EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 19 November 2008  
at the request of the Romanian Parliament 
on a legislative proposal regarding the use of Banca Na ţională a Rom âniei's foreign reserves for 
tourism development and modernisation 
(CON/2008/72) 
 
Introduction and legal basis  
On 10 October 2008 the European Central Ba nk (ECB) received a request from the Romanian 
Parliament’s Senate Commission for Budget, Finance,  Banking and Capital Markets for an opinion on a 
legislative proposal regarding the use of Banca Na ţională a României’s foreign reserves for tourism 
development and modernisation1 (hereinafter the ‘draft law’). 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the third indent of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 
on the consultation of the European Central Bank by  national authorities regarding draft legislative 
provisions2, as the draft law relates to Banca Na ţională a României (BNR). 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 law 
The draft law will allocate EUR 3 billion from Romania’s foreign reserves, managed by BNR, to 
set up the Fund for Development and Moderni sation of Tourism (hereinafter the ‘Fund’)
3. In return, 
BNR is to receive interest equal to the average capitalisation of the foreign reserves for the last 
three years4. Casa de Economii şi Consemna ţiuni C.E.C. - S.A. (CEC BANK – S.A.), a State-
owned undertaking operating as a ba nk, will manage the Fund. It will grant credit to eligible 
borrowers including tourist accommodation structures i.e. graded hotels or guest houses, tour operators and other public and private law en tities involved in the development of ecotourism
5. The 
                                                 
1  Draft law registered at the Roma nian Senate under L528/03.09.2008. 
2  OJ L 189, 3.7.1998, p. 42.  
3  See Article 1(1) of the draft law. 
4  See Article 2(1) of the draft law. 
5  See Article 3(1) of the draft law. 
2 credit may be granted for a maximum period of 20 years with a grace period of up to five years, 
except for the interest rate6. 
 2.  General observations 2.1 The draft law affects the manner in which BNR ma nages its foreign reserve holdings by requiring a 
part to be controlled by an outside body (CEC  BANK – S.A) and used as funding for the loans to 
the tourism sector. In this respect, the draft law is incompatible with th e requirement to ensure 
BNR’s independence under Article 108 of the Treat y, as well as with the prohibition on monetary 
financing specified in Article 101 of the Treaty.  For the above reasons, the ECB does not support 
the draft law. The ECB notes that  the Romanian Legislative Council and the Senate Commission 
for Economy, Industry and Services have also issu ed negative opinions on the draft law and have 
voiced concerns regarding its impact on BNR’s independence
7.   
2.2 The compatibility of a Member State’s national le gislation with the provisions of the Treaty and the 
Statute of the European System of Central Banks and of the European Central Bank (hereinafter the 
‘ESCB Statute’) on central bank independence and the prohibition on monetary financing must be 
ensured upon accession to the European Unio n. As already emphasised in the ECB’s 
2008 Convergence Report8 and in a previous ECB opinion concerning BNR9, the incompatibilities 
of the Romanian legislation with the Treaty and the ESCB Statute should have been addressed by 
1 January 2007, in line with Article 109 of the Tr eaty. However, instead of addressing the current 
incompatibilities, the draft law introduces new incompatibilities by limiting BNR’s independence 
and by breaching the prohibition on monetary financi ng. The draft law is, therefore, fundamentally 
incompatible with the Treaty’s provisions on economic and monetary union (EMU) and its 
enactment could trigger infringement proceedings before the Court of Justice of the European 
Communities.  
2.3 Moreover, the ECB would like to emphasise that , although Member States with a derogation do not 
yet participate in EMU, they have a legal duty to  adapt the statutes of their national central banks 
(NCBs) ‘to ensure compatibility with the Treaty and the Statute in respect of Eurosystem-related 
tasks’10. In this respect, any legislative reform shoul d aim to gradually achie ve consistency with 
Eurosystem standards. In this case, it should f acilitate the convergence of the Romanian legal 
framework, necessary for Romania to become a fu ll participant in EMU without the need for 
                                                 
6  See Article 6(1) of the draft law. 
7  Both opinions are availa ble on the Romanian  Senate’s websit e at www.senat.ro. 
8 See ECB Convergence Report,  May 2008, pp. 246 to 249, available on the ECB’s we bsite at www.ecb.europa.eu. 
9  See paragraph 2.1 of ECB Opinion CON/2008/31 of 21 July 2008 at the request of the Romanian Parliament on a 
legislative proposal amending Law 312/2004 on the Statute of Banca Na ţională a României. 
10  See ECB Convergence Report, May 2008, p. 26. 
3 subsequent legislative reforms11. In particular, Article 105(2) of the Treaty defines holding and 
management of the official foreign reserves of th e Member States as a basic task to be carried out 
through the ESCB. This Treaty provision entails that  the competence to take decisions on the use of 
an NCB’s assets remain with the NCB. The adoptio n of legislation that would impose a compulsory 
allocation of part of a Member State’s foreign reserves in contradiction with the assignment of this task to the NCB would be inconsistent with the Treaty, as it would deprive the NCB to that extent 
of one of its basic tasks under the Treaty and tr ansfer from the NCB to a third party a competence 
that the Treaty clearly assigns to the NCBs. 
 3. Specific observations  Central bank independence  
3.1. Article 108 of the Treaty, reinforced by Article 7 of the ESCB Statute, provides for the principle of 
independence of the centra l banks within the ESCB.  It ensures that the primary ESCB 
objective of price stability12 is served by fully independent central banks with a precisely defined 
mandate13. In particular, central bank independence cr ucially upholds credibility of the central 
bank’s monetary policy, which is a key cond ition for controlling inflationary expectations14. Also 
contributions which the ESCB provides to stability of the financial system15 are rooted in 
independent and credible standing of the ESCB central banks. Hence, in ensuring BNR’s 
participation in the ESCB in compliance with the applicable Community law provisions it is of 
utmost importance to design an institutional structure that guarantees BNR’s functional, 
institutional, personal a nd financial independence16.  
3.2 In particular, BNR’s financial independence w ould be jeopardised if it could not autonomously 
avail itself of sufficient financial resources to fulfil its mandate, the key element of which is the price stability objective. As noted in the ECB Convergence Reports
17, Member States may not put 
their NCBs in a position where they have insu fficient financial resources to carry out their 
functions. In this regard, NCBs must have suffici ent means not only to perform their ESCB-related 
tasks but also their own national tasks, e.g. fi nancing their administration and own operations, and 
covering their operational risks. The concept of  central bank independence should therefore be 
assessed from the perspective of whether any third part y is able to exercise influence, not only over 
                                                 
