EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 30 December 2005 
at the request of the Estonian Parliament on a draft law amending the Eesti Pank Act 
(CON/2005/59)  
 1. On 7 November 2005 the European Central Bank (E CB) received a request from Riigikogu (the 
Estonian Parliament) for an opinion on a draft la w amending the Eesti Pank Act (hereinafter the 
‘draft law’). 
2. The ECB’s competence to deliver an opinion is based on the third indent of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consulta tion of the European Central Bank by national 
authorities regarding draft legislative provisions
1, as the draft law contains provisions concerning 
the national central bank. In accordance with the fi rst sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, the Eu ropean Central Bank has adopted this opinion. 
3. The ECB understands that the main objective of the dr aft law,which will enter into force at the date 
established by a decision of the Council of the Euro pean Union on the abrogation of the derogation 
of the Republic of Estonia pursuant to the procedur e provided by Article 122(2) of the Treaty, is to 
bring the Eesti Pank Act into line with the Tr eaty establishing the European Community and the 
Statute of the European System of Central Banks and of the European Central Bank. In the Convergence Report 2004
2, the ECB noted that Estonian law, a nd in particular the Eesti Pank Act, 
does not anticipate Eesti Pank’s legal integration into  the Eurosystem and therefore there is a need 
to adapt the law to comply with the require ments under Article 109 of the Treaty. In its 
Convergence Report the ECB also strongly recomme nded that, for reasons of legal certainty, a 
change should be made to Article 111 of the Estonian Constitution.  
4. The ECB generally welcomes the draft law and, in particular the adaptions which are made with a 
view to the future inclusion of Eesti Pank in the Eurosystem. However, the ECB would like to point out some provisions which still require some fu rther refinements. In this context it should be 
noted that Article 109 of the Treaty requires Member States to ensure that national legislation is compatible with the Treaty and the Statute; any incompatibilities must therefore be removed. The 
Treaty and the Statute do not prescribe the manner in  which national legislation must be adapted. 
Legislation may be adapted by making references to the Treaty and the Statute, by incorporating 
                                                     
 
1  OJ L 189, 3.7.1998, p. 42.  
2  Convergence Report 2004, p. 36. 
2 provisions thereof while referring to them, by deleting incompatibilities or by a combination of 
these methods. 
5. The ECB notes that Article 1 of the draft law states  that Eesti Pank is a member of the European 
System of Central Banks (ESCB). The ECB understands  that Eesti Pank, in performing the tasks of 
the ESCB, shall act in accordance with the guidelin es and instructions of the ECB. Therefore the 
ECB would welcome it if the reference to the legisla tion of the ECB in the draft Article 1(3) of the 
Eesti Pank Act were to be placed immediately after th e reference to the Statute, in order to reflect 
the hierarchy of legal acts.  
6. The ECB welcomes Article 2 of the draft law which st ates that Eesti Pank’s primary objective is to 
maintain price stability. The ECB notes that Eesti Pank’s other objectives have been amended so as 
to bring them into line with Community law. In this context, however, although the draft law already contains a general reference to the Treaty, the ECB would welcome a specific reference to Article 105(1) of the Treaty. This would reinforce the ECB’s understanding that compliance with the objectives under the draft Article 2(1) of the E esti Pank Act takes priority over compliance with 
the objectives under the draft Article 4(4) of the E esti Pank Act, which implies that support of the 
general economic policies of the Community takes priority over support of the economic policy of 
the Estonian Government. It is also noted that the list of Eesti Pank’s tasks still contains some 
imperfections: first, the wording of the draft Article 2(2)(2) does not follow the wording of Article 105(2) of the Treaty and the third indent of  Article 3(1) of the Statute; and second, in the 
light of the NCB’s functional independence, it is recommended that the draft Article 2(2)(8) of the 
Eesti Pank Act should also refer to Ar ticle 2(2) of the Eesti Pank Act.  
