EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 22 November  2021  
on the designation of the Central Bank of Cyprus as an Emergency Civil Planning Agency  
(CON/20 21/35) 
 
Introduction and legal basis  
On 30 September 2021 the European Central Bank (ECB) received a request from the Minister for  Defence 
of the Republic of Cyprus for an opinion on a draft decree on the designation of the Central Bank of Cyprus 
(CBC) as an Emergency Civil Planning Agency (ECPA) of 20211 (hereinafter the ‘draft decree’) .  
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 indent of Article  2(1) of Council Decision 98/415/EC2, as 
the draft decree relates to the CBC.  In acc ordance 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 decree  
1.1 The draft decree designates the CBC as an Emergency Civil Planning Agency (ECPA) and calls on 
the Governor of the CBC to draw up, in consultation with the Minister for Defence or the Central 
Emergency Civil Planning  Authority  (CECPA) , a detailed emergency plan in accordance with the 
principles to be included in the general emergency civil planning strategy.  
1.2 The explanatory memorandum submitted by the Ministry of Defence states that the main purpose 
of the draft decree is to enable the CBC to develop the nec essary mechanisms for  the smooth 
continuation of its operational functions if  the Republic of Cyprus declares  a state of emergency , 
thus enabling the Republic both to continue carry ing out, through the CBC, its domestic and foreign 
payments, and to maintain or increase its defence capabilities. In addition, in order for the CBC to 
effectively comply with its legal obligations, it will have to examine the procedures regarding the 
carrying out of critical transacti ons3 or payments, as well as the safeguarding of its own assets and 
subsequently the assets of the Republic of Cyprus.  
1.3 The draft decree is to be read together with the relevant legislation currently in force, comprising 
the Law on Emergency Civil Planning of 20004 (hereinafter the ‘Law’) and the Regulations on 
 
1  Το περί της Κεντρικής Τράπεζας της Κύπρου, ως Υπηρεσίας Πολιτικής Σχεδίασης Εκτάκτων Αναγκών (ΥΠΣΕΑ) 
Διάταγμα του 2021.  
2  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).  
3  These are not specified in the explanatory memorandum or draft decree.  
4  Ο περί Πολιτικής Σχεδίασης Έκτακτων Αναγκών Νόμος του 2000 (Ν. 44(I)/2000).  
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2 Emergency Civil Planning (General) of 20115 (hereinafter the ‘Regulations’) .  
1.4 According to the Law, the Council of Ministers must take all measures it deems appropriate from 
time to time for the purpose of strengthening the defence capacity of the Republic of Cyprus in the 
face of any hostile actions against it. The Council of Ministers is also granted the power to proclaim, 
by issuing a decree,  any ministry or independent service of the Republic, or any department or 
agency thereof, and any public or private law body, or any department or agency thereof, as an 
ECPA, and to call on the relevant minister, director, supervisor or manager, as  the case may be, in 
consultation with the Minister for Defence or the CECPA, to draw up a detailed emergency plan and 
to undertake the organisation, self -protection and training of the staff of that ECPA in order to be 
able to apply the plan in a state of  emergency. The Law further provides that , notwithstanding the 
provisions of any other law or regulation or employment contract relating to the terms of service of 
employees, the staff members of any ECPA and the ir employers, supervisors or directors must 
comply with the provisions of the decree issued by the Minist er for Defence.  
1.5 The Law defines ‘state of emergency’ as a state declared by the Council of Ministers in the event 
of war or the threat of war in line with  Article 183(1)  the Constitution  of the R epublic of Cyprus . 
According to the latter, in the event of war or any other public danger threatening the existence  of 
the Republic or any part thereof, the Council of Ministers has the power, by a decision taken in this 
respect, to declare a state  of emergency , subject to the right of veto against any such decision that 
may be exercised, jointly or severally,  by the President and the Vice- President of the Republic within 
forty-eight hours of the date of th at decision .  
1.6 In addition, the Law provides that the Minister  for Defence must prepare and submit to the Council 
of Ministers for approval a general plan for emergency planning, the purpose of which is to define 
the basic principles on the basis of which the detailed emergency plans of the ECPAs are drawn 
up regarding:  (a) their organisation and training in peacetime; and (b) their action and self -protection 
in a period in which there is a valid state of emergenc y. 
1.7 Any violation or non- compliance with any provision of a regulation, decree or directive issued under 
the Law is an offenc e punishable by imprisonment of not more than six months or a fine not 
exceeding five hundred pounds or both.  
1.8 The Regulations set out  the details regarding the establishment, operation and staffing of the 
ECPAs  and are applicable to all ECPAs and their personnel . The Regulations grant the Minister  for 
Defence , by way of  issuing instructions,  the power to exercise general oversight and control over 
the ECPAs and the duty of coordinating and providing the ECPAs with guidance when regulating  
any matters that need clarification regarding the implementation of the Law and Regulations and 
the relev ant decisions of the Council of Ministers. The Minister f or Defence may also monitor 
whether the ECPAs : (a) have taken all necessary measures for their organisation, staffing, 
preparation and readiness, as well as the training of their staff, for the purpose of  carry ing out their 
mission ; (b) have created and operate suitable and equipped infrastructures ; (c) coordinate and 
cooperate with the CECPA;  and (d) are supplied  with, store and maintain the necessary materials, 
supplies and other means  required to implement  their emergency plans.  
 