11  See, similarly, paragraph 3.4 of the ECB Opinion CON/ 2008/34 of 4 August 2008 at the request of the Swedish Ministry 
of Finance on a report concerning the fina ncial independence of Sveriges Riksbank. Nevertheless, statutory 
requirements relating to the full legal integration of an NCB into the Eurosy stem need only enter into force at 
the moment that full integration becomes effective, i.e.  the date on which the Member State with a derogation 
adopts the euro.  
12  See Article 105(1) of the Treaty and Article 2 of the ESCB Statute. 
13  See paragraph 2.1 of ECB Opinion CON/2007/14 of 24 May 2007 at the request of the Hungarian Ministry of Finance on 
a draft law amending the Law on the Magyar Nemzeti Bank. 
14  See paragraph 6 of ECB Opinion CON/2004/35 of 4 November 2004 at the request of the Hungarian Ministry of Finance 
on a draft law amending the Law on Magyar Nemzeti Bank. 
15  See Article 105(5) of the Treaty a nd Article 3.3 of the ESCB Statute. 
16  See paragraph 2.3 of ECB Opinion CON/2008/31. 
17  See ECB Convergence Report, December 2006, p.  27; ECB Convergence Report, May 2008, p. 20. 
4 performance of an NCB’ s tasks, but also over its ability to fulfil its mandate, understood both 
operationally in terms of manpower , and financially in terms of appropriate financial resources18.  
3.3 Under the draft law, part of BNR’s foreign reser ve holdings would be ta ken outside BNR’s control 
and management, and hence BNR would not have the possibility to hold and manage such part of 
the foreign reserve holdings in an independent ma nner. Such draft law provisions are incompatible 
with the principle of central bank financia l independence under Article 108 of the Treaty. 
 Compliance with the prohibition on monetary financing 3.4 Article 101 of the Treaty provides that ‘overdraft facilities or any other type of credit facilities with 
the ECB or with the central banks of the Memb er States … in favour of … central governments, 
regional, local or other public authorities, othe r bodies governed by public law, or public 
undertakings … shall be prohibited …’.Article 21. 1 of the ESCB Statute mirrors this provision. 
Council Regulation (EC) No 3603/93 of 13 De cember 1993 specifying definitions for the 
application of the prohibitions referred to in Articles 104 and 104b(1) of the Treaty
19 (now 
Articles 101 and 103(1) of the Treaty) further clarifies the precise scope of application of the monetary financing prohibition. It specifies that the prohibition under Article 101 of the Treaty includes any financing of the public sector ’s obligations vis-à-vis third parties
20. The 
abovementioned Community law provisions are therefore intended to prohibit NCBs from financing the public sector
21.  
3.5 The draft law provisions allocating a part of BNR’s foreign reserve holdings as a contribution to 
the Fund so that they can be invested in tourism development and modernisation, i.e. with the view 
to providing credit to a specified national economic sector, and hence accepting a commensurate level of market and credit risk, constitute a br each of the monetary financing prohibition under 
Article 101 of the Treaty. Such allocation of fore ign reserve holdings is not connected with any 
statutorily-defined BNR objectives or tasks. Noting that State support to the tourism sector is the 
declared purpose of the draft law
22, the draft law’s allocation of BNR’s foreign reserves needs to be 
considered as funding of credit facilities that would otherwise have to be financed at the State’s 
 
                                                 
18  See e.g. paragraph 9 of ECB Opinion CON/2004/16 of 11 May 2 004 at the request of the Italian Ministry of Economic 
Affairs and Finance on a draft law on the protection of savi ngs. See also paragraph 3.3 of ECB Opinion CON/2008/20 of 
21 May 2008 at the request of the Polish Minister for Financ e on a draft law amending the Law on trading in financial 
instruments and other legislation. 
19  OJ L 332, 31.12.1993, p. 1. 
20  See Article 1(1)(b)(ii) of Regulation (EC) No 3603/93. 
21  See paragraph 9 of ECB Opinion CON/2003/27 of 2 December 2003 at the request of the Austrian Federal Ministry of 
Finance on a draft Federal law on  the National Foundation for Research, Technology and Development. 
22  See fifth paragraph of the explanat ory memorandum to the draft law. 
5  
 expense, following normal budgetary procedures, i.e. financing of the public sector’s obligations 
vis-à-vis third parties, as prohibited by Regulation (EC) No 3603/93.  
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 19 November 2008. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET