EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 8 March 2010 
on amendments to the legal framework on the e nhancement of liquidity of the economy in response 
to the impact of  the international financial crisis 
(CON/2010/21) 
 Introduction and legal basis
 
On 8 February 2010 the European Central Bank (ECB ) received a request from the Greek Ministry of 
Finance for an opinion on two sets of draft legisl ative provisions in relation to the Law on the 
enhancement of liquidity of the economy in response to  the impact of the international financial crisis 
(hereinafter the ‘draft provisions’). 
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 and the third and sixth indents of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consul tation of the European Central Bank by national 
authorities regarding draft legislative provisions1, as the draft provisions relate  to a national central bank 
and to rules applicable to financial institutions in sofar as they materially influence the stability of 
financial institutions and markets. In accordance with  the first sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, th e Governing Council has adopted this opinion. 
 1.  Purpose of the draft provisions 
1.1 The purpose of the first set of draft provisions is to extend to the fiscal year 2009 the restriction 
imposed by Article 28 of Law 3756/2009
2 in relation to dividend distri bution by banks participating 
in the liquidity enhancement scheme (hereinaft er the ‘scheme’) under Article 1 of Law 3723/20083. 
More specifically, under Article 1(3) of La w 3723/2008, the distribution of dividends to 
shareholders during the period of participation in the scheme may not exceed 35%, which is the 
minimum percentage provided for in Article 3(1) of Law 148/19674. Article 28 of Law 3756/2009 
further stipulates that the distribution of divi dends under Article 1(3) of Law 3723/2008 for the 
fiscal year 2008 is to be restricted to shares only; this restriction is now being extended to dividend 
distribution for the fiscal year 2009. 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  Law on the Dematerialised Securities System, the capital market, tax issues and other matters, FEK A53/31.3.2009. 
3  Law on the enhancement of liquidity of the economy in respons e to the impact of the intern ational financial crisis, FEK 
A 250/9.12.2008. 
4  Law on measures to enhance the capital market, FEK A 173. 
2 1.2 The second set of draft provisions aims at intr oducing arrangements in relation to the repurchase of 
preference shares acquired by the Greek State unde r the same Article 1 of Law 3723/2008, in order 
for the banks participating in the scheme to exit,  when the market and financial circumstances so 
allow, the recapitalisation part of the scheme. In particular, according to the second set of draft provisions, which replaces Article 1( 1) second subparagraph of Law 3723/2008
5, the preference 
shares are to be repurchased by the bank at the is sue price, five years after their acquisition or 
earlier, following approval by the Bank of Greece. After the expiry of the five-year period, if the General Assembly of the bank has not decided to  repurchase the shares, a cumulative increase in 
the price of 2% per year will be imposed in addition to the annual fixed rate of return that is due to 
the Greek State under Article 1(3) of Law 3723/2008
6, by a decision of the Minister of Finance, 
following a recommendation of the Bank of Greece. 
 
2. General observations 
In its Opinion CON/2008/797 the ECB expressed its views on the arrangements introduced by 
Law 3723/2008 to address the impact of the interna tional financial crisis. The ECB’s observations 
made on that occasion also apply, where relevant, to the changes proposed by the draft provisions. The ECB notes that both sets of draft provisions are broadly in line with the conclusions adopted at the Ecofin Council meeting of 7 October 2008, wh ich highlighted common principles to guide the 
action of Member States
8, and with the ‘Declaration on a concerted European action plan of the 
euro area countries’ issued on 12 October 2008 by the Heads of State of the euro area9, confirming 
their commitment to act together in a decisive and comprehensive way to restore confidence in and 
the proper functioning of the financial system, with  the aim of restoring a ppropriate and efficient 
financing conditions for the economy. 
 
3. Specific observations 
The ECB understands, as stated above, that the first set of draft provisions extends the restriction 
imposed by Article 28 of Law 3756/2009 to dividend distribution for the fiscal year 2009. Moreover, it understands that the second set of dr aft provisions removes the current obligation for 
banks participating in the scheme to repurchase th e preference shares within five years of their 
acquisition. At the same time, the second set of dr aft provisions introduces an incentive for banks to 
exit the recapitalisation scheme after the expiry of  the five-year period by imposing the cumulative 
                                                 
5  According to the current text, such preference shares must be repurchased by the bank at the issue price after five years 
or, optionally, earlier and in any case after 1 July  2009, following approval by the Bank of Greece. 
6  Under Article 1(3), the preference shares  carry the right to a fixed rate of return of 10% upon the contributed capital.  
7  Opinion of the European Central Bank of 27 November 2008  at the request of the Greek Ministry of Economy and 
Finance on a draft law on enhancing liquidity of the economy to address the impact of the international financial crisis 
and on a draft decision on its impl ementation. All ECB opinions are av ailable on the ECB’s website at 
www.ecb.europa.eu. 
8  See the press release of the 2894th Ecofin Council meeting (13784/08), available on the Council’s website at 
www.consilium.europa.eu. 
9  The Declaration is av ailable on the former French Pres idency’s website at www.ue2008.fr. 
3 increase described above. In this regard the ECB not es that the second set of draft provisions is in 
line with the recommendations of the Governi ng Council of the European Central Bank on the 
pricing of recapitalisations according to which terms should be set for the redemption of the 
instruments used for recapitalisations, either on the ba sis of a period of time or evolution of market 
conditions, so as to retain the temporary nature of  the State’s involvement and discourage financial 
institutions from maintaining such invol vement for an extensive period of time10.  
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 8 March 2010. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
 
 
                                                 
10  The recommendations were adopted in 2008 and are available on the ECB’s website at www.ecb.europa.eu .