EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 25 November 2008 
at the request of the Slovenian Ministry of Finance  
on a draft law amending the Law on public finance 
(CON/2008/76) 
 Introduction and legal basis
 
On 3 November 2008 the European Central Bank (ECB) received a request from the Slovenian Ministry 
of Finance (hereinafter the ‘Ministry’) for an opi nion on a draft law amending the Law on public finance1 
(hereinafter the ‘draft law’ and the ‘Law’, r espectively), which was adopted on 11 November 2008 
(hereinafter the ‘adopted law’).  
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and on the sixth indent of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions
2, as the draft law relates to rules applicable  to financial institutions insofar as they 
materially influence the stability of financial ins titutions and markets. 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. 
 1.  Purpose of the draft law 
1.1 The draft law is aimed at limiting the effect s of the global financial crisis in Slovenia and 
maintaining the stability of the domestic financial system. During the financial crisis, the draft law 
allows for additional State borrowing and issuing of State guarantees beyond the extent laid down in the existing budget legislation
3, without a prior budget adjustme nt and adoption of a special law 
on guarantees or the amending of the existing amounts of State guarantees projected in the existing budget, respectively.  
1.2 The draft law provides for four categories of m easures: (i) loans to credit institutions, insurance 
companies, reinsurance companies and pension comp anies having their corporate seat in Slovenia; 
(ii) purchase of claims from credit institutions with  their seat in Slovenia; (iii) capital investments 
                                                 
1  Law on public finance, published in Uradni list Republike Slovenije  No 79/1999.  
2  OJ L 189, 3.7.1998, p. 42.  
3  See Articles 29 and 31 of the Law on the implementati on of the Republic of Slovenia Budget for 2008 and 2009, 
published in Uradni list Republike Slovenije  No 114/2007.  
2 by the State in credit institutions as well as in insurance companies, reinsurance companies and 
pension companies having their corporate seat in Slovenia; and (iv) State guarantees to credit institutions up to the total principal amount of EUR 8 billion, which was increased to 
EUR 12 billion in the adopted law. The criteria, conditions and charges for implementation of the 
abovementioned measures will be set out in separat e decrees to be adopted by the Government for 
each measure. 
1.3 The draft law provides for a general legal frame work allowing the State to address the emergency 
situation in the financial markets, should the need  arise. Detailed rules for the implementation of 
specific measures in individual cases, such as th eir content, extent, duration, as well as the 
designated beneficiaries, will be defined in a de cision to be adopted by the Government on the 
proposal of the Ministry. These decisions will be based on the assessm ent by the competent 
supervisory authorities on the need for and appropriateness of individual measures. The Government is obliged to inform the Parliame nt of any measures taken under the draft law. 
1.4 The provisions on measures introduced by the draft law will enter into force on the day after their 
publication and are of a temporary nature: they will apply until 31 December 2010. 
 2. General observations 
2.1 The ECB was consulted by the Ministry on th e draft law on 3 November 2008 and was asked to 
issue its opinion within one month after receivi ng the consultation request to enable the swift 
adoption of the draft law by the Slovenian Parliament. The ECB was not notified of any acceleration in the legislative procedure. Ho wever, the draft law was then adopted on 
11 November 2008, without any prior notification of the ECB. In fact, the ECB was unofficially 
informed that the consultation request would be supplemented with a revised draft law and a draft 
government decree governing State guarantees. The ECB would like to point out that, in cases of 
particular urgency, which do not allow for a nor mal consultation period, the consulting authority 
may indicate such urgency in the consultation request  and ask for a shorter deadline for adoption of 
the ECB’s opinion. This does not prejudice the na tional authorities’ duty under Article 105(4) of 
the Treaty to appropriately consult the ECB on natio nal draft legislative provisions falling within its 
fields of competence. It follows from Article 3( 4) of Decision 98/415/EC that Member States are 
obliged to suspend the process of adoption of th e draft legislative provision pending receipt of the 
ECB’s opinion. The adopting national authority should have the opportunity meaningfully to deliberate the ECB’s opinion prior to taking its d ecision on the substance. If a time limit has been 
set for submission of the ECB opinion and this time limit has expired, the national authority concerned may restart the adoption process
4. 
                                                 