5  Οι περί Πολιτικής Σχεδίασης Έκτακτων Αναγκών (Γενικοί) Κανονισμοί του 2011.  
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3 1.9 Moreover , each ECPA must:  (a) comply with the instructions issued by the Minister f or Defence;  (b) 
prepare an emergency plan in consultation with the CECPA , within six months of its designation as 
an ECPA;  (c) take any measure it deems expedient or necessary to implement  the provisions of 
the Law and Regulations, the relevant instructions of the Minister  for Defence and its emergency 
plan. This includ es measures on: ( i) its organisation, staffing, preparation and readiness; ( ii) the 
training of its staff; and ( iii) securing the means, supplies, materials or resources necessary to 
accomplish its mission; ( d) participate, when requested, in emergency planning exercises as 
designated by the Minister  for Defence ; and (e) notify the  CECPA of any change in the official status 
of any member of its staff in its employment, as well as of any change in the means and material 
resources at its disposal, provided that the implementation of its emergency  plan is d irectly or 
indirectly affected, and immediately take appropriate measures, including modifying or revising that 
plan, in cooperation with the CECPA.  
1.10 The Regulations further provide that each EC PA must establish a dedicated department which will 
be responsible for coordinating the work  and fulfilling  the assignments  of the ECPA in a state of 
emergency. The head of the department is given a number of responsibilities, including submitting  
to the manager of the ECPA  any measures deemed necessary to better implement , inter alia,  the 
Law, the Regulations, the general civil emergency and the specific  emergency  plans  and the 
maintenance of a registry listing the personnel of the ECPA  and any other releva nt information.  
1.11 The ECPA ’s personnel  comprises  staff members of the ECPA, as well as any other individuals  
called into service or for training by the Minister for the  Interior,  such as National Guard reservists 
or individuals with a reserve duty to the Civil Defence , or other s deemed suitable on the basis of  
their specialised education, skills or experience. The ECPA ’s personnel  is obliged, inter alia : (a) to 
comply with the provisions of the Law, the Regulations and the instructions issued thereunder, as 
well as their obligations stemming from the applicable emergency plan;  (b) to maintain professional 
secrecy;  (c) to notify the dedicated department of any temporary or permanent change to their 
residence ; and ( d) to carry  with them any device or equipment given to them for the exercise of their 
duties and not to give access to them to any other person. In the event of a declaration by the 
Cypriot government of a state of emergency, the ECPA’s personnel  may be called in to service by 
the Minister  for the Interior , following the approval of the Council of Ministers.  The regular 
employment of any person called into service or  for training is suspended for the duration of the 
service or training.  
1.12 In addition, the dependent s of any member of the ECPA ’s personnel  who dies during training or 
service , and any member of ECPA ’s personnel  who becomes i ncapable of performing their 
employme nt due to an injury or illness caused while performing their  service or training,  are entitled 
to compensation. The members of the ECPA ’s personnel  are also not to be held liable for any 
damage caused by any action or omission during the exercise of their duties , provided that such 
damage was reasonably necessary for the exercise of their duties, except in the event of negligence 
or fault on their part . 
 
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4 2. General observations  
2.1 As previously noted by t he ECB6, under the Treaty the Union has exclusive competence in the area 
of monetary policy for Member States whose currency is the euro7. Therefore, a Member State 
whose currency is the euro transfer s to the Union its powers  in the area of monetary policy and the 
tasks of the Eur opean System of Central Banks (ESCB)  enumerated in the Treaty and the Statute 
of the European System of Central Banks and of the European Central Bank (hereinafter the 
‘Statute of the ESCB’). In these fields, Member States whose currency is the euro may no t adopt 
unilateral measures as it is for the decision -making bodies of the ECB alone to take the measures 
necessary to ensure the performance of the tasks entrusted to the ESCB under the Treaty and the 
Statute of the ESCB8, including contingency planning with respect to the continued performance of 
these tasks.  Furthermore, when exercising their powers and carrying out their ESCB tasks, t he ECB 
and the national central banks (NCBs) act independently , which means that they  may not seek or 
take instructions from any government of a Member State when performing their tasks. T he 
governments of the Member States have undertaken to respect this principle9. Moreover, under 
Article 127(6) of the Treaty and Council Regulation (EU) No 1024/201310 specific tasks concerning 
the prudential supervision of credit institutions have also been conferred upon the ECB.  As 
previously noted by the ECB, pursuant to the principle of sincere cooperation under Article 4(3) of 
the Treaty  on European Union, the Me mber States are obliged to assist the ECB in carrying out 
tasks which flow from the Treaties. This implies that Member States should refrain from taking any 
measures which could jeopardise the ECB’s or the ESCB’s objectives11. 
2.2 Article 347 of the Treaty envisages that a Member State may be called upon to take action in the 
event of serious internal disturbances affecting the maintenance of law and order, in the event of 
war, serious international tension constituting a threat of war, or in order to carry out obligations it 
has accepted for the purpose of maintaining peace and international security. However, any 
reliance on Article 347 of the Treaty must take place strictly in the exceptional cases  laid down in 
the Treaty itself, as interpreted by the Court of Justice of the European Union  (CJEU )12, in a 
restrictive manner, and it can therefore be understood only as a ‘hedging clause’ and not as an 
expression of any residual Member State competence13. Moreover, the CJEU  has held that , when 
acting due to urgency in areas of exclusive Union competence,  Member States may act only as 
 
6  See paragraph 9 of Opinion CON/2002/27, paragraph 8 of Opinion CON/2006/6, paragraph 2.1 of 
Opinion  CON/2014/24 and paragraph 2.1 of Opinion CON/2020/2, each available on www.eur -lex.europa.eu.  
7 See Article 3(1)(c) of the Treaty.  
8  See Article 282(2) and (4) of the Treaty and Articles 8 and 12 of the Statute of the ESCB.  
9  See Article 130 of the Treaty and Article 7 of the Statute of the ESCB.  
10  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63).  
11 See paragraph 2.1 of Opinions CON/2018/46 and CON/2020/2, and paragraph 10.2.2 of Opinion CON/2020/13.  
12 See judgment of the Court of Justice of 19 December 1968, Salgoil , 13/68, ECLI :EU:C:1968:54; judgment of the Court 
of Justice of 5 May 1981, Commission v UK, 804/79, ECLI:EU:C:1981: 93; paragraph 13 of Opinion CON/2006/6; 
paragraph 2.3 of Opinion CON/2020/2; Gilsdorfer and Brandtner, ‘Vorbem. zu den Artikeln 296 bis 298 EG’, Nos. 3 to 
5, in Bardenhewer -Rating, Grill, Jakob and Woelker (eds.), EG - und EU -Kommentar , 6th ed. (2004), p. 1534; Zilioli, 
C., ‘National Emergency Powers and Exclusive Community Competences – A Crack in the Dam?’ Legal Aspects of 
the European System of Central Banks , ECB, 2005, pp. 115 to 133, at pp. 131 to 132.  
13  Judgment of the Court of Justice of 19 December 1968, Salgoil , 13/68, ECLI:EU:C:1968:54; Gilsdorfer and Brandtner, 
‘Vorbem. zu den Artikeln 296 bis 298 EG’, Nos. 3 to 5, in Bardenhewer -Rating, Grill, Jakob and Woelker (eds.), EG- 
und EU -Kommentar , 6th ed. (2004), p. 1534; paragraph 13 of Opinion CON/2006/6; paragraph 2.3 of Opinion 
CON/2020/2.  
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5 ‘trustees of the common interest’ and may not bring into force any interim measures except as part 
of a process of collaboration with the Union14. Accordingly, only where the conditions under 
Article  347 of the Treaty are met , may national authorities be justified in exercising, on a temporary 
and exceptional basis, powers that fall within the exclusive competence of the ESCB15. Due to the 
exceptional nature of Article 347 of the Treaty, Member States should refrain from adopting 
preventive legislation in the absence of the conditions prescribed by Article 347 of the Treaty16. If 
the national legislature wishes to rely on this provision , it is for the Member State to ensure that the 
conditions for applying  Article 347 of the Treaty are specifically fulfilled at the time of adopting the 
measure that conflicts with that Member State’s Treaty obligations.  
2.3 The ECB understands that the Law and the Regulations take a holistic approach to national 
defence,  whereby  national defence includes not only the actions of specific defence authorities , 
such as the Council of Ministers, the Minister  for Defence, the CECPA and other specifically 
designated authorities, but also includes within national defence the actions of other public bodies 
and private persons within their respective fields of competence. As part of such a national defence 
policy the functions fulfilled by public bodies in usual circumstances, including the central banking 
function, support the resolution of national defence situations. The ECB notes  that this  approach 
must not lead to a breach of the obligations of the Republic of Cyprus under the Treaty  and the 
Statute of the ESCB highlighted above .  
2.4 As noted in paragraph 1.8 , the Minister  for Defence has the power to oversee the ECPAs and issue 
instructions to the ECPAs, including the CBC, with which the ECPAs have a duty to comply. The 
rights of government officials  to give instructions to NCBs, their decision- making bodies or their 
members are incompatible with the Treaty and the Statute of the ESCB  as far as ESCB- related 
tasks are concerned17. Therefore, w hile the ECB understands that the  power s attributed to the 
Minister  for Defence are intended to ensure compliance with the applicable legal framework  on 
national defence preparedness , it recommends that it should be explicitly clarified  in the  draft 
decree, for the avoidance of any doubt, that there should be no interference with the tasks and 
duties of the CBC as part of the ESCB18.  
2.5 Finally,  it is understood that the exact  defence tasks  that the CBC  will have to undertake are to be 
specified in the emergency plan to be drawn up by the CBC, in consultation with the Minister for 
Defence or the CECPA, after the issuance of the dra ft decree.  
 
 
14  See e.g. judgment of the Court of Justice of 5 May 1981, Commission v UK, 804/79, ECLI:EU:C:1981:93, 
paragraph  30; paragraph 13 of Opinion CON/2006/6; paragraph 2.3 of Opinion CON/2020/2.  
15 See paragraph 2.2 of Opinion CON/2014/24, paragraph 2.2 of Opinion CON/2020/2 and paragraph 10.2.2 of Opinion 
CON/2020/13.  
16  See C. Zilioli, ‘National Emergency Powers and Exclusive Community Competences –  A Crack in the Dam?’ Legal 
Aspects of the European System of Ce ntral Banks, ECB, 2005, pp. 115 to 133, at pp 131 to 132.  
17  See the ECB’s Convergence R eport 2020, available on  the ECB ’s website.  
18 See paragraph 2.7 of Opinion CON/2020/2.  
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6 3. Specific observations –  conferral of new task s on the CBC  
3.1 New task s of the CBC  
3.1.1  By designating the CBC as an ECPA and by virtue of the Law and the Regulations, t he draft decree 
confers upon the CBC a number of  tasks, such as preparing and implementing a dedicated 
emergency plan, ensuring that it is organis ed, prepar ed and has the necessary means and 
resources , and training its staff19. The proposed national defence preparedness task s of the CBC 
would differ from internal contingency planning undertaken by ESCB central banks such as the 
CBC. Contingency planning for the discharge of ESCB and other central banking tasks may take 
the form of an internally -driven process whereby the ESCB central  banks evaluate for themselves 
which resources they would need and how they should prepare for various emergency situations, 
including situations that could be characterised as defence situations, based on their own targets 
and strategies. By contrast, the proposed national defence preparedness task s of the CBC will be  
driven by external strategic plans and aims set by the Cypriot  Government and would require the 
CBC to take into account considerations external to the CBC, most notably the overarching national 
defence framework. This could lead to the CBC acquiring resources it might not otherwise have 
considered relevant, participating in planning processes it would not otherwise have taken part in 
and/or developing processes it would not otherwise have int roduced. This means, in effect, that the 
new tasks  introduce, alongside any internal contingency planning process, an additional process 
driven by the national defence framework. As such, the proposed new  national defence 
preparedness tasks would differ from an internal contingency planning performed by  the CBC, 
including within the framework of the ESCB, and therefore involves the conferral of a new task on  
the CBC20.  
3.1.2  The ECB underlines that a proposed conferral of new tasks on a n NCB in t he ESCB must be 
assessed against the prohibition on monetary financing under Article 123 of the Treaty. For the 
purposes of that prohibition, Article 1(1)(b)(ii) of Council Regulation (EC) No  3603/9321 defines 
‘other type of credit facility’, inter alia, as ‘any financing of the public sector’s obligations vis -à-vis 
third parties’.  
3.1.3  Ensuring that Member States implement a sound budgetary policy is one of the key objectives of 
the monetary financing prohibition22. Therefore, the task of financing measures, which are normally 
the responsibility of the Member States, and which are financed from their budgetary sources rather 
than by the NCBs, must not be entrusted to NCBs. To decide what constitutes financing of the 
public sector’s obligations vis -à-vis third pa rties, which can be translated as the provision of central 
bank financing outside the scope of central bank tasks, it is necessary to carry out, on a case- by-
case basis, an assessment of whether the task to be undertaken by an NCB is a central bank task 
or a government task, i.e. a task that falls within the responsibilit ies of the Member States.  
 
19  See paragraph 3.1.1 of Opinion CON/2020/2.  
20  See paragraph 3.1.2 of Opinion C ON/2020/2.  
21  Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions 
referred to in Articles 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1).  
22  Article 123 of the Treaty also serves  the objective of maintaining price stability and reinforces central bank 
independence.  
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7 3.1.4  As part of its discretion in the exercise of its duty, on the basis of Article 271(d) of the Treaty and 
Article  35.6 of the Statute of the ESCB, to ensure that NC Bs honour the obligations laid down by 
the Treaty, the Governing Council has endorsed criteria for determining what may be seen as falling 
within the scope of a public sector obligation within the meaning of Article 1(1)(b)(ii) of Regulation 
(EC) No 3603/93 or, in other words, what constitutes a government task as follows:  
First, central bank tasks are in particular those tasks that are related to the tasks that have been 
conferred upon the ECB and the NCBs by the Treaty and the Statute of the ESCB. These t asks are 
mainly defined in Articles  127(2), (5) and (6) and 128(1) of the Treaty, as well as Article 22 and 
Article 25.1 of the Statute of the ESCB.  
Second, as Article 14.4 of the Statute of the ESCB allows NCBs to perform ‘other functions’, new 
tasks, i.e . tasks that are not related to tasks that have been conferred upon the ECB and the NCBs, 
are not precluded per se. However, new tasks that are undertaken by an NCB and which are 
atypical of NCB tasks or which are clearly discharged on behalf of, and in the exclusive interest of , 
the government or other public sector entities should be considered government tasks.  
Third, an important criterion for qualifying a new task as atypical of an NCB task or as being clearly 
discharged on behalf of , and in the exclus ive interest of , the government or other public sector 
entities is the impact of the task on the institutional, financial and personal independence of that 
NCB.  
In particular, the following aspects should be taken into account:  
(a)  whether the performance of the new task creates conflicts of interest with existing central 
bank tasks which are not adequately addressed and does not necessarily complement 
those existing central bank tasks. If a conflict of interest arises between existi ng and new 
tasks, sufficient safeguards to mitigate that conflict should be in place. The complementarity 
between a new task and the existing central bank tasks should not be interpreted broadly, 
so as to lead to the creation of an indefinite chain of anci llary tasks. Such complementarity 
should be examined in relation to the financing of those tasks;  
(b) whether without new financial resources the performance of the new task is disproportionate 
to the NCB’s financial or organisational capacity, and may have a negative impact on the 
capacity to perform properly the existing central bank tasks;  
(c)  whether the performance of the new task fits into the institutional set -up of the NCB in the 
light of central bank independence and accountability considerations;  
(d)  whether the performance of the new task harbours substantial financial risks;  
(e)  whether the p erformance of the new task exposes the members of the NCB decision -
making bodies to political risks which are disproportionate and may also have an impact on 
their personal independence and, in particular, on the guarantee of term of office set out in 
Article 14.2 of the Statute of the ESCB.  
3.1.5  Based on the criteria set out above, the following paragraphs assess whether the new national 
defence preparedness task s of the CBC are in line with the prohibition on  monetary financing.  
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8 3.2 Tasks related to the tasks conf erred upon the ECB and the NCBs by the Treaty and the Statute of 
the ESCB  
3.2.1  The purpose of  the Law and,  by consequence,  of the Regulations and the draft decree is to 
strengthen the defence capacity of the Republic of Cyprus in the face of any hostile actions  against 
it. The functions of the NCBs under the Treaty and the Statute of the ESCB do not encompass this  
aim. The new tasks conferred on the CBC  are not therefore related to the tasks that have been 
conferred upon the ECB and the NCBs by the Treaty and th e Statute of the ESCB.  
3.3 Tasks which are atypical of NCB tasks  
3.3.1  While the majority of  NCBs of the ESCB do not appear to have been assigned national defence 
preparedness tasks, NCBs in several Member States have been assigned national defence 
preparedness tasks which are similar to the new task assigned to the CBC23. Based on this the 
 
23  In 10 Member States (Bulgaria, the Czech Republic, Finland, Greece, Hungary, Latvia, Lithuania, Poland, Slovakia 
and Slovenia) NCBs have been assigned some type of national defence preparedness obligations. In Bulgaria , 
pursuant to Article 42 of the Law on defence and armed forces of the Republic of Bulgaria, Българска народна банка  
(BNB, Bulgarian National Bank) must : (i) develop rules and norms for providing for the activity of the banking system 
during war time; (ii) in coordination with the Minister for  Defence develop a plan enabling  BNB to work in wartime; and 
(iii) manage  the planning process to enable the banking system to work during wartime. In the Czech Republic 
preparedness for crisis situations is set out in Article 13 of the Law  on crisis (No. 240/2000 Coll.)  and in Article 23 of 
the Law on economic measures for crisis situations  (No. 241/2000 Coll.),  and includes, inter alia,  an obligation of the 
central bank to cooperate with the government, to adopt a proper crisis plan and to establish and o perate a crisis crew. 
In Finland , the Law on emergency powers (2011/1552) applies to public organs and institutions such as Suomen 
Pankki, but only in emergency situations, and confers specific tasks on them. Emergency situations are explicitly 
defined in the Law on emergency powers. The Law on emergency powers also sets out a general preparedness 
obligation. In Greece, an Emergency Planning Office was established in the Bank of Greece in 1975, by 
Decision  No 670/5/222984/24.9.1975 of the Minister for Natio nal Defence that was issued on the basis of Article 12 of 
Legislative Decree 17/1974 on emergency planning. The Emergency Planning Office deals with emergency planning 
policy issues including the design of emergency planning to the extent this is associate d with the Bank of Greece’s 
competences, the measures to be taken during peacetime with a view to implementing emergency planning policy, 
and the monitoring of preparedness as regards the execution of emergency planning policy. In Hungary, according to 
Article 18(3) of Law CXIII of 2011 on national defence and the Hungarian armed forces and the measures adoptable 
under a special legal order (Law on national defence), Magyar Nemzeti Bank wi ll participate in the preparation for 
national defence in the perform ance of its tasks, in its area of operations, but wi ll be exempted from the requirement 
of economic and material service obligations. In Latvia, the functions of Latvijas Banka also apply in national defence 
situations and thus Latvijas Banka plans the pre paredness for such situations, inter alia, within contingency planning. 
Latvijas Banka also participates in national defence planning at national level. In Lithuania, according to the Law on 
mobilisation and adoptive country support, Lietuvos bankas is a c ivil mobilisation institution. Paragraph 3.5 of the 
Government resolution on the State mobilisation tasks for State municipal institutions and Authorities of the Republic 
of Lithuania determines the mobilisation tasks for Lietuvos bankas as follows: to ensure:  (i) the supervision of activities 
of essential financial market participants supervised by Lietuvos bankas; (ii) the management and usage of the foreign 
financial assets of Lietuvos bankas; (iii) the delivery of cash for subjects of the mobilisation system who perform vital 
State functions; (iv) the performance of credit operations of Lietuvos bankas as well as the effective operation of the 
necessary information systems and databases; (v) the functioning of the necessary payment systems of Lietuvos 
bankas; (vi) international relations related to financial support for the Republic of Lithuania, as well as representation 
of the Republic of Lithuania in international institutions. In Poland, under point 2 of Article 11(5)  of the Law on Narodowy 
Bank Polsk i, the President of Narodowy Bank Polski (NBP) must perform tasks resulting from the universal duty to 
defend the Republic of Poland. Also, on the basis of Articles  18(3) and 22(1) of the Law on the general defence 
obligation and point 2 of Article 11(5)  of the Law on Narodowy Bank Polski (and in some cases on the basis of Council 
of Ministers ’ regulations), the President of NBP has issued various defence related ordinances . In Slovakia , according 
to Article 23 of Law No 179/2011 Coll. on economic mobilisation, as amended, Národná banka Slovenska (NBS) will 
prepare and carry out measures in times of crisis in the foreign exchange field, including the protection of foreign 
reserve assets. NBS will also : (i) provide the cash banking services necessary for the activities of the armed forces of 
the Slovak Republic, armed security corps, the Slovak Intelligence Service and the Military Police, upon written 
agreement concluded with  the Ministry of Finance and the State Treasury; (ii) control, within its field of competence, 
the performance of the measures of economic mobilisation; (iii)  process and update information necessary for the 
performance of the measures of economic mobilisation within the specific application program of the unified information 
software; (iv)  process the emergency plan of economic mobilisation according to instructions provided by the Ministry 
of Economy and determine access rights for other users within the specific application program me of the unified 
information software. In Slovenia, Banka Slovenije is engaged in national defence planning during peacetime. 
According to the Law on defence, the government, which adopts the country’s defence plan, prescribes in detail the 
process of drawing up and the content of defence plans and the planning of production and services during wartime. 
 
ECB -PUBLIC  
9 proposed national defence preparedness task of  the CBC could be considered to be a task which 
is not atypical of NCB tasks. In several Member States the related costs for the NCBs are required 
to be reimbursed by the central government24. 
3.4 Tasks clearly discharg ed on behalf of and in the exclusive interest of the government  
3.4.1  As noted above, the purpose of the Law and,  by consequence , of the Regulations and the draft 
decree is to strengthen the defence capacity of the Republic of Cyprus in the face of any hostile 
actions against it. The CBC’s proposed national defence preparedness task would therefore be 
clearly discharged on behalf of and in the exclusive interest of the Cypriot  government25.  
3.5 Extent to which performance of the new task s create conflicts of interest with existing central bank 
tasks 
3.5.1  The performance of the national defence preparedness task would be unlikely to give rise to any 
conflicts of interes t with the CBC’s existing central bank tasks. However, it should be ensured that 
the assignment of national defence tasks to the CBC does not conflict with Union law (see 
paragraph 2.1)26.  
3.6 Extent to which performance of the new task s are disproportionate to the CBC’s financial or 
organisational capacity  
3.6.1  As previously noted by the ECB27, the principle of financial independence requires that Member 
States may not put their NCBs in a position where they have insufficient resources to carry out both 
their ESCB- related tasks and their national tasks, from an operational and financial perspective. 
Furthermore, when allocating specific new tasks to NCBs, each NCB concerned should have 
sufficient financial and human resources at its disposal to ensure that the tasks can be carried out 
without impacting on the NCB’s financial or operational capacity to perform its ESCB tasks. In order 
to ensure that the CBC’s capacity to perform its ESCB -related tasks is not impaired,  the CBC must, 
therefore, be in a position to avail itself of the necessary resources to carry out its duties under the 
draft decree, together with the Law and the Regulations . At this stage, it is not possible for the ECB 
to assess what additional resources the CBC will require in order  to perform its new task s under 
the draft decree, together with the Law and the Regulations . Nevertheless, i t is noted that the draft 
decree does not provide for  the CBC being  reimbursed for the costs of carrying out the se new task s 
as is the case in at least three Member States where reimbursement mechanisms for the 
performance of similar tasks have been included in the relevant national legislation (see 
paragraph 3.3.1 ). Alth ough the ECB is not aware of whether the potential financial burden on the 
 
This is done by the Decree on defence planning, which defines the scope and content of the defence plan, and the 
responsibility for defence planning (the scope of tasks related to the functioning of the defence system in emergency 
situations, war or crises).  
24  In Bulgaria , Article 13 of the Law on defence and armed forces of the Republic of Bulgaria provides that the financial 
provision for defence activities must  be borne by the State budget and other sources, provided for in a law or act of 
the Council of Ministers. In Lithuania, Article 31 of the Law on mobilisation and adoptive country support provides that 
the Ministry of Def ence, the Mobilisation Department, the Lithuanian Army and civil mobilisation institutions wi ll be 
financed from the State budget for the implementation of the mobilisation system tasks established by the Law. In 
Slovakia, according to Article 1(2) of the Decree of the Ministry of Economy of the Slovak Republic No 552/2011 Coll. 
all expenses incurred by NBS as a result of economic mobilisation will be reimbursed to the NBS from the State budget.  
25  See paragraph 3.4.1 of Opinion CON/2020/2.  
26  See paragraph 3.5.1 of Opinion CON/2020/2.  
27  See, for example, paragraph 4.6.1 of Opinion CON/2018/21.  
ECB -PUBLIC  
10 CBC will be significant, the ECB invites the consulting authority to consider the impact of the draft 
decree, together with the Law and the Regulations,  on the resources of the CBC,  and include a 
reimbursement mechanism in the relevant legislation  in order to avoid any potential breach of 
Article  123 of the Treaty28. 
3.7 Extent to which performance of the new task fits into the institutional set -up of the CBC, in the light 
of central bank independence and accountability considerations  
3.7.1  The potential impact of the new task s on the institutional, financial and personal indepe ndence of 
the CBC must also be taken into consideration. In particular , consideration is given to the power 
granted to the Minister for Defence to exercise general oversight and control  over the fulfilment of 
the new tasks and to give the CBC instructions in this regard.  While it is understood that this power 
is aimed at compliance with the national defence preparedness framework, it should be ensured 
that, as far as  the fulfilment of  ESCB- related tasks is  concerned, this power  is exercised in 
accordance wi th Union law (see paragraph 2.2).  
3.8 Extent to which the performance of tasks harbours substantial financial risks  
3.8.1  The Regulations provide that  the members of an ECPA’s personnel are not to be held liable for any 
damage caused by any action or omission during the exercise of their duties, provided that such 
damage was reasonably necessary for the exercise of their duties, except in the event of negligence 
or fault. Furthe rmore, this task would seem to primarily require planning and coordination within the 
CBC and with the competent national authorities. Hence,  the ECB is not aware of significant 
financial liabilities for the CBC arising out of this task . At the same time,  the ECB invites the 
consulting authority to consider introducing a provision on the liability of the CBC in relation to the 
tasks it undertak es in carrying out its role as an ECPA to bring it in line with  other existing laws 
which attribute tasks to  the CB C29. 
3.9 Extent to which the performance of the new task s expose members of the decision -making bodies 
of the CBC to disproportionate political risks and impact on their personal independence  
3.9.1  The ECB does not consider that the new task s would either expose the members of the decision-
making bodies of the CBC to disproportionate political risks or impact on their personal 
independence. Moreover, national defence preparations and planning are primarily the tasks of 
other authorities and the additional i nvolvement of  the CBC in national defence preparations is not  
likely to be substantial. In such circumstances any impact on the members of  the CBC’s decision-
making bodies should be limited30.  
3.10 Conclusion regarding the conferral of new tasks on the CBC  
3.10.1  Although the new tasks, including the national defence preparedness task of the CBC , could be 
considered to be task s which are not atypical of NCBs ’ tasks in the ESCB, th ese tasks would be 
clearly discharged on behalf of and in the exclusive interest of the Cypriot  government, in order to 
ultimately strengthen the defence capacity of the Republic of Cyprus in the face of any hostile 
 
28  See paragraph 3.6.1 of Opinion CON/2020/2.  
29  See Article 32 of the Law on the b usiness of c redit institutions of 1997 (66(I)/1997), Article 47A 6(3) of the Law on the 
Central Bank of Cyprus of 2002 (138(I)/2002), and Article 52 of the Law on credit agreements for consumers relating 
to immovable property intended for residential use of 2017 (41(I)/2017).  
30  See paragraph 3.9.1 of Opinion CON/2020/2.  
ECB -PUBLIC  
11 actions against it. Given that th ese tasks go beyond the internal contingency planning tasks of  a 
central bank, they are government, rather than central banking task s. Therefore, similar to the 
arrangements existing in a number of Member States which have conferred comparable tasks on 
their NCBs, a mechanism for reimbursing the CBC for any costs inc urred in the performance of this 
government task  should be introduced in the relevant legislation.   
 
This opinion will b e published on EUR -Lex.  
 
 
Done at Frankfurt am Main, 22 November  2021.  
 
[signed]  
 
The President of the ECB  
Christine  LAGARDE