerned is eligible for the loan under the Law and the draft decree 
                                                 
5  See Tit le IV, Se ction 1 of th e Guide to consul tation of the Euro pean Cen tral B ank by nationa l authorities r egardin g draft 
legislativ e provisions, availa ble on the ECB’s website at www. ecb.europa. eu. 
6  See par agraph  3.4 of Opinion  CON/2008/76. 
7  Concerning th e methodolog y for benchmarking the pricing , please also see the ‘C ommunication from the Commission -  
The r ecapitalisation of fin ancial institutions in the curren t financial crisis:  limitation of aid  to the minimum necessar y and 
safeguards again st undue d istortions of compet ition’ C(2008) 825 9 final of  5 December 2008. 
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and whether granting the loan is the most appr opriate measure to achieve the ai m of the La w8. In 
addition,  Banka Slovenije provides its o pinion  on the maturity  of the loan to be granted9. 
 In line with its previous opinions, the ECB re minds the Slovenian authorities that the  task s 
performed by Banka Slovenije m ust comply with the m onetary financing prohi bition under  
Article 101 of the Treaty  and Cou ncil Regulation (EC) No 3603/ 93 of 13 Decem ber 1993  
specify ing definitions f or the applicatio n of the pr ohibitions referred to i n Articles 104 an d 104b(1 ) 
of the Treaty10. Com pliance with the prohibit ion of monetary  financing i n relation to B anka 
Slovenije’s a ctivities under the draft decree will, inter alia , require appropriate  rem uneration of  
such activities. It is also e xpected  that tasks to be performed by  Banka Slovenij e for the ben efit of 
the State support measur es will be con ducted in a manner fully  com patible wit h Banka Slovenije’s  
institutional a nd financial i ndepende nce, which is a safeguard for the proper perf ormance of Banka 
Slovenije’s tasks under the  Treaty  and the Statute of the European  System  of Central Banks and o f 
the European Central Bank.  
 Moreover, th e ECB understands that the entire cost of the loans granted b y the Slovenian State is 
exclusively  financed fro m the State fun ds acqui red by additional State borro wing in acco rdance 
with Article 81.a of the Law. The ECB understands  that such additional State borrowing wi ll not 
include prefinancing or refinancing of the State budget b y Banka Slovenije, e.g. in the for m of 
extension of overdraft credit facilities by  Banka Slov enije to the Slovenian St ate or in the f orm of 
Banka Slovenije’s direct acquisition of  the Slo venian State’ s debt instrum ents. In this respect, the  
ECB reminds the Slovenian authorities that, under Article 101(1) of the Treaty , central banks are 
prohibited from  extending credit to, or purchasing de bt instrum ents directly  from , the public sector 
and/or Communit y instituti ons or bodies , i.e. debt  instruments issued in t he prim ary market. At the 
same ti me, debt instrument purchases made on the secondary market must not be used t o 
circu mvent the objective of Article 101(1) of the Treaty11. 
3.3 Exchange of confidential i nformation 
 Under the draft decree, B anka Slovenije is requi red to provide to the SID Bank an assess ment of 
the necessity  and appropriateness of granting i ndividual loans to credit institutions. Banka 
Slovenije, as the com petent supervisor y authorit y, has access to  confidential  inform ation about  
indivi dual credit instituti ons. It may  thus occur that  this inform ation  is disclosed to the SID Bank as  
part of Banka Slovenije’ s assessment. Given the se nsitive nature of supervisory  inform ation, the  
ECB reminds the Slovenian authorities of the im portance of safeguarding the confidentialit y and  
the need for a valid legal basis for any exchange of such inform ation. 
 
                                                 
8 See Arti cle 6 of the dr aft decree. 
9  See Arti cle 8 of the dr aft decree. 
10  OJ L 332, 31.12 .1993, p . 1. 
11  See recital 7 of  Council Regulation (EC) No  3603/93. 
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This opini on will be publis hed on t he ECB’s website.  
 
 
Done at Frankfurt am  Main, 22  Decem ber 2008. 
 
[signed ] 
 
The President of the ECB 
Jean-Claude TRICHET 
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