7. The ECB notes the improved wording of Article 3 of the draft law and welcomes the clear 
reference to the principle of central bank inde pendence. The ECB also welcomes the introduction 
of Article 16 of the draft law, which stipulat es that the holding and management of foreign 
exchange reserves shall be organised pursuant to la w, the Statute of Eesti Pank, and the guidelines 
of the Governing Council of the ECB. Similarly, Article 17 of the draft law on the preparation of the annual report brings the Eesti Pank Act into  line with Article 26.4 of the Statute.  
8. The ECB notes that according to Article 10(4) of the Eesti Pank Act, a Deputy Governor may 
deputise for the Governor in his absence. In this context, the ECB welcomes that the draft law now 
also provides for the independence of the Deputy Governors by establishing a term of office of five years and by extending the scope of Article 10(3) of the Eesti Pank Act to also include the Deputy 
Governors. The draft law does not make it clear whether Deputy Governors can be reappointed, 
and the ECB would welcome clarification of this point. The ECB would also welcome clarification 
of whether, under Article 10(4) of the Eesti Pa nk Act, the Supervisory Council may designate a 
substitute for the Governor only from among the Deputy Governors.  
9. Article 19 of the draft law states that the Deputy Go vernors who are in office on the date of entry 
into force of the draft law will each be deemed to have been appointed for a term of five years from 
3 that date. This regime raises some concerns with  regard to the stability of the governance system, 
as their terms of office will all expire at the sa me time. Under Article 50 of the Statute, the 
members of the ECB’s Executive Board were initia lly appointed for less than a full term, as a 
transitional measure. A similar provision concer ning the Deputy Governors would be welcome.  
10. The ECB notes that the draft law does not change Article 11(1) of the Eesti Pank Act. Under the 
first indent of Article 11(1) of the Eesti Pank Act, the Governor of Eesti Pank is exclusively 
responsible for, among other things, shaping mone tary and banking policies. This provision does 
not recognise the responsibilities of the ECB’ s decision-making bodies. It is therefore 
recommended that the words ‘monetary and’ s hould be deleted from the first indent of 
Article 11(1) of the Eesti Pank Act.  
11. The ECB notes that Article 12 of the draft law ame nds Article 14 of the Eesti Pank Act and sets out 
the rights of Eesti Pank in order to achieve the objectives stipulated in Article 2 of the Act. 
Although the list of rights largely complies with the Statute, the article would clearly benefit from references to the Statute, as the current wording fails to refer to the ECB’s competencies with 
regard to open market and credit operations, minimum reserves, clearing and payment systems, etc. Also, it would be preferable for the list of rights in Article 12 of the draft law to provide for implementing measures for the other instruments of monetary control referred to in Article 20 of 
the Statute.  
12. The ECB welcomes Article 13 of the draft law wh ich brings the Eesti Pank Act into line with 
Article 106 of the Treaty and Article 16 of the Statute. For the sake of clarity, it would be preferable to refer to banknotes and coins as ‘eur o banknotes and coins’ throughout the draft law.  
13. The ECB notes that Article 14 of the draft law re peals Article 15(5) of the Eesti Pank Act. The 
ECB understands that there will be no need to quot e the exchange rate of the Estonian kroon 
against foreign currencies, once the euro has b een introduced as the legal tender in Estonia.  
14. Article 18 of the draft law aims to bring the Eesti Pa nk Act into line with the Official Statistics Act. 
Against this background, the ECB notes that certain  obligations of NCBs relating to the collection 
of statistical information arise from Article 5.2 of the Statute, which is not referred to in the draft 
law. Therefore, the draft law should be am ended so as to refer to the Statute.  
15. There is one issue which was highlighted in the ECB’s Convergence Report 2004
3 which the draft 
law does not address. Namely, the seventh indent of  Article 9(2) in conjunction with Article 31(1) 
of the Eesti Pank Act, which provides that the Supervisory Board is to appoint independent 
auditors for Eesti Pank’s accounts, does not rec ognise the Community’s and ECB’s competence in 
this field under Article 27.1 of the Statute. Furthe rmore, the last sentence of Article 31(1) of the 
Eesti Pank Act does not recognise the powers of  Eesti Pank’s Supervisory Board nor the 
Community’s and ECB’s competence.  
                                                      
3  Convergence Report 2004, p. 221. 
4 16. This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 30 December 2005. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET