17.11.  75 Official  Journal  of the European  Communities No C 263/25 
Opinion  on the  proposal  for  a Council  Directive  on the  coordination  of laws, 
regulations  and  administrative  provisions  governing  the commencement  and  carrying 
on of the  business  of credit  institutions 
The text  referred  to the Committee  was  published  in Official  Journal  of the European 
Communities  No  C 12 of 17 January  1975,  page  7. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 6 January  1975,  the Council  referred  the abovementioned  proposal  to the Economic 
and Social  Committee  under  Article  198  of the  Treaty  establishing  the  European 
Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew 
held in Brussels  on 28 and  29 May  1975. 
The Opinion  is published  below. 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the referral  on 7 January  1975  by 
the Council  of the  European  Communities,  of the 
proposal  for a Council  Directive  on the coordination 
of laws,  regulations  and  administrative  provisions 
governing  the commencement  and  carrying  on of the 
business  of credit  institutions; 
Having  regard  to  Article  198  of  the  Treaty 
establishing  the European  Economic  Community; 
Having  regard  to the decision  taken  by its Bureau  on 
28 January  1975,  instructing  the Section  for Industry, 
Commerce,  Crafts  and  Services  to draw  up  an 
Opinion  and  a report  on the matter; 
Having  regard  to the  Opinion  adopted  by  the 
Section  for Industry,  Commerce,  Crafts  and  Services 
at its meeting  on 7 May  1975; 
Having  regard  to the  report  submitted  by  the 
Rapporteur,  Mr de Bruyn; 
Having  regard  to the  discussions  at its meeting  on 
28 May  1975  (130th  plenary  session  of 28 and 
29 May  1975), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
by a unanimous  vote: 
1. General  comments 
1.1. The  need  for harmonization 
1.1.1.  The  Committee  is aware  of the  pressing 
need  for  substantial  harmonization  of the  laws, up its Opinion  at its 130th  plenary  session, 
regulations  and  administrative  provisions  governing 
the commencement  and  carrying  on of the  business 
of credit  institutions.  Already,  any  national  of a 
Member  State  has  the  right,  under  the  Council 
Directive  of 28 June  1973  and  the judgments  of the 
Court  of Justice,  to set up in business  or to provide 
services  in any  other  Member  State  under  the same 
conditions  and  with  the  same  rights  as apply  to a 
national  of that  State;  he may  not  be subjected  to 
discriminatory  treatment  by comparison  with  that 
accorded  to nationals. 
1.1.2.  In  reality,  however,  creation  of a true 
common  market  for  credit  institutions  is hampered 
by the multiplicity  of widely  differing  and  complex 
provisions  governing  these  institutions  in the various 
Member  States. 
1.1.3.  This  situation  is at variance  with  the 
fundamental  aims  of the  Treaty:  it represents  an 
obstacle  to the  achievement  of economic  and 
monetary  union,  and  it is incompatible  with  the 
principle  of free  competition.  At  a time  when 
freedom  of establishment  and  freedom  to provide 
services  have  become  definite  rights,  not only  in the 
fields  covered  by the Directive  of 28 June  1973,  but 
perhaps  more  widely  by virtue  of the  judgments  of 
the Court  of Justice,  the  lack  of harmonization  of 
Member  States'  legislation,  whose  main  purpose  in 
each  country  is to provide  security  for  depositors 
and to protect  savings,  is liable  to create  serious 
disparities  with  regard  to this  objective,  indeed  even 
certain  dangers. 
No C 263/26 Official  Journal  of the  European  Communities 17.11.75 
1.2. The  procedure  adopted  by the Commission 
1.2.1.  The  Committee  notes  that  in view  of the 
difficulties  which  the  harmonization  involves,  the 
Commission  has decided  to proceed  with  it in stages. 
The Committee  regrets  that  the  proposal  submitted 
as the  first  stage  of the  operation  is not  more 
substantial  and  finds  it a pity  that  the Commission, 
as is recognized  in the  explanatory  memorandum, 
abandoned  the idea  of coordinating  all major  aspects 
of banking  legislation  in a single  directive. 
1.2.2.  The  Committee  would  therefore  urge  the 
Commission  to press  resolutely  ahead  until  the goal 
of harmonization  is achieved  by quickly  following 
this proposal  up  with  proposals  for  the  other 
directives. 
1.3. Definition  of the concept  of credit  institutions 
1.3.1.  The  aim  in view  calls  for  as wide  a 
definition  of credit  institutions  as possible.  The 
Committee  therefore  considers  that  the  definition 
proposed  is in principle  too narrow. 
1.3.2.  However,  the definition  is only  intended  to 
demarcate  the  field  of application  of this  first 
directive  and  not that  of all subsequent  directives  on 
the subject;  it therefore  in no way  anticipates  the 
provisions  which  will  lay  down  the  field  of 
application  of future  directives.  Therefore,  in view  of 
the procedure  adopted  by the Commission  and  the 
attitude  the  Committee  has  taken  towards  it, the 
Committee  is prepared  to agree  to the question  being 
left open  and  to accept  the  proposed  definition 
provisionally. 
1.3.3.  The  Committee  feels,  however,  that  the 
question  should  be reviewed  during  discussion  of the 
very next  directive. 
1.3.4.  The  Committee  considers  that  this  review 
must  result  in extension  of the  field  of application. 
Such  an extension  is all the more  justified  because  of 
the urgency  of harmonization,  since  it has  been 
precisely  the lack  of prior  harmonization  which  has 
prevented  the  liberalization  provided  for  by the 
Directive  of 28  June  1973  taking  effect.  The 
Directive  achieved  only  a very  partial  liberalization 
because  harmonization  had  not  been  carried  out 
beforehand.  Today,  however,  by  virtue  of the 
judgments  of the  Court  of Justice,  liberalization 
could  well  extend  further  than  is provided  for in the 
1973  Directive  and  apply  effectively  to areas  which  it 
was not throught  possible  to liberalize  in the absence 
of prior  harmonization.  The  judgments  of the Court 
of Justice  would  thus  mean  liberalization  of fields 
which  it was  not at the time  thought  possible,  chiefly because  of the dangers  involved,  to liberalize  before 
having  harmonized  the legislation  governing  them. 
1.3.5.  Finally,  since  in the Committee's  view  it is 
important  to  avoid  any  discrepancy  between 
directives  covering  the  same  business  activities,  the 
requested  review,  i.e.  extension,  of the  field  of 
application  should  be made  applicable  also  to the 
present  directive. 
1.4. Authorization  procedure 
1.4.1.  The  ultimate  aim  is to harmonize  the 
authorization  requirements  for  financial  institutions 
in all the Member  States. 
1.4.2.  It  is  therefore  regrettable  that  the 
Commission  has  distinctly  lowered  its  sights, 
confining  itself  to specifying  only  two  common 
authorization  criteria,  ,and  — contrary  to the  basic 
principle  of harmonization  — leaving  it to the 
Member  States  to lay down  the general  conditions  of 
authorization,  subject  to their  being  notified  to the 
Commission. 
1.4.3.  As  regards  the  nature  of the  authorization 
requirements  in the  various  Member  States,  the 
Committee  is disquieted  by the fact that some  of these 
requirements  could  be discretionary,  arbitrary  or 
discriminatory.  It urges  that  a complete  inventory  of 
such  requirements  be drawn  up and  that  steps  be 
taken  as a matter  of priority  towards  doing  away 
with  such  of them  as do not  represent  objective 
criteria  which  are known  beforehand  and  capable  of 
providing  a basis  for  the  joint  discussion  of 
applications  and  leading  to a reasoned  decision 
based  on these  criteria. 
1.5. Provisions  governing  the  establishment  of 
branches  in other  Member  States 
1.5.1.  It  is particularly  with  regard  to  the 
establishment  of branches  in other  Member  Sates 
that the deficiencies  of the procedure  adopted  by the 
Commission  are very  apparent.  A basic  feature  of a 
genuine  common  market  for credit  institutions  must 
be that  credit  institutions  can  carry  on business 
freely  in other  Member  States,  both  without 
establishment  or through  branches  established  freely 
in the  host  country.  Regarding  this  last  point,  the 
ultimate  aim  is, as is quite  rightly  stated  in one  of 
the recitals,  to introduce  'a system  whereby  branches 
of an undertaking  which  is established  in a Member 
State  will  throughout  the Community  be subject  to 
no authorization  requirement*. 
17. 11.75 Official  Journal  of the  European  Communities No C 263/27 
1.5.2.  The  absence  of  harmonization  of 
authorization  procedures,  as well  as of supervision" 
arrangements,  has led to a solution  being  adopted  in 
respect  of branches  in the  present  proposal  for  a 
Directive  which  bears  no  relation  at all  to the 
declared  aim.  The  Committee  of course  understands 
that without  fuller  harmonization  this  aim  is 
unattainable,  but  it would  take  this  opportunity  to 
reiterate  the  —  in  its  eyes  —  insufficiently 
substantial  character  of the proposed  Directive  and  to 
stress  the  need  to press  resolutely  ahead  with  this 
work. 
1.6. Creation  of a contact  committee 
1.6.1.  In  order  to expedite  and  facilitate  the 
harmonization,  the Commission  is to set up under  it 
a committee  composed  of  representatives  of 
supervisory  authorities  of each  Member  State. 
1.6.2.  The  Committee  fully  supports  the 
Commission  in its wish  to have  the  benefit  of the 
opinions  and  suggestions  of such  a committee, 
provided  — and  an analysis  of the text  shows  this  to 
be the  case  — that  the  Commission  retains  the 
exclusive  right  of initiative  and  decision-making 
assigned  to it by the Treaty. 
1.7. Conclusion 
1.7.1.  To  conclude  these  general  comments,  the 
Committee  would  say  that  bearing  in mind  the 
difficulties  involved  in  the  venture  and 
notwithstanding  the  criticisms  made  above  and  the 
specific  comments  to be made  below,  it is desirable 
that a step  forward,  however  limited,  be taken  right 
away.  It therefore  gives  its support  to the proposal. 
2. Specific  comments 
2.1. Article  1 
2.1.1.  It  emerged  from  a discussion  which  took 
place  on the  definition  of the  term  'branch'  that  a 
place  of business  which  only  receives  moneys 
without  granting  credits,  or vice-versa,  would  not  be 
excluded  from  the  field  of application  of the 
Directive. 
2.1.2.  The  Committee  therefore  proposes  that  the 
definition  be amended  to read: 
' "Branch"  means  a place  of business  which 
forms  a legally  dependent  part  of a credit 
institution  and  which  conducts  directly  any  of 
the operations  inherent  in the business  referred  to 
above.' 2.2. Article  2 (2) 
2.2.1.  It  is inconceivable  that  not  every  credit 
institution  covered  by the narrow  definition  given  in 
the proposed  Directive  should  be subject  to the 
Directive.  Apart  from  the  central  banks,  which 
participate  in monetary  management,  all the  other 
institutions  listed,  including  Post  Office  giro 
institutions,  should  be omitted  from  the text. 
2.2.2.  The  Committee  therefore  proposes  that 
Article  2 (2) be amended  to read: 
'2. It  does  not  apply  to the  central  banks  of 
Member  States.' 
2.3. Article  2(3 and  4) 
2.3.1.  It  is stated  that  Member  States  may  defer, 
for two  years,  the  application  of the  Directive  to 
certain  types  or groups  of credit  institutions;  such 
deferment  should  not be renewable. 
2.3.2.  The  Committee  therefore  proposes  that 
Article  2 (4) be amended  to read: 
'4. The  deferment  of  application  under 
paragraph  3 above  shall  be  motivated  and 
notified  to the Commission  by the Member  State 
in question.  Deferment  shall  be for a maximum 
period  of two  years.  It shall  take  effect  as from 
its publication  in the  Official  Journal  of the 
European  Communities,  which  shall  be effected 
not later  than  six months  following  notification 
of this  Directive.  It shall  cease  two  years  after 
that publication,  unless  the  Member  State  in 
question  notifies  the Commission  that  it is ending 
the deferment  of application  before  the expiry  of 
the two-year  period.' 
2.4. Article  3 (2), first  indent 
2.4.1.  It  emerges  from  the  commentary  on 
Article  3 (2) first  indent  and  Article  8 (1) (d) that  the 
term  'own  funds'  is to be understood  in a different 
sense  in each  case:  in the first  case  it refers  to the 
initial  capital,  in the  second  to 'operating  capital', 
i.e. the  permanent  stock  of funds  required  for  the 
general  running  of  the  business  of  a credit 
institution. 
2.4.2.  The  Committee  considers  that  it would  have 
been  better  to define  these  terms  and  specify  the 
relevant  amounts  in the present  proposal. 
2.4.3.  At  all  events,  to remove  the  ambiguity 
referred  to in 2.4.1  above,  the Committee  proposes 
that Article  3 (2) first  indent  be amended  to read: 
'— the  credit  institution  does  not  possess 
adequate  initial  capital.' 
No C 263/28 Official  Journal  of the European  Communities 17. 11. 75 
2.5. Article  3 (4) 
2.5.1.  In  line  with  the general  points  already  made 
under  1.4,  the  committee  set  up under  Article  11 
should  be  instructed  to  examine  also  all  the 
requirements  laid  down  by any  of the Member  States 
for authorization,  and  not  just  those  listed  by 
Article3(2). 
2.6. Article  4 (4), last sentence 
2.6.1.  Independently  of the comments  made  above 
(1.5)  about  the rules  governing  the establishment  of 
branches  in other  Member  States,  the  Committee 
considers  that  such  a provision  has  no place  in a 
directive  on the  coordination  of laws,  regulations 
and administrative  provisions  governing  the 
commencement  and  carrying  on of the  business  of 
credit  institutions.  It is discriminatory  in that  a 
Member  State  with  restrictive  rules  could  apply  those 
rules  to branches  of institutions  based  in another 
Member  State,  while  branches  of institutions  based 
in the former  Member  State  would  be able  to benefit 
from  the  more  liberal  rules  of that  other  Member 
State.  The  provision  in question  may  lead  to 
arbitrariness,  especially  if the  Member  State  with 
restrictive  rules  were  to  apply  authorization 
conditions  which  do not  conform  to the criteria  set 
out above  in item  1.4.  Therefore,  the  Committee 
calls  for deletion  of the last sentence  of Article  4 (4). 
2.7. Article  6 
2.7.1.  Subject  to the  general  comments  made 
above  and  the  specific  comments  below,  the 
Committee  feels  that,  in view  of the  procedure 
adopted  by the Commission  and  the  conclusion  the 
Committee  has  reached  about  it, Article  6 of the 
proposal  for a directive  has to be approved. 
2.7.2.  The  Committee  considers  that  a rigorous 
definition  of the various  accounting  elements  used  to 
compute  ratios  must  be laid  down  as a matter  of 
priority;  failing  this,  it will  never  be possible  to 
make  any  comparisons  whatever. 
2.7.3.  The  Committee  feels  that  in subsequent 
stages  it would  be appropriate  to set up a system  of 
common  ratios  fixed  exclusively  by directives,  but 
with  delegation  to the Commission  of the power  to 
fix the factors  and  the magnitude  of the said  ratios, 
after  consulting  the  committees  referred  to in 
Article  11 and the last paragraph  of the recitals. 2.7.4.  With  regard  to the provision  of Article  6 (2) 
requiring  three-monthly  notification  of the  ratios 
specified  in Article  6 (1),  the  Committee  considers 
that the  institutions  concerned  should  at least  be 
given  a reasonable  amount  of time  to collect  the 
data,  make  their  calculations  and  send  in the results 
to the competent  authorities. 
2.8. Article  7 (2) 
2.8.1.  It  emerged  from  the discussion  that  Article  7 
(2) does  not  imply  a limitation  on the  right  of 
Member  States  to supervise  branches  on the basis  of 
ratios  other  than  those  specified  in Article  6. 
2.9. Article  8 (1) (c) 
2.9.1.  Although  at the  present  stage  of progress 
towards  harmonization  it seems  impossible  to 
require  all  Member  States  to  abrogate  those 
conditions  of authorization  which  do not  conform 
rigorously  to the criteria  defined  above  under  1.4.3, 
the Directive  should  at least  completely  preclude 
withdrawal  of authorization  on the ground  that  such 
a non-conforming  condition  is no longer  fulfilled. 
2.10.  Article  9 (1) 
2.10.1.  The  Committee  proposes  that  Article  9 (1) 
be worded  to read: 
'Pending  more  intensive  coordination  of the 
laws,  regulations  and  administrative  provisions 
relating  to branches  of credit  institutions  having 
their  head  office  outside  the  Community, 
Member  States  shall  apply  to such  branches,  in 
respect  of the  commencement  or carrying  on of 
their  business,  provisions  which,  at the very  least, 
do not  result  in more  favourable  treatment  than 
that accorded  to branches  of credit  institutions  of 
Member  States.' 
2.11.  Article  9 (2) 
2.11.1.  It  is primarily  the Commission  which  the 
competent  authorities  should  notify  of branch 
authorization  applications  submitted  to them  by 
credit  institutions  having  their  head  office  outside 
the Community.  Furthermore,  the  Member  States 
should  be required  to inform  the Commission  of the 
action  taken  on such  applications,  and  in particular 
of the  conditions  under  which  any  authorizations 
have  been  granted. 
17.11.75 Official  Journal  of the  European  Communities No C 263/29 
2.12.  Article  9 (3) 
2.12.1.  Article  9 (1) already  allows  Member  States 
to treat  the branches  of institutions  based  outside  the 
Community  in the same  way  as those  of institutions 
of Member  States,  and  it is hard  to see  what  else 
could  be negotiated  in the interest  of Member  State 
institutions. 
2.12.2.  At  the very  least,  Article  9 (3) should  say 
'on the basis  of the principle  of reciprocity'  and  not 
use the  ambiguous  term  'having  regard  to the 
principle  of reciprocity'. 
2.13.  Article  11 
2.13.1.  In  line  with  the observations  under  1.6,  the 
Committee  considers  that  it would  be consistent  to 
give the  Commission  the  chair  of the  contact 
committee.  At  all  events,  the  stipulations  of 
Article  11 (2 and 3) on  the  representation  of the 
Commission  should  be  considered  the  strict 
minimum. 
2.13.2.  The  Committee  would  like  the committee 
referred  to in Article  11 to be composed  of top level 
officials  of the supervisory  authorities  in the Member 
States. 
2.13.3.  The  Committee  calls  for  early 
establishment  of the consultative  committee  referred 
to in the last recital  of the preamble  to the proposal. 
2.13.4.  The  abovementioned  committee  would 
play a consultative  role  in both  the  preparation  of 
decisions  and  the  framing  of their  implementing 
procedures;  here,  too,  the  Commission's  power  of 
decision  would  remain  absolutely  intact. 
2.13.5.  Liaison  between  the  consultative 
committee  and  the committee  set up under  Article  11 
would  be assured  by the Commission  which  could, 
where  it considered  this  useful,  arrange  for  a 
member  delegated  by one  or other  of the  two 
committees  to assist  it in this  task  or convene  a 
meeting  at which  the committees  would  concert  their 
views  on specific  matters. 
2.13.6.  In  consequence  of  the  foregoing  the 
Committee  proposes  that  the following  amendments 
be made  to the proposal  for a Directive: 2.13.6.1.  (Subsidiary  amendment,  in the  event  of 
the provision  for  renewal  of deferment  not  being 
deleted) 
Article  2(4),  second  sentence 
Replace  '...  the committee  referred  to in Article  11' 
by '...  the committees  referred  to in Articles  11 and 
11a'. 
2.13.6.2.  (Subsidiary  amendment,  for  the  same 
eventuality) 
Article  2 (4),  last  sentence 
Replace:  ..  the said  committee'  by '...  the said 
committees'. 
2.13.6.3.  Article  6 (4) 
Replace:  '...  the committee  provided  for  in 
Article  11'  by '...the  committees  provided  for  in 
Articles  11 and 11a'. 
2.13.6.4.  Add  an Article  11a reading  as follows: 
'Article  11a. 
1. There  shall  be  set  up  alongside  the 
Commission  an advisory  committee  representing 
the professional  circles  concerned. 
2. This  committee  shall  be consulted: 
(a) in the instances  specified  above; 
(b) on the  authorization  requirements  laid  down 
by the competent  authorities; 
(c) on the  establishment,  enlargement,  alteration 
or replacement  of all ratios; 
(d) on the methods  to be used  in calculating  all 
ratios  and  the  definitions  to be given  to the 
various  elements; 
(e) in connection  with  the  preparation  of new 
proposals  to lay before  the Council  on further 
coordination  in this  field. 
3. The  Commission  shall  be responsible  for 
implementation  of the  preceding  provisions.  It 
shall  take  appropriate  measures  to ensure  the 
necessary  liaison  between  this  committee  and  that 
referred  to in Article  11.' 
No C 263/30 Official  Journal  of the  European  Communities 17.11.  75 
2.14.  Article  12 
2.14.1.  The  Committee  endorses  the  solution 
adopted  by  Article  12  (3),  that  is to say  the 
stipulation  that  information  communicated  by  a 
competent  authority  is subject  to the  obligation  of 
professional  secrecy  laid  down  in respect  thereof  in 
the legislation  applicable  in the  country  of that 
authority,  unless  the  authority  gives  express 
authorization  in writing  to divulge  such  information and is empowered  to give  such  authorization  by its 
national  legislation. 
Done  at Brussels,  28 May  1975. 
The Chairman 
of the Economic  and  Social  Committee 
Henri  CANONGE 
Opinion  on the  Commission's  memorandum  to the  Council  entitled  Programmes  of 
research  and  development  actions  in the  field  of energy 
The text  referred  to the Committee  was  published  in Official  Journal  of the European 
Communities  No  C 54 of 6 March  1975,  page  26. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 30 January  1975,  the Council  referred  the abovementioned  memorandum  to the 
Economic  and  Social  Committee  under  Article  198  of the  Treaty  establishing  the 
European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  drew  up its Opinion  at its 130th  plenary  session, 
held in Brussels  on 28 and  29 May  1975. 
The Opinion  is published  below. 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to the referral  on 3 February  1975  by 
the Council  of the  European  Communities,  of the 
Commission's  memorandum  to the  Council  entitled 
Programmes  of research  and  development  actions  in 
the field  of energy; 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  198  thereof; 
Having  regard  to the decision  taken  by its Bureau  on 
28 January  1975,  instructing  the Section  for Energy 
and Nuclear  Questions  to draw  up an Opinion  and  a 
report  on the matter; 
Having  regard  to the  Opinion  adopted  by  the 
Section  for  Energy  and  Nuclear  Questions  at its 
meeting  held  on 12 May  1975; 
Having  regard  to the  report  submitted  by  the 
Rapporteur,  Mr Schlitt,  at this  meeting; Having  regard  to the discussions  at its meeting  on 28 
May  1975  (130th  plenary  session  of 28 and  29 May 
1975); 
Whereas  it is necessary  to develop  new  energy 
sources  and  new  forms  of energy  within  the 
framework  of a common  energy  policy; 
Whereas  a Community  research  and  development 
programme  must  play  a fundamental  role  in this 
context, 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
unanimously,  less  one abstention: 
1. General  comments 
1.1. In  its Communication  Energy  for  Europe: 
Research  and  Development,  the Commission,  as part 
of its long-term  energy  strategy,  identified  seven