EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 11 August 2005 
at the request of the Spanish Secretary of Stat e for the Economy on a draft royal decree on the 
arrangements for the payment of the Banc o de España’s profits to the Treasury 
(CON/2005/30) 
 1. On 26 July 2005, the European Central Bank (ECB)  received a request from the Spanish Secretary 
of State for the Economy for an opinion on a draft royal decree on arrangements for the payment of the Banco de España’s profits to the Treasury  (hereinafter the ‘draft royal decree’). 
2. The ECB’s competence to deliver an opinion is b ased on Article 105(4) of the Treaty establishing 
the European Community and on 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 provisions
1 as the draft royal decree concerns a national central bank (NCB). 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. 
3. The draft royal decree is based on the power gr anted to the Government by the second final 
provision of Law 12/1998 of 28 April amending the Law of Autonomy of the Banco de España to 
determine, by way of government regulation, the ru les for the payment of the Banco de España’s 
profits to the Spanish Treasury. 
4. The draft royal decree would replace Royal Decr ee 1080/2002 of 22 October which applied from 
the financial year 2002 until the financial year 2004. Royal Decree 1080/2002 in turn replaced Royal Decree 1746/1999 of 19 November, which a pplied until the financial year 2001. The 
provisional nature of these Royal Decrees was a pre caution triggered by the need to evaluate the 
application of Decision ECB/2001/16 of 6 December  2001 on the allocation of monetary income of 
the national central banks of participati ng Member States from the financial year 2002
2. 
5. Both Royal Decree 1746/1999 and Royal Decree 1080/2002 were the subject of consultation with 
the ECB. They established the same schedule for pa yment to the Treasury of profits accrued to the 
Banco de España and recorded by it, as follows:  
- In November of each year, 70% of the profits accrued and recorded by 30 September of the 
same financial year. 
                                                           
1  OJ L 189, 3.7.1998, p. 42. 
2  OJ L 337, 20.12.2001, p. 55. 
 
2 - In February of each year, 90% of the profits accrued and recorded by 31 December of the 
preceding financial year, discounting the instalment paid in November. 
- The remaining profits, following approval by the Government of the Banco de España’s 
accounts for the financial year. 
6. The ECB has already had the opportunity to comment on the rules for the distribution of the Banco 
de España’s profits to the Treasury in ECB Opinions CON/99/16 and CON/2002/143.  
7. The draft royal decree introduces two changes to th e current arrangements for the payment of the 
Banco de España’s profits to the Treasury, as fo llows: (i) the second payment of profits to the 
Treasury would be delayed from February to Ma rch; and (ii) profits could be excluded from 
payment to the Treasury upon authori sation by the Council of Ministers. 
8. The ECB notes that the deferral to March of the fo llowing financial year of the second payment of 
profits to the Treasury is a change of a purely technical nature that would nevertheless relieve 
operational pressures relating to closure of the Banco de España’s accounts.  
9. The ECB welcomes the amendment proposed by the draft royal decree to enable the Council of 
Ministers to authorise the exclusion from payment to  the Treasury of part of the Banco de España’s 
profits. In this respect, the ECB recalls that acco rding to the doctrine expressed by the European 
Monetary Institute (EMI) and the ECB in their co nvergence reports, the principle of financial 
independence of central banks requires that the ‘N CBs should be in a position to avail themselves 
of the appropriate means to ensure that th eir ESCB-related tasks can be properly fulfilled4.’ The 
NCBs must also, at all times, have sufficient fina ncial means to carry out their other functions, i.e. 
to perform their national tasks, to meet their international obligations and cover properly their 
administrative and operational expenses5. It should be noted that Article 28.1 and Article 30.4 of 
the Statute of the European System of Central Ba nks and of the European Central Bank provide for 
further calls on the NCBs to make further contri butions to the capital of the ECB and to make 
further transfer of foreign reserves. The prin ciple of financial independence requires that 
compliance with these provisions leaves an NCB’ s ability to perform its functions unimpaired6. 
Therefore, the ECB welcomes the flexibility afford ed by the draft royal decree which would allow 
the Banco de España to be able to  retain part of its profits, thereb y enabling it to build up financial 
reserves that should help to guarantee the availability  of appropriate independe nt financial means to 
meet its obligations. 
                                                           
3  ECB Opinion CON/99/16 of 28 October 1999 at the request of the Banco de España on a draft Royal Decree on the 
arrangements for the payment of the Banco de España’s  profits to the Treasury and ECB Opinion CON/2002/14 of 
25 April 2002 at the request of the Spanish Secretary of St ate for the Economy, Energy and Small and Medium-Sized 
Enterprises on a draft Royal Decree on the arrangements for the payment of the Banco de España’s profits to the 
Treasury. 
4  Page 295 of the EMI’s Convergence Report, March 1998. 
5  See Paragraph 6 of ECB Opinion CON/2003/22 of 15 October 2 003 at the request of the Finni sh Ministry of Finance on 
a draft government proposal to amend the S uomen Pankki Act and other related acts. 
6  See page 28 of the ECB’s Convergence Report 2004. 
 
3 10. The ECB notes that the draft royal decree establishe s no procedures in relation to the authorisation 
to retain part of the Banco de Es paña’s profits. In this respect, the ECB has expressed the view in a 
previous opinion that financial independence re quires that rules on the distribution of NCBs’ 
profits should not afford ad hoc discretion to third parties, and in particular to political authorities7. 
The ECB therefore welcomes the inclusion of a safe guard clause in Article 2(2) of the draft royal 
decree, which states that the rules laid down in th e draft royal decree ‘shall not limit in any way the 
appropriate performance of tasks attributed to the Banco de España within the European System of 
Central Banks.’ Nevertheless, the ECB suggests that  the provisions on the exclusion of part of the 
Banco de España’s profits from distribution to th e Spanish Treasury should be made more specific. 
It would, in particular, be appropriate if they establish the procedure leading to authorisation by the 
Council of Ministers, including the role of the Ba nco de España in initiating such procedure in 
order to create additional legal certainty and avoi d any exercise of discretion in this context. 
11. As stated by the ECB in its previous opinions on this matter, the proposed measures do not conflict 
with the current ECB regime for the issue of euro  banknotes and the allocation of monetary income 
of NCBs of the participating Member Stat es, established under Decision ECB/2001/15 of 
6 December 2001 on the issue of euro banknotes8 and Decision ECB/2001/16. 
12. Decision ECB/2001/16 lays down a transitional period fo r the allocation of monetary income to the 
NCBs, which lasts until the financial year 2007. Th e ECB notes that the dr aft royal decree will 
apply until 2007, in order to reflect th e duration of such transitional period. 
13. This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 11 August 2005. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                           
7  See page 29 of the ECB’s Convergence Report 2004 and Paragraph 6 of ECB Opinion CON/2002/14.  
8  OJ L 337, 20.12.2001, p. 52.