EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 3 November  2022   
on the Slovenian scheme for the conversion into euro of hryvnia banknotes held by displaced 
persons from  Ukraine  
(CON/20 22/39) 
 
 
Introduction and legal basis  
On 16 September 2022 the European Central Bank (ECB) received a request from the National Assembly 
of the Republic of Slovenia for an opinion on a draft law on intervention measures for the comprehensive 
regulation of the situation of displaced persons from Ukraine and for as sistance to the Slovenian economy 
due to the consequences of the current crisis  in Ukraine (hereinafter the ‘draft law’) . 
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 the third  indent  of Article  2(1) of Council Decision 
98/415/EC1, as the draft law relates to Banka Slovenije.  In accordance with the first sentence of Article  17.5 
of the Rules of Procedure of the European Central Bank, the Gover ning Council has adopted this opinion.  
 
1. Purpose of the draft law  
1.1 The aim of the draft law is to mitigate the consequences of the humanitarian crisis resulting from the 
military invasion of  Ukraine and the associated mass influx into Slovenia of displaced persons from Ukraine. 
The draft law amends various national laws  concerning  the temporary protect ion of  displaced persons  and 
introduces  additional rights and protections for displaced persons in the fields of education, 
accommodation, health and social security. The draft law also aims to mitigate the consequences of the 
crisis in Ukraine for  the Slovenian economy , in particular  by facilitating the provision of convenient loans  to 
local compani es via the competent public fund . 
1.2 In consideration of  Council Recommendation 2022/C 166/012, the draft law provides for  the 
establishment of a national scheme enabling displaced persons  from Ukraine who are entitled to temporary 
protection (hereinafter ‘displaced persons  from Ukraine’)  to convert their  (Ukrainian)  hryvnia banknotes into 
euro.  Under the draft law, Banka Slovenije  is required  to set up and implement such a scheme3. For that 
purpose,  Banka Slovenije is to purchase hryvnia banknotes either directly from displaced persons  from 
Ukraine, or from the individual local banks and branches of banks  (hereinafter the ‘banks’)  that agree to  
 
1  Council Decision 98/415/EC of 29  June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions ( OJ L 189, 3.7.1998, p. 42). 
2  Council Recommendation 2022/C 166/01 of 19 April 2022 on the conversion of hryvnia banknotes into the currency of 
the host Member States for the benefit of displaced persons from Ukraine ( OJ C 166, 20.4.2022, p. 1) . 
3  See Article 57 of the draft law . 
ECB -PUBLIC  
2 exchange  hryvnia banknotes for such  displaced persons . In the latter case, Banka Slovenije and those 
banks  are to enter into an agreement whereby the banks undertake to conduct the currency exchange 
transactions with the displaced persons  from Ukraine  and Banka Slovenije undertakes to buy the hryvnia 
banknotes from the banks.  The agreement is to provide that: (a) the banks may exchange banknotes up to 
the limit of 10 000 hryvnia per displaced person;  (b) the rate to be used in currency exchange transactions  
is to be the official exchange rate published by the N ational Bank of U kraine,  or the exchange rate agreed 
between Banka Slovenije and the N ational Bank of U kraine ; (c) the currency exchange transactions are to 
be free of commission and other charges ; (d) the identity of displaced persons  from Ukraine is  to be verified  
in the manner agreed between the parties , in order to ensure compliance with the exchange limit  of 10 000 
hryvnia per displaced person;  and (e) the currency exchange transactions  of hryvnia for euro are to be 
carried out during the period of three months following  the conclusion of the agreement  between Banka 
Slovenije and the banks . The Slovenian g overnment may extend this period for a further three months.  
1.3 Under the draft law , Banka Slovenije is also to conclude an agreement with the National Bank of 
Ukraine,  or another central bank , for the purchase by  the National Bank of Ukraine or such other central 
bank  from Banka Slovenije , of the hryvnia banknotes obtained in the course of the implementation of the 
national scheme for their conversion  into euro4.  
 
2. General observations  
2.1 The establishment  and implementation of a national scheme to facilitate the conversion into euro of 
hryvnia banknotes by displaced persons from Ukraine entitled to temporary protection or adequate 
protection  under national law , such as the scheme provided for in the draft l aw, does not constitute a task 
incumbent on the European System of Central Banks . The provisions of the draft law regarding the national 
scheme enabling displaced persons  from Ukraine in Slovenia  to convert their  Ukrainian banknotes into euro 
implement  the protection measure laid down in  Council Recommendation 2022/C 166/01 which was 
adopted on the basis of Article 78(2)(c) TFEU  and the competences of the Union in the field of asylum, with 
a view to offering appro priate protection to war refugees.  
2.2 Where the legislature of a Member State chooses  to assign the implementation of the protection 
measure laid down in Council Recommendation 2022/C 166/01 to its  national central bank (NCB)  in 
accordance with Article 14.4 of the Statute of the E uropean System of C entral Banks  and of the E uropean 
Central Bank, that function is performed on the responsibility and liability of that NCB. N evertheless, when 
defining the responsibility and liability  of NCBs  in relation to the implementation of such a measure, Member 
States are required to comply with the ir oblig ations that deriv e from Union law  and, in particular,  Article 
123(1) TFEU5.   
 
3. Prohibition of monetary financing  
3.1 Article 123(1) TFEU  prohibits the NCBs from granting overdraft facilities or any other type of credit 
facility to public authorities and bodies of the Member States . Article 1(1)(b) of Council Regulation No 
 
4  See Article 57 of the draft law . 
5  See, to that effect, Judgment of the Court of Justice of 13 September 2022,  Banka Slovenije , C-45/21, EU:C:2022:670, 
paragraph 57 . 
ECB -PUBLIC  
3 3603/936 defines the term ‘other type of credit facility’  for the purposes of Article 123 TFEU  as meaning , 
amongst others,  any financing of the public sector’s obligations vis -à-vis third parties . Accordingly , for the 
draft law to be compatible with Article 123(1) TFEU, Banka Slovenije must not  assume obligations  vis-à-
vis third parties  which could be incumbent on the public sector . This means not only that Banka Slovenije 
must not assume pre-existing obligations  vis-à-vis third parties incumbent on other public authorities , but 
also that  the effective financing of the obligations vis -à-vis third parties by Banka Slovenije must not result 
directly from the measures adopted by, or  from the policy choices made by, other public authorities7. 
3.2 Under the draft law, Banka Slovenije is to purchas e, from its own funds,  hryvnia banknotes either 
directly from displaced persons  from Ukraine  or from banks  which have acquired  hryvnia banknotes from 
such persons. The financial obligations attached to the purchase of hryvnia banknotes are inherent in the 
implementation of the protection measure consisting of the national scheme for the conversion of hryvnia 
banknotes  into euro,  with which Banka Slovenije is  entrusted, and do not arise from the specific choices 
that Banka Slovenije would make in that  context or  the manner  in which it carri es out the task assigned to 
it. It follows , therefore,  that the effective financing by Banka Slovenije of the obligations vis -à-vis displaced 
persons from Ukraine result s directly from the protection measure and from the policy choices made by the 
Slovenian legislature. Consequently,  the draft law is not compatible with Article 123(1) TFEU , as it requires  
Banka Sl ovenije to assume obligations  vis-à-vis third parties  incumbent on the public sector . To ensure 
compatibility with the prohibition of monetary financing, the draft law should be amended to ensure that the 
purchase of hryvnia banknotes  is financed from budgetary resources, and not from Banka Slovenije’s own 
funds . 
 
4. Practical implementation of the draft law  
4.1 In addition to the above observations, t he ECB understands that  in the current circumstances the 
National Bank of Ukraine does not intend to enter into new agreements with foreign central banks for the 
exchange of hryvnia banknotes obtained from war refugees , beyond those agreements that it has already 
concluded with certain foreign central banks . This stance seems  highly relevant to the practical 
implementation of the draft law, which provides  that Banka Slovenije is to conclude an agreement with the 
National Bank of Ukraine,  or another central bank , which would then purchase the hryvnia banknotes 
obtained by Banka Slovenije  in the course of the implementation of the national scheme for their conversion 
into euro.  The impact that the National Bank of Ukraine’s current stance on new agreements with foreign 
central banks has on the implementation of the national conversion scheme should therefore be considered 
by the Slovenian legislator .    
 
 
 
 
 
6  Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions 
referred to in Article [123 TFEU] and [Article 125(1) TFEU] ( OJ L 332, 31.12.1993, p. 1).  
7 See, to that effect, Judgment of the Court of Justice of 13 September 2022, Banka Slovenije , C-45/21, EU:C:2022:670, 
paragraphs  67 to 75  and 84 . 
ECB -PUBLIC  
4 This opinion will b e published on EUR -Lex.  
 
 
Done at Frankfurt am Main, 3 November 2022.  
 [signed]  
 
The President of the ECB  
Christine  LAGARDE