4  See Guide to consultation of the European Central Bank by  national authorities regardi ng draft legislative provisions, 
Title IV, Section 1. 
3 2.2 The ECB has issued several recent opinions on Stat e measures taken to address the global financial 
crisis5, which all emphasise the importance of a common approach aimed at restoring confidence in 
financial markets. Similarly, the ECB notes that the conclusions adopted at the Ecofin meeting on 
7 October 2008 highlighted common principles to guide the States’ actions6. Moreover, the ECB 
notes that on 12 October 2008 the Heads of State of  the euro area issued a ‘Declaration on a 
concerted European action plan of the euro area countries’7 (hereinafter the ‘Declaration’), in which 
they confirmed their commitment to act together in  a decisive and comprehensive way in order to 
restore confidence and the proper functioning of the financial system and to restore appropriate and 
efficient financing conditions for the economy. Th ey agreed on common principles to be followed 
by the EU and euro area governments, central banks  and supervisors, to avoid national measures 
adversely affecting the functioning of the singl e market and the other Member States. This 
coordinated approach includes initiatives aimed at  ensuring appropriate liquidity, facilitating the 
funding of banks by various means, providing a dditional capital resources to financial institutions 
and recapitalising distressed banks. These principles were also endorsed for all Member States by 
                                                 
5  See ECB Opinions: CON/2008/44 of 3 October 2008 at the reque st of the Irish Minister for Finance on a draft Credit 
Institutions (Financial Support) Bill 2008; CON/2008/46 of 8 Oc tober 2008 at the request of the Belgian Ministry of 
Finance on a preliminary draft law on m easures promoting financia l stability and in particular establishing a State 
guarantee for the provision of credit in the context of fina ncial stability; CON/2008/48 of 15 October 2008 at the request 
of the Irish Minister for Finance on a draft Credit Inst itutions (Financial Support)  Scheme 2008; CON/2008/50 of 
17 October 2008 at the request of the Belgian Ministry of  Finance on a draft royal decree adopted under Article 117 bis of 
the Law of 2 August 2002 on the supervision of the financ ial sector and on financia l services; CON/2008/51 of 
17 October 2008 at the request of the Greek Ministry of  Economy and Finance on a draft law on, inter alia, the 
establishment of the ‘Depositors and Investors of  Credit Institutions Compensation Fund’; CON/2008/52 of 
17 October 2008 at the request of the Spanish State Secr etary for Economic Affairs on a Royal Decree-Law creating a 
Fund for the acquisition of financial assets and on a Royal Decree-Law adopting urgent financial and economic measures 
in relation to the concerted European action plan of the euro area countries; CON/2008/54 of 17 October 2008 at the 
request of the Danish Ministry of Ec onomic and Business Affairs on a proposed Law on financial stability; CON/2008/55 
of 20 October 2008 at the request of the Austrian Ministry of Finance on draft legal measures to ensure the stability of the 
Austrian financial market; CON/2008/56 of  21 October 2008 at the request of the Banque de France on a draft amending 
finance law for the financing of the economy; CON/2008/57 of 21  October 2008 at the request of the German Ministry of 
Finance on a Law on the implementation of a package of meas ures to stabilise the financial market and an order on its 
implementation; CON/2008/58 of 23 October 20 08 at the request of the Banca d’Italia  on behalf of the Italian Ministry 
for Economic Affairs and Finance on two Decree-Laws containing urgent measures  to guarantee the stability of the 
banking system and the continuity of the provision of credit; CON/2008/59 of 24 October 2008 at the request of the 
Swedish Ministry of Finance on a draft proposal on stabilis ing measures for the Swedish financial system; CON/2008/60 
of 27 October 2008 at the request of the Spanish State S ecretary for Economic Affairs on a draft Order implementing 
Royal Decree-Law 6/2008 cr eating the Fund for the acquisition of financial assets and on a draft Basic Agreement of the 
Fund’s Executive Council; CON/2008/61 of 28 October 2008 at the re quest of the Belgian Minister for Finance on a draft 
royal decree implementing the Law of 15  October 2008 on measures promoting fi nancial stability and in particular 
establishing a State guarantee for the provision of credit in th e context of financial stability, in relation to the protection  
of deposits and life insurance and amending the Law of 2 August 2002 on the supervision of the financial sector and on 
financial services; CON/2008/62 of 29 Oc tober 2008 at the request of the Swedish Ministry of Finance on a draft 
ordinance on State guarantees for banks et c.; CON/2008/65 of 12 November 2008 at the request of the Banca d’Italia on 
behalf of the Italian Ministry for Econom ic Affairs and Finance on a draft minist erial decree containing provisions to 
implement Decree-Law No 157/2008 on furthe r urgent measures to guarantee th e stability of the credit system; 
CON/2008/67 of 13 November 2008 at the request of the Span ish Ministry for Economic Affairs and Finance on a draft 
order implementing Royal Decree-Law 7/2008 authorising State guarantees; and CON/2008/68 of 13 November 2008 at 
the request of the Finnish Ministry of Finance on a dr aft government proposal for laws amending the Law on the 
Government Guarantee Fund and the Law on credit institutions. 
6  According to these principles, (i) inte rventions should be timely and the support should in principle be temporary; (ii) the 
interests of taxpayers should be protected; (iii) existing shareholders should bear the due consequences of the 
intervention; (iv) the Government should be in a position to bring about a change of management; (v) management 
should not retain undue benefits ; (vi) governments may have, inter alia , the power to intervene in remuneration; 
(vii) legitimate interest of competitors must be protected, in particular through the State aid rules, and (viii) negative 
spill-over effects should be avoided. 
7  Available on the website of the Fr ench Presidency at www.ue2008.fr. 
4 the European Council on 16 October 2008. As pointed out in these recent ECB opinions8, it is of 
utmost importance that the operations conducted by national authorities do not interfere by any 
means with the single monetary policy and/or w ith the Eurosystem’s refinancing operations. 
2.3 The ECB also wishes to underline the importa nce of ensuring that the proposed arrangements 
comply with the relevant Community law provisi ons and with criteria set out in the recently 
adopted Commission’s guidance on compliance by fi nancial sector support schemes with EU State 
aid rules9 (hereinafter the ‘Commission’s guidance’), a nd that the State’s role as shareholder as a 
consequence of recapitalisation under th e draft law is limited in time.  
2.4 The ECB understands that the Slovenian Governme nt intends to adopt decrees on the basis of the 
new Article 88.a(1) of the Law10 if it assesses that taking measures under the draft law may be 
necessary to address the situation in the Sloven ian financial market. The ECB expects to be 
consulted on any new draft legislative provisions sh ould they materially influence the stability of 
financial markets. 
 3. Specific observations 
Selection of beneficiary credit institutions 3.1 Pursuant to the new Article 81.a of the Law
11, all credit institutions as defined in the Law on 
banking12 having their corporate seat in Slovenia are entitled to benefit from the measures under the 
draft law. The ECB understands, therefore, that this comprises banks, savings banks and e-money 
institutions where the term ‘bank’ applies to any ba nk having its corporate seat in Slovenia that was 
licensed by Banka Slovenije to provide banking se rvices; subsidiaries of foreign banks are also 
included, but branches of foreign banks are not . The ECB welcomes the above provisions, as they 
avoid the preferential treatment of specified cr edit institutions, and the distortion of the level 
playing field as regards the treatment of domestic financial institutions and subsidiaries of foreign 
institutions13. The ECB notes that, in the specific cont ext of provision of State guarantees, the 
Commission’s guidance includes detailed rules on the eligibility criteria for the beneficiary 
institutions14. In this context, the ECB appreciates that  pursuant to the new Article 88.a(2) of the 
                                                 
8  See, in particular, ECB Opinions CON/2008/52 and CON/2008/60. 
9  See ‘Communication from the Commission – The application of St ate aid rules to measures ta ken in relation to financial 
institutions in the context of the current global financial crisis’ (2008/C 270/02) of 13 October 2008, available on the 
Commission’s website at www.ec.europa.eu. 
10  Inserted by Article 4 of the draft law. 
11  Inserted by Article 2 of the draft law. 
12  Law on banking, published in Uradni list Republike Slovenije  No 131/2006.  
13  On these aspects see, in particular, ECB Opin ions: CON/2008/44, CON/2008/48,  CON/2008/52 and CON/2008/55. 
14  See paragraph 18 of the Commission’s guida nce, specifying that ‘The eligibility criteria of financial institutions … must 
be objective, taking due acco unt of their role in the relevant banki ng system and the overall economy, and non-
discriminatory so as to avoid undue distortive effects on ne ighbouring markets and the intern al market as a whole. In 
application of the principle of non disc rimination on the grounds of nationality, all institutions incorporated in the 
Member State concerned, including subsidiaries, and with si gnificant activities in that Me mber State should be covered 
by the scheme’. 
5 Law15, the Government’s decisions on measures under the draft law must be based on the 
assessment of the need for and appropriateness of the individual measures provided by the 
supervisory authority.  
Relationship of the draft law to the single monetary policy of the euro area  
3.2 In line with the Declaration, Member States have  to act in a coordinated manner to avoid significant 
differences in national implementation having a co unter-productive effect and creating distortions 
in global banking markets. The euro area Heads of State also acknowledged the need to cooperate 
with the ECB to ensure consistency in liquidity  management by the Eurosystem and compatibility 
with the operational framework of the Eurosystem . Against this background, the ECB notes that 
uncoordinated decisions among Member States should be avoided as they may involve a 
fragmentation of the euro area money market.  
3.3 Pursuant to the new Article 86.a(4) of the Law16, State guarantees may be issued to cover all 
liabilities of credit institutions vis-à-vis credit ins titutions and other financial companies with the 
exception of liabilities arising from: (i) structured fi nancial instruments, (ii) subordinated liabilities 
of a credit institution and (iii) liabilities to the pa rent company and its associated entities. On this 
basis, the ECB understands that St ate guarantees may be issued to cover interbank deposits. This 
should be avoided as it could entail a substantial di stortion in the various national segments of the 
euro area money market by potentially increasing short-term debt issuance activity across Member 
States, thus impairing the implementation of the single monetary policy, which is an exclusive 
Eurosystem competence under Article 105(2) of the Treaty.  
3.4 Pursuant to the new Article 88.a(1) of the Law17, the criteria, conditions and charges for 
implementation of the measures under the new Articles 81.a and 86.a of the Law18 will be set out in 
separate decrees to be adopted by the Government  for each measure. The ECB would like to recall 
the need for its involvement in such concer tation and the importance it attaches to the 
harmonisation of the pricing of guarantees and other measures under the draft law within the euro area and the EU aimed at creating the essential conditions for a level playing field. In particular, it is important to ensure that the price of the Stat e guarantee is risk-based and market-oriented in that 
it is determined on the basis of the costs of a corresponding guarantee in the market. 
3.5 Article 6 of the adopted law provides that the provisions of Articles 2, 3 and 4 of the draft law 
apply until 31 December 2010. The ECB notes that th is provision is in line with the principles 
stated in the Declaration which point to the te mporary features of such schemes. Moreover, the 
harmonisation regarding the end date of such schemes across the euro area and EU Member States is also crucial and the ECB should be  involved in such concertation.  
                                                 
15  Inserted by Article 4 of the draft law. 
16  Inserted by Article 3 of the adopted law. 
17  Inserted by Article 4 of the adopted law. 
18  Inserted by Articles 2 and 3 of the adopted law respectively. 
6 Role of the central bank 
3.6 The ECB understands that Banka Slovenije in its  supervisory role will pr ovide its assessment under 
the new Article 88.a (2) of the Law19 with respect to banks, savings banks and e-money institutions.  
3.7 The ECB expects that the involvement of Banka Slovenije will not go beyond the supervisory 
function and, in particular, that it will fully comp ly with the prohibition on monetary financing laid 
down in Article 101 of the Treaty. According to the specific deposit guarantee scheme in Slovenia
20, Banka Slovenije pays in its name and on behalf of Slovenian banks and of the State the 
guaranteed deposits to depositors21. To address the current financial crisis this scheme was recently 
changed to introduce an unlimited State guarantee for bank deposits22. The ECB notes with concern 
that no legislative provision was envisaged in th e draft law with regard to additional State 
borrowing which would ensure that sufficient funds  are available to cover such potential amounts 
to be paid. Should the State not be able to tran sfer sufficient funds to Banka Slovenije, the latter 
may be put in a position where it has to provide , even if only temporarily, its own funds for 
financing the national deposit guarantee scheme23 which would be a clear breach of the monetary 
financing prohibition under the Treaty. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 25 November 2008. 
[signed] 
 
The Vice-President of the ECB 
Lucas D. PAPADEMOS 
                                                 
19  Inserted by Article 4 of the draft law. 
20  Articles 310 to 329 of the Law on banking. 
21  Pursuant to provisions of the Law on banking governing the deposit guarantee scheme in Sl ovenia, the banks having their 
corporate seat in Slovenia guarantee payment of guarant eed deposits held at a bank against which bankruptcy 
proceedings have been initiated. Upon the initiation of ba nkruptcy proceedings, Banka Slovenije assumes the obligation 
to pay the guaranteed deposits in its own name and on behalf of the banks. To cover this ob ligation it orders the banks to 
pay in their respective shares and forwards these funds to  the successor bank authorised to execute the payments of 
guaranteed deposits to the depositors. In the bankruptcy proceedings, Banka Slovenije l odges claims arising from the 
guaranteed deposits and returns any funds retrieved from the bankruptcy estate to the banks according to their paid-in 
shares. 
22  In the latest amendment to the Law on banking adopted on 11 November 2008, it wa s stipulated that the banks with their 
seat in Slovenia guarantee payment of guaranteed deposits of the bank in bankruptcy up to the amount of EUR 22 000 
and the State guarantees the exceeding amount without limitation (Articles 310 and 313 of the amended Law on 
banking).  
23  Upon the initiation of bankruptcy proceedings, Banka Slovenije  assumes the obligation to pay the guaranteed deposits of 
the bank in bankruptcy in its own name and on behalf of  the banks with their seat in Slovenia and of the State 
(Article 315 of the amended Law on banking).