JUDGMENT OF THE GENERAL COURT (Fourth Chamber, Extended Composition)

13 July 2018 ( *1 )

(Non-contractual liability - Economic and monetary policy - Stability support programme for Cyprus - Decision of the Governing Council of the ECB relating to emergency liquidity assistance following a request from the Central Bank of Cyprus - Euro Group Statements of 25 March, 12 April, 13 May and 13 September 2013 concerning Cyprus - Decision 2013/236/EU - Memorandum of Understanding of 26 April 2013 on Specific Economic Policy Conditionality concluded between the Republic of Cyprus and the European Stability Mechanism - Jurisdiction of the General Court - Admissibility - Formal requirements - Exhaustion of national rights of action - Sufficiently serious breach of a rule of law intended to confer rights on individuals - Right to property - Legitimate expectations - Equal treatment)

In Case T‑680/13,

Dr. K. Chrysostomides & Co. LLC, established in Nicosia (Cyprus), and the other applicants whose names are included in the annex, represented by P. Tridimas, Barrister, ( 1 )

applicants,

v

Council of the European Union, represented by A. de Gregorio Merino, E. Dumitriu-Segnana, E. Chatziioakeimidou and E. Moro, acting as Agents,

European Commission, represented initially by B. Smulders, J.-P. Keppenne and M. Konstantinidis, and subsequently by J.-P. Keppenne, M. Konstantinidis and L. Flynn, acting as Agents,

European Central Bank (ECB), represented initially by N. Lenihan and F. Athanasiou, subsequently by P. Papapaschalis and P. Senkovic and finally by M. Szablewska and K. Laurinavičius, acting as Agents, and by H.-G. Kamann, avocat,

Euro Group, represented by the Council of the European Union, represented by A. de Gregorio Merino, E. Dumitriu-Segnana, E. Chatziioakeimidou and E. Moro, acting as Agents,

European Union, represented by the European Commission, represented initially by B. Smulders, J.-P. Keppenne and M. Konstantinidis, and subsequently by J.-P. Keppenne, M. Konstantinidis and L. Flynn, acting as Agents,

defendants,

ACTION under Article 268 TFEU seeking compensation for damage allegedly suffered by the applicants as a result of the decision of the Governing Council of the ECB of 21 March 2013 relating to emergency liquidity assistance following a request from the Central Bank of Cyprus, the Euro Group Statements of 25 March, 12 April, 13 May and 13 September 2013 concerning Cyprus, Council Decision 2013/236/EU of 25 April 2013 addressed to Cyprus on specific measures to restore financial stability and sustainable growth (OJ 2013 L 141, p. 32), the Memorandum of Understanding of 26 April 2013 on Specific Economic Policy Conditionality concluded between the Republic of Cyprus and the European Stability Mechanism (ESM), and other acts and conduct of the Commission, Council, the ECB and the Euro Group connected with the grant of a financial assistance facility to the Republic of Cyprus.

THE GENERAL COURT (Fourth Chamber, Extended Composition),

composed of H. Kanninen (Rapporteur), President, J. Schwarcz, C. Iliopoulos, L. Calvo-Sotelo Ibáñez-Martín and I. Reine, Judges,

Registrar: S. Spyropoulos, Administrator,

having regard to the written part of the procedure and further to the hearing on 11 September 2017,

gives the following

Judgment

I. Background to the dispute

A. ESM Treaty

1 On 2 February 2012, the Treaty Establishing the European Stability Mechanism between the Kingdom of Belgium, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus, the Grand Duchy of Luxembourg, the Republic of Malta, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of Slovenia, the Slovak Republic and the Republic of Finland (‘the ESM Treaty’) was concluded in Brussels (Belgium). That Treaty entered into force on 27 September 2012.

2 Recital 1 of the ESM Treaty is worded as follows: ‘The European Council agreed on 17 December 2010 on the need for euro area Member States to establish a permanent stability mechanism. This European Stability Mechanism (“ESM”) will assume the tasks currently fulfilled by the European Financial Stability Facility (“EFSF”) and the European Financial Stabilisation Mechanism (“EFSM”) in providing, where needed, financial assistance to euro area Member States.’

3 In accordance with Articles 1, 2 and 32(2) of the ESM Treaty, the Contracting Parties, that is to say, the Member States whose currency is the euro (‘the MSCE’), are to establish among themselves an international financial institution, the European Stability Mechanism (ESM), which is a legal person.

4 Article 3 of the ESM Treaty describes the purpose of the ESM as follows: ‘The purpose of the ESM shall be to mobilise funding and provide stability support under strict conditionality, appropriate to the financial assistance instrument chosen, to the benefit of ESM Members which are experiencing, or are threatened by, severe financing problems, if indispensable to safeguard the financial stability of the euro area as a whole and of its Member States. For this purpose, the ESM shall be entitled to raise funds by issuing financial instruments or by entering into financial or other agreements or arrangements with ESM Members, financial institutions or other third parties.’

5 Article 4(1) and (3) and the first sentence of Article 4(4) of the ESM Treaty provides: ‘(1) The ESM shall have a Board of Governors and a Board of Directors, as well as a Managing Director and other dedicated staff as may be considered necessary. … (3) The adoption of a decision by mutual agreement requires the unanimity of the members participating in the vote. Abstentions do not prevent the adoption of a decision by mutual agreement. (4) By way of derogation from paragraph 3, an emergency voting procedure shall be used where the Commission and the ECB both conclude that a failure to urgently adopt a decision to grant or implement financial assistance, as defined in Articles 13 to 18, would threaten the economic and financial sustainability of the euro area. … .’

6 Article 5(3) of the ESM Treaty provides that ‘[t]he Member of the … Commission in charge of economic and monetary affairs and the President of the ECB, as well as the President of the Euro Group (if he or she is not the Chairperson or a Governor) may participate in the meetings of the Board of Governors [of the ESM] as observers’.

7 Article 6(2) of the ESM Treaty provides that ‘[t]he Member of the European Commission in charge of economic and monetary affairs and the President of the ECB may appoint one observer each [to the ESM’s Board of Directors]’.

8 Article 12 of the ESM Treaty defines the principles governing the provision of stability support and states in paragraph 1 as follows: ‘If indispensable to safeguard the financial stability of the euro area as a whole and of its Member States, the ESM may provide stability support to an ESM Member subject to strict conditionality, appropriate to the financial assistance instrument chosen. Such conditionality may range from a macro-economic adjustment programme to continuous respect of pre-established eligibility conditions.’

9 Article 13 of the ESM Treaty describes the procedure for granting stability support to ESM Members as follows: ‘(1) An ESM Member may address a request for stability support to the Chairperson of the Board of Governors. Such a request shall indicate the financial assistance instrument(s) to be considered. On receipt of such a request, the Chairperson of the Board of Governors shall entrust the … Commission, in liaison with the ECB, with the following tasks: (a) to assess the existence of a risk to the financial stability of the euro area as a whole or of its Member States, unless the ECB has already submitted an analysis under Article 18(2); (b) to assess whether public debt is sustainable. Wherever appropriate and possible, such an assessment is expected to be conducted together with the [International Monetary Fund (IMF)]; (c) to assess the actual or potential financing needs of the ESM Member concerned. (2) On the basis of the request of the ESM Member and the assessment referred to in paragraph 1, the Board of Governors may decide to grant, in principle, stability support to the ESM Member concerned in the form of a financial assistance facility. (3) If a decision pursuant to paragraph 2 is adopted, the Board of Governors shall entrust the … Commission — in liaison with the ECB and, wherever possible, together with the IMF — with the task of negotiating, with the ESM Member concerned, a memorandum of understanding (an “MoU”) detailing the conditionality attached to the financial assistance facility. The content of the MoU shall reflect the severity of the weaknesses to be addressed and the financial assistance instrument chosen. In parallel, the Managing Director of the ESM shall prepare a proposal for a financial assistance facility agreement, including the financial terms and conditions and the choice of instruments, to be adopted by the Board of Governors. The MoU shall be fully consistent with the measures of economic policy coordination provided for in the [FEU Treaty], in particular with any act of [EU] law, including any opinion, warning, recommendation or decision addressed to the ESM Member concerned. (4) The … Commission shall sign the MoU on behalf of the ESM, subject to prior compliance with the conditions set out in paragraph 3 and approval by the Board of Governors. (5) The Board of Directors shall approve the financial assistance facility agreement detailing the financial aspects of the stability support to be granted and, where applicable, the disbursement of the first tranche of the assistance. … (7) The … Commission — in liaison with the ECB and, wherever possible, together with the IMF — shall be entrusted with monitoring compliance with the conditionality attached to the financial assistance facility.’

B. Financial difficulties of the Republic of Cyprus and request for financial assistance

10 During the first months of 2012, the Hellenic Republic and its private bondholders agreed, and then carried out, an exchange of Greek bonds at a substantial haircut on the nominal value of Greek debt held by private investors [Private Sector Involvement (‘the PSI’)].

11 As a result of their exposure to bonds which were subject to the PSI, several banks established in Cyprus, including the Cyprus Popular Bank Public Co Ltd (‘Laïki’) and the Trapeza Kyprou Dimosia Etaireia LTD (‘BoC’), suffered significant losses. In total, those losses amounted to more than EUR 4 billion and represented approximately 25% of the gross domestic product (GDP) of the Republic of Cyprus.

12 Laïki, BoC and other banks established in Cyprus subsequently suffered under-capitalisation problems. Since it was no longer able to supply sufficient securities to seek funding from the European Central Bank (ECB), Laïki requested, and obtained, Emergency Liquidity Assistance (‘ELA’) from the Kentriki Trapeza tis Kyprou (Central Bank of Cyprus) (‘the CBC’). The total amount of ELA granted to Laïki was EUR 3.8 billion in May 2012 and EUR 9.6 billion on 3 July 2012.

13 In those circumstances, the Republic of Cyprus judged it necessary to intervene in support of the Cypriot banking sector, in particular by recapitalising Laïki to the value of EUR 1.8 billion in June 2012. During that month, BoC announced that it also had requested the Cypriot authorities for capital support, but did not obtain it.

14 At that time, the Republic of Cyprus was itself already confronted with major financial and budgetary difficulties. Since its rating had already been downgraded by one or two notches by the rating agencies Fitch, Moody’s and Standard & Poor’s in the first quarter of 2011, as a result, in particular, of exposure of its banking sector to the Greek economy, from May 2011 the Republic of Cyprus became unable to refinance itself at rates compatible with long-term fiscal sustainability. In those circumstances, the Republic of Cyprus covered its financing needs, in particular, by issuing very short-term treasury bonds and by concluding, in October 2011, an official loan agreement for EUR 2.5 billion with the Federation of Russia.

15 On 25 June 2012, since the rating agency Fitch had, following the agencies Moody’s and Standard & Poor’s, downgraded the Republic of Cyprus to a speculative grade, the latter’s bonds ceased to be accepted as collateral for the monetary operations of the Eurosystem, which is composed of the central banks of the MSCE and of the ECB, which conduct the monetary policy of the European Union. On that same day, the Republic of Cyprus presented a request to the president of the Euro Group for financial assistance from the ESM or from the European Financial Stability Facility (EFSF). According to the statements of the Cypriot Government, the assistance requested sought to ‘contain the risks to the Cypriot economy, notably those arising from the negative spill over effects through its financial sector, due to its large exposure in the Greek economy’.

16 By statement of 27 June 2012, the Euro Group indicated that the financial assistance requested would be provided to the Republic of Cyprus by either the EFSF or the ESM in the context of a macroeconomic adjustment programme to be defined in an MoU to be negotiated between the European Commission together with the ECB and the International Monetary Fund (IMF), on the one hand, and the Cypriot authorities, on the other.

17 On 29 November 2012, representatives of the Commission, the ECB, the IMF and the Republic of Cyprus drew up a draft MoU.

18 By statement of 21 January 2013, the Euro Group, first, indicated that a final agreement concerning a macroeconomic adjustment programme could be reached in March 2013 and, secondly, encouraged the parties concerned to make progress so as to finalise the components of the draft MoU.

19 In March 2013, the Republic of Cyprus and the other MSCE reached a political agreement on the draft MoU.

20 By statement of 16 March 2013, the Euro Group welcomed that agreement, and the commitment by the Cypriot authorities to take additional measures to mobilise domestic resources, in order to limit the extent of financial assistance connected with the macroeconomic adjustment programme referred to in paragraph 18 above. Those measures include, in particular, the introduction of a levy on Cypriot bank deposits, restructuring and recapitalisation of banks, and the bail-in of the holders of low-ranking bonds. The Euro Group also noted that the Cypriot financial sector would be subject to an appropriate reduction with a view to remedying its weakness and its very large size in relation to the GDP of the Republic of Cyprus. In that context, the Euro Group indicated that it considered that the grant of financial assistance to safeguard financial stability in the Republic of Cyprus and the euro area was, in principle, warranted and called on the parties concerned to expedite the negotiations that were underway.

21 On 18 March 2013, the Republic of Cyprus declared a bank holiday on 19 and 20 March 2013. Subsequently, the Cypriot authorities decided to extend that bank holiday until 28 March 2013 in order to avoid a run on the banks.

22 On 19 March 2013, the Cypriot Parliament rejected the Cypriot Government’s bill relating to the introduction of a levy on all bank deposits in Cyprus. The Cypriot Government then prepared a new draft law providing solely for the restructuring of two Cypriot banks, namely BoC and Laïki (‘the banks concerned’).

23 On 21 March 2013, although the debts of Laïki and BoC arising from ELA amounted respectively to EUR 9.5 billion and EUR 1.9 billion, the ECB published a press release in which it stated the following: ‘The Governing Council of the [ECB] decided to maintain the current level of [ELA] until … 25 March 2013. Thereafter [ELA] could only be considered if an [EU or IMF] programme is in place that would ensure the solvency of the concerned banks.’

24 On 22 March 2013, the Cypriot Parliament adopted the O peri exiyiansis pistotikon kai allon idrimaton nomos (No 17(1)/2013) (Law on the Resolution of Credit and Other Institutions, EE, Annex I(I), No 4379, 22 March 2013, p. 117) (‘the Law of 22 March 2013’). Under section 3(1) and section 5(1) of that law, the CBC was entrusted, together with the Minister for Finance, with the resolution of the institutions covered by that law. To that end, section 12(1) of the Law of 22 March 2013 provides that the CBC may, by decree, restructure the debts and obligations of an institution under resolution, including by means of the reduction, modification, rescheduling or novation of the nominal capital or of the outstanding amount of any type of claim, actual or future, against the institution, or by the conversion of debt instruments or obligations into equity capital. Next, that section excludes from those measures insured deposits, for the purposes of the fifth sentence of section 2 of the Law of 22 March 2013, that is to say deposits of EUR 100000 or less. Section 3(2)(a) and (b) of that law provides that the shareholders of an institution under resolution are to be the first to be liable for any losses resulting from the implementation of the resolution measures, whereas the creditors of such an institution are liable for those losses only after the shareholders. Finally, it is apparent from section 3(2)(d) of that law that the measures adopted on the basis of that law cannot place the creditors financially in a less favourable position than that in which they would be in the event of the liquidation of those banks. Section 12(14) of the law at issue states that, in the event of an implementation of the measure provided for in section 12(1) of that law, the affected parties are to receive, in payment of their claims, at least the amount they would have received, under Cypriot law, in the event of the liquidation of those banks.

25 By a statement of 25 March 2013, Euro Group indicated that it had reached an agreement with the Cypriot authorities on the key elements necessary for a future macroeconomic adjustment programme with the support of all of the MSCE and of the Commission, the Council, the ECB and the IMF.

26 That statement sets out, in particular, the following: ‘The Euro Group welcomes the plans for restructuring the financial sector as specified in the annex. These measures will form the basis for restoring the viability of the financial sector. In particular, they safeguard all deposits below EUR 100000 in accordance with EU principles. The programme will contain a decisive approach to addressing financial sector imbalances. There will be an appropriate downsizing of the financial sector … . The Euro Group urges the immediate implementation of the agreement between [the Republic of Cyprus] and [the Hellenic Republic] on Greek branches of Cypriot banks, which protects the stability of both the Greek and Cypriot banking systems.’

27 The annex to that statement is worded as follows: ‘Following the presentation by the authorities [of the Republic of Cyprus] of their policy plans, which were broadly welcomed by the Eurogroup, the following was agreed: (1) Laïki will be resolved immediately — with full contribution of equity shareholders, bond holders and uninsured depositors — based on a decision by [CBC], using the newly adopted Bank Resolution Framework. (2) Laiki will be split into a good bank and a bad bank. The bad bank will be run down over time. (3) The good bank will be folded into [BoC], using the Bank Resolution Framework, after having heard the Board of Directors of BoC and Laïki. It will take EUR 9 billion of ELA with it. Only uninsured deposits in BoC will remain frozen until recapitalisation has been effected, and may subsequently be subject to appropriate conditions. (4) The Governing Council of the ECB will provide liquidity to the BoC in line with applicable rules. (5) BoC will be recapitalised through a deposit/equity conversion of uninsured deposits with full contribution of equity shareholders and bond holders. (6) The conversion will be such that a capital ratio of 9% is secured by the end of the programme. (7) All insured depositors in all banks will be fully protected in accordance with the relevant EU legislation. (8) The programme money (up to EUR 10 billion) will not be used to recapitalise Laïki and [BoC].’

28 As was pointed out in reply to the Court’s measures of organisation of procedure, it was considered that, out of the EUR 10 billion included in the programme budget, EUR 3.4 billion would be allocated to the budgetary needs of the Republic of Cyprus, EUR 4.1 billion to the redemption, by the latter, of debt instruments and EUR 2.5 billion to restructuring Cypriot banks other than the banks concerned.

C. Bank restructuring measures adopted by the Republic of Cyprus

29 On 25 March 2013, the Governor of the CBC placed the banks concerned into resolution.

30 Subsequently, four decrees were published in that connection on the basis of the Law of 22 March 2013, namely: – the Kanonistiki Dioikitiki Praxi 96/2013, peri tis Polisis ergasion ton en elladi ergasion tis Trapezas Kyprou Dimosias Etaireias Ltd Diatagma tou 2013 (Decree 96/2013 on the sale of certain operations of the BoC in Greece, Regulatory Administrative Act No 96), of 26 March 2013 (EE, Annex III(I), No 4640, 26 March 2013, p. 745) (‘Decree No 96’); – the Kanonistiki Dioikitiki Praxi 97/2013, peri tis Polisis ergasion ton en elladi ergasion tis Cyprus Popular Bank Public Co Ltd Diatagma tou 2013 (Decree 97/2013 on the sale of certain operations of Laïki in Greece, Regulatory Administrative Act No 97), of 26 March 2013 (EE, Annex III(I), No 4640, 26 March 2013, p. 749) (‘Decree No 97’); – the Kanonistiki Dioikitiki Praxi 103/2013, peri diasosis me idia mesa tis Trapezas Kyprou Dimosias Etaireias Ltd Diatagma tou 2013 (Decree 103/2013 on the bailing-in of BoC, Regulatory Administrative Act No 103), of 29 March 2013 (EE, Annex III(I), No 4645, 29 March 2013, p. 769 (‘Decree No 103’); – the Kanonistiki Dioikitiki Praxi 104/2013, peri tis Polisis Orismenon Ergasion tis Cyprus Popular Bank Public Co Ltd Diatagma tou 2013 (Decree 104/2013 on the sale of certain operations of Laïki, Regulatory Administrative Act No 104), of 29 March 2013 (EE, Annex III(I), No 4645, 29 March 2013, p. 781) (‘Decree No 104’).

31 Decrees No 96 and 97 provide, respectively, for the sale of branches of BoC and Laïki established in Greece (together, ‘the Greek branches’).

32 Sections 5 and 6 of Decree No 103 provide for a recapitalisation of BoC, at the expense, in particular, of its own unsecured depositors and its shareholders, so that it could continue to provide banking services. Accordingly, the uninsured deposits in BoC were converted into shares thereof (37.5% of each uninsured deposit), into securities which were convertible, by BoC, either into shares or into deposits (22.5% of each uninsured deposit), and into securities which were convertible into deposits by the CBC (40% of each uninsured deposit). Among those securities which were convertible into deposits by BoC, 25% (10% of each uninsured deposit) were released. The remaining 75% (30% of each uninsured deposit) continued to be unavailable to the depositors. Section 6(5) of Decree No 103 states that, if the contributions of uninsured depositors exceed what is necessary in order to restore the equity capital of BoC, the resolution authority will determine the amount corresponding to overcapitalisation and will treat it as if the conversion had never taken place, Pursuant to section 10 thereof, Decree No 103 entered into force on 29 March 2013, at 6.00 a.m.

33 Following amendments made to Decree No 103 of 30 July 2013, first, 10% of uninsured deposits, which had previously been converted into securities convertible either into shares or into deposits, were converted into shares in BoC. Of the remaining securities convertible, by the CBC, either into shares or into deposits (12.5% of each uninsured deposit) and those which could be converted into deposits by the CBC and which had not already been made available (30% of each uninsured deposit), 12% were placed into a new current account, whereas 88% were placed, in equal parts, in six-month, nine-month and 12-month deposit accounts respectively.

34 Secondly, the nominal value of EUR 1 of each ordinary share in BoC was reduced to one cent. Subsequently, 100 ordinary shares with a nominal value of one cent were merged into one ordinary share with a nominal value of EUR 1. The ordinary shares with a nominal value of one cent of a number less than 100 and could therefore not be merged to form one new ordinary share with a nominal value of EUR 1, were extinguished.

35 In so far as concerns Decree No 104, the combined provisions of sections 2 and 5 thereof provided for the transfer, at 6:10 a.m. on 29 March 2013, of certain of Laïki’s assets and liabilities, including deposits of less than EUR 100000 and the debt connected with ELA, to BoC. Deposits of more than EUR 100000 remained with Laïki, pending its liquidation.

36 Following amendments to Decree No 104 on 30 July 2013, approximately 18% of the new share capital of BoC was granted to Laïki during 2013.

37 After the adoption of Decrees No 96, 97, 103 and 104 (together, ‘the harmful decrees’), the Commission, the ECB and the IMF embarked upon new discussions with the Cypriot authorities with a view to finalising an MoU.

D. Grant of financial assistance to the Republic of Cyprus

38 By declaration of 12 April 2013, firstly, the Euro Group welcomed an agreement reached between the Cypriot authorities, on the one hand, and the IMF, the Commission and the ECB, on the other hand. It stated that, in the light of that agreement, the necessary elements were in place to launch the national procedures required for the formal approval of the agreement on the financial assistance requested by the Republic of Cyprus. It also noted that it expected that the ESM Board of Governors would be in a position to approve that agreement by 24 April 2013, subject to completion of national procedures. Secondly, the Euro Group noted that the Cypriot authorities had implemented decisive resolution, restructuring and recapitalisation measures seeking to remedy the fragile and unique situation of the Cypriot financial sector.

39 During the hearing of 24 April 2013, firstly, the ESM Board of Governors confirmed, first, that the Commission and the ECB had been entrusted with carrying out the assessments referred to in Article 13(1) of the ESM Treaty and, secondly, that the Commission had been entrusted, in liaison with the ECB and the IMF, with the negotiation of the MoU with the Republic of Cyprus. Secondly, it decided to grant stability support to the Republic of Cyprus in the form of a financial assistance facility (‘FAF’) in accordance with the proposal of the EMS’s Managing Director. Thirdly, it approved a new draft MoU negotiated, on the one hand, by the Commission, in liaison with the ECB and the IMF, and, on the other hand, by the Republic of Cyprus. Fourthly, it requested the Commission to sign the MoU on behalf of the ESM.

40 On 25 April 2013, acting under Article 136(1) TFEU, the Council of the European Union adopted Decision 2013/236/EU addressed to Cyprus on specific measures to restore financial stability and sustainable growth (OJ 2013 L 141, p. 32). That decision provides for a series of ‘measures and outcomes’ with a view to correcting the budget deficit of the Republic of Cyprus and to restoring the soundness of the latter’s financial system.

41 On 26 April 2013, the new MoU (‘the MoU of 26 April 2013’) was signed by the vice-president of the Commission, on behalf of the ESM, by the Minister for Finance of the Republic of Cyprus and by the Governor of the CBC.

42 Under the heading ‘Restructuring and resolution of [the banks concerned]’, paragraphs 1.23 to 1.28 of that MoU state: ‘1.23 The accounting and economic value assessment mentioned has revealed that the two largest banks of Cyprus were insolvent. To address this situation the government has implemented a far reaching resolution and restructuring plan. In order to prevent the build-up of future imbalances and to restore the viability of the sector, while preserving competition, a fourfold strategy has been adopted which does not involve taxpayers’ money. 1.24 First, all Greek-related assets (including shipping loans) and liabilities were carved-out, estimated in the adverse scenario respectively at EUR 16.4 and 15 billion. The Greek assets and liabilities were acquired by Piraeus Bank, the restructuring of which will be dealt with by the Greek authorities. The carve-out was based on an agreement signed on 26 March 2013. With the book value of the assets at EUR 19.2 billion, the carve-out has substantially reduced the cross exposures between Greece and Cyprus. 1.25 With respect to the UK branch of [Laïki], all the deposits were transferred to the UK subsidiary of [BoC]. The associated assets were folded into [BoC]. 1.26 Second [BoC] is taking over — via a purchase and assumption procedure — almost the entire Cypriot assets of [Laïki] at fair value, as well as the latter’s insured deposits and [ELA] exposure at nominal value. The uninsured deposits of [Laiki] will remain in the legacy entity. The aim is for the value of the transferred assets to be higher than the transferred liabilities with the difference corresponding to the recapitalisation of [BoC] by [Laïki] amounting to 9% of the risk-weighted assets transferred. [BoC] is being recapitalised to reach a core tier one ratio of 9% under the adverse scenario of the stress test by the end of the programme, which should help to restore confidence and normalise funding conditions. The conversion of 37.5% of the uninsured deposits in [BoC] into class A shares with full voting and dividend rights provides the largest part of the capital needs with additional equity contributions from the legacy entity of [Laiki]. Part of the remaining uninsured deposits of [BoC] will be frozen temporarily … . 1.27 Third, to ensure that the capitalisation targets are met, a more detailed and updated independent valuation of the assets of [the banks concerned] will be completed, as required by the bank resolution framework, by the end of June 2013. To this end, no later than mid-April 2013, the terms of reference of the independent valuation exercise will be agreed in consultation with the [European Commission], the ECB and the IMF. Following that valuation, and if required, an additional conversion of uninsured deposits into class A shares will be undertaken to ensure that the core tier one capital target of 9% under stress by end-programme can be met. Should [BoC] be found to be overcapitalised relative to the target, a share-reversal process will be undertaken to refund depositors by the amount of overcapitalisation. 1.28 Finally, given the systematic importance of [BoC], it is important that the operations of [Laïki] are quickly integrated, operational efficiency is improved, the recovery of non-performing loans is optimised with the work-out implemented by the going concern entity and the funding conditions are progressively normalised. In order to achieve these goals and to ensure that [BoC] can operate with maximum safeguards to preserve stability and continued viability during a transition period, the CBC, following consultation with the Ministry of Finance, will appoint a new Board of Directors and an acting Chief Executive Officer until [BoC]’s new shareholders are organised in a general meeting. The CBC will require the Board of Directors to prepare a restructuring plan defining the bank’s business objectives and credit policies by end-September 2013. To ensure that normal business activities are not affected, institutional arrangements will be designed by end-June 2013 in accordance with Cypriot law to insulate [BoC] from reputational and governance risks.’

43 On 30 April 2013, the Cypriot Parliament approved the MoU of 26 April 2013.

44 On 8 May 2013, the ESM, the Republic of Cyprus and the CBC concluded the agreement relating to FAF. That same day, the ESM board of directors approved that agreement, and a proposal relating to the arrangements for payment to the Republic of Cyprus of a first tranche of aid amounting to EUR 3 billion. That tranche was divided into two disbursements. The first, of EUR 2 billion, was made on 13 May 2013. The second, of EUR 1 billion, was made on 26 June 2013.

45 By a statement of 13 May 2013, the Euro Group welcomed the decision of the ESM Board of Governors to approve the first tranche of the financial assistance and confirmed that the Republic of Cyprus had implemented the measures agreed in the MoU of 26 April 2013.

46 By statement of 13 September 2013, the Euro Group welcomed, first, the conclusion of the first review mission of the Commission, the ECB and the IMF and, secondly, the fact that BoC had been taken out of resolution on 30 July 2013. Moreover, the Euro Group expressed its support for the payment of a second tranche of aid. That payment, of EUR 1.5 billion, was made on 27 September 2013.

II. Procedure and forms of order sought

47 By application lodged at the General Court Registry on 20 December 2013, Dr. K. Chrysostomides & Co. LLC and the other applicants whose names are included in the annex brought the present action.

48 In their application, the applicants claim that the Court should: – principally, order the defendants to pay them the sums shown in the annex to this application plus interest accruing from 16 March 2013 until the judgment of the Court; – in the alternative, find that the European Union and/or the defendants have incurred non-contractual liability and determine the procedure to be followed in order to establish the recoverable loss which they actually suffered; – order the defendant to pay the costs.

49 In their application, the applicants also made a request for priority treatment of the present case, in accordance with Article 55(2) of the Rules of Procedure of the General Court of 2 May 1991.

50 By separate documents lodged at the Court Registry on 14 July 2014, 16 July 2014 and 18 August 2014 respectively, the Council, the ECB and the Commission raised objections of inadmissibility under Article 114 of the Rules of Procedure of 2 May 1991.

51 In its objection of inadmissibility, the Council claims that the Court should: – dismiss the application as inadmissible; – order the applicants to pay the costs.

52 In its objection of inadmissibility, the ECB claims that the Court should: – dismiss the application as inadmissible or as manifestly lacking any foundation in law within the meaning of Article 111 of the Rules of Procedure of 2 May 1991; – order the applicants to pay the costs.

53 In its objection of inadmissibility, the Commission claims that the Court should: – principally, dismiss the application as manifestly inadmissible; – in the alternative, dismiss the application as manifestly lacking any foundation in law within the meaning of Article 111 of the Rules of Procedure of 2 May 1991; – in any event, order the applicants to pay the costs.

54 The applicants submitted their observations on the objection on 2 October 2014. In those observations, the applicants claim that the Court should: – dismiss the objections of inadmissibility; – in the alternative, reserve the pleas of inadmissibility for the final judgment; – grant the forms of order sought in the application.

55 By order of 3 June 2015, the General Court (First Chamber) decided to reserve the pleas of inadmissibility raised by the defendants for the final judgment, in accordance with Article 114(4) of the Rules of Procedure of 2 May 1991.

56 On 28 July 2015, 30 July 2015 and 31 July 2015 respectively, the Council, the ECB and the Commission lodged defences.

57 The Council contends that the Court should: – dismiss the application as inadmissible; – in the alternative, dismiss the application as manifestly unfounded; – order the applicants to pay the costs.

58 The ECB contends that the Court should: – dismiss the application as inadmissible; – in the alternative, dismiss the application as unfounded; – order the applicants to pay the costs.

59 The Commission contends that the Court should: – dismiss the application as inadmissible and/or unfounded; – order the applicants to pay the costs.

60 On 23 September 2015, the Court decided, pursuant to Article 83(1) of the Rules of Procedure of the General Court, that a second exchange of pleadings was unnecessary.

61 By document lodged with the Court Registry on 14 October 2015, the applicants requested, pursuant to Article 83(2) of the Rules of Procedure, permission to lodge a reply.

62 By decision of 28 October 2015, the Court granted that request.

63 On 9 December 2015, the applicants lodged their reply. On 29 January 2016, 11 February 2016 and 12 February 2016 respectively, the Council, the Commission and the ECB submitted their rejoinders.

64 By letter lodged at the Court Registry on 2 March 2016, the applicants requested, first, a hearing and, secondly, that the present case and Case T‑786/14, Bourdouvali and Others v Council and Others, be joined for the purposes of the oral part of the procedure. The defendants informed the Court that they had no objection to the cases being joined as requested.

65 On 18 April 2016, pursuant to Article 69(d) of the Rules of Procedure, the President of the First Chamber of the Court decided to stay the present proceedings pending the adoption of the final decision in Cases C‑8/15 P, Ledra Advertising v Commission and ECB, C‑9/15 P, Eleftheriou and Others v Commission and ECB, C‑10/15 P, Theophilou and Theophilou v Commission and ECB, C‑105/15 P, Mallis and Malli v Commission and ECB, C‑106/15 P, Tameio Pronoias Prosopikou Trapezis Kyprou v Commission and ECB, C‑107/15 P, Chatzithoma v Commission and ECB, C‑108/15 P, Chatziioannou v Commission and ECB, and C‑109/15 P, Nikolaou v Commission and ECB.

66 Following the judgments of 20 September 2016, Ledra Advertising and Others v Commission and ECB (C‑8/15 P to C‑10/15 P, EU:C:2016:701), and Mallis and Others v Commission and ECB (C‑105/15 P to C‑109/15 P, EU:C:2016:702), by which the Court disposed of the proceedings referred to in paragraph 65 above, the present proceedings were resumed.

67 On 27 October 2016, in the context of the measures of organisation of procedure provided for in Article 89 of its Rules of Procedure, the Court requested the parties to submit observations relating to the conclusions they drew from those two judgments for the present dispute. The parties complied with that request within the prescribed period.

68 Following a change in the composition of the Chambers of the Court, pursuant to Article 27(5) of the Rules of Procedure, the Judge Rapporteur was assigned to the Fourth Chamber, to which the present case was, consequently, allocated.

69 On 27 April 2017, the President of the Fourth Chamber of the Court decided to join the present case with Case T‑786/13, Bourdouvali and Others v Council and Others, for the purposes of the oral part of the procedure.

70 On 17 May 2017, on a proposal from the Fourth Chamber, the Court decided, pursuant to Article 28 of the Rules of Procedure, to refer the present case to a chamber sitting in extended composition.

71 On 18 May 2017, acting on a report of the Judge-Rapporteur, the Court decided to open the oral part of the procedure but did not accede to the applicants’ request for priority treatment. On that same date, the President of the Fourth Chamber of the Court fixed the hearing for 12 July 2017.

72 On 14 June 2017, in the context of the measures of organisation of procedure laid down in Article 89 of the Rules of Procedure, the Court put written questions to the parties. The latter replied within the prescribed period.

73 By letter of 20 June 2017, the applicants requested the postponement of the hearing, scheduled for 12 July 2017 (see paragraph 71 above). On 26 June 2017, the President of the Fourth Chamber granted that request and postponed the hearing until 11 September 2017.

74 The parties presented oral argument and replied to the questions put by the Court at the hearing on 11 September 2017.

III. Law

75 Upon the entry into force of the harmful decrees (see paragraphs 30 to 36 above), the applicants were either depositors with the banks concerned, or shareholders thereof.

76 The application of the measures provided for by the harmful decrees, as amended on 30 July 2013 (‘the harmful measures’), caused a substantial reduction in the value of the applicants’ deposits, shares and bonds, the precise figures for which were supplied by the applicants in an annex to the application.

77 First of all, the applicants claim that the adoption of the harmful measures is attributable to the defendants. The latter adopted certain acts (‘the contested acts’), by which they, firstly, obliged the Republic of Cyprus to adopt the harmful measures in order to receive assistance which was indispensable for it, secondly, approved the adoption of those measures and, thirdly, promoted or made permanent the implementation of those measures. At issue, more particularly, are the following acts: – the Euro Group Statement of 25 March 2013; – the ‘Euro Group Agreement of 25 March 2013’; – the ‘decision of the Governing Council of the ECB of 21 March 2013 to demand payment of ELA on 26 March [2013] unless a rescue package is agreed’; – the ‘ECB decisions to continue the granting of ELA’; – the negotiation and conclusion, by the Commission, of the MoU of 26 April 2013; – the other acts, by which the defendants endorsed and approved the harmful measures, namely the Euro Group statements of 12 April, 13 May and 13 September 2013, the ‘Commission’s findings that the measures adopted by the Cypriot authorities complied with conditionality’, Decision 2013/236 and the approval, by the Commission and the ECB, of the payment of various tranches of FAF to the Republic of Cyprus.

78 Next, the applicants claim that the contested acts were adopted without taking into account the interests of the closed group consisting of depositors or shareholders of the banks concerned, in flagrant and serious violation of EU law.

79 Finally, first, the applicants note that there is a direct link between the harmful measures and the losses they suffered. Secondly, they request to be compensated for those losses.

A. The jurisdiction of the General Court

80 The defendants challenge the jurisdiction of the Court to hear the present action.

81 It should be noted that, under Article 268 and the second and third paragraphs of Article 340 TFEU, in the case of non-contractual liability, the General Court has jurisdiction only in disputes relating to compensation for damage caused by the ECB, the institutions of the Union for the purposes of the second paragraph of Article 340 TFEU or by their servants in the performance of their duties (see, to that effect, order of 1 April 2008, Ayyanarsamy v Commission and Germany, T‑412/07, not published, EU:T:2008:84, paragraph 24).

82 According to the case-law, the term ‘institution’ used in the second paragraph of Article 340 TFEU must not be understood as referring only to the institutions of the Union listed in Article 13(1) TEU (see, to that effect, judgment of 2 December 1992, SGEEM and Etroy v EIB, C‑370/89, EU:C:1992:482, paragraph 16). That term also covers, with regard to the system of non-contractual liability established by the TFEU, all other EU bodies established by the Treaty and intended to contribute to achieving the EU’s objectives. Consequently, measures taken by those bodies in the exercise of the powers assigned to them by EU law are attributable to the EU, according to the general principles common to the Member States referred to in the second paragraph of Article 340 TFEU (see, to that effect, judgment of 10 April 2002, Lamberts v European Ombudsman, T‑209/00, EU:T:2002:94, paragraph 49).

83 It follows that the Court cannot hear a claim for compensation that is directed against the EU and based on the unlawfulness of an act or conduct the author of which is not the ECB, or an institution of the EU, within the meaning of the second paragraph of Article 340 TFEU, or one of their servants in the performance of its duties. Therefore, the damage caused by the national authorities in the exercise of their own powers can only give rise to liability on the part of the latter and the national courts retain sole jurisdiction to order compensation for such damage (see, to that effect, judgments of 7 July 1987, L’Étoile commerciale and CNTA v Commission, 89/86 and 91/86, EU:C:1987:337, paragraph 17, and the case-law cited, and of 4 February 1998, Laga v Commission, T‑93/95, EU:T:1998:22, paragraph 47).

84 By contrast, it is not excluded that the Court may hear an action for compensation for damage caused by an act or conduct, by which a national authority ensures the implementation of EU legislation. In such a case, it is necessary to determine, in order to establish the jurisdiction of the Court, whether the unlawful conduct alleged in support of the application for compensation is in fact the responsibility of an EU institution, body, office or agency or of one of its servants in the performance of its duties and cannot be regarded, in reality, as attributable to the national authority at issue (see, to that effect and by analogy, judgment of 26 February 1986, Krohn Import-Export v Commission, 175/84, EU:C:1986:85, paragraph 19). Such is the case where the national authorities have no discretion in the implementation of EU legislation vitiated by such unlawfulness (see, to that effect, judgment of 11 January 2002, Biret International v Council, T‑174/00, EU:T:2002:2, paragraph 33 and the case-law cited).

85 Moreover, the Court has jurisdiction to hear an action for compensation for damage caused by the unlawful acts or conduct of the Commission or the ECB in relation to the tasks assigned to them in the context of the ESM Treaty (see, to that effect, judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraphs 54 to 60).

86 In the present case, without prejudice to determining the cause of the harm alleged, it must be noted that it is in the application of the harmful measures that the immediate cause of the financial loss that the applicants allege to have suffered is liable to be found, either as shareholders of or as depositors in the banks concerned. As the applicants acknowledge, those measures were introduced by means of the harmful decrees. The harmful decrees, published on 29 March 2013 (see paragraph 30 above) and amended on 30 July 2013, were adopted by a Cypriot authority, the Governor of the CBC, in accordance with a Cypriot law, the Law of 22 March 2013. The adoption of that law and of those decrees preceded the signing of the MoU of 26 April 2013 and was not formally required by an act of the Union, unlike, for example, a national measure implementing a directive. The harmful decrees are therefore not, formally, attributable to the Union.

87 In that regard, firstly, the defendants contend that the adoption of the harmful decrees is also not, in reality, attributable to the Union and cannot therefore incur its liability. Those decrees are exclusively attributable to the Cypriot authorities, who adopted them unilaterally, in the exercise of their sovereign power. The Commission and the ECB point out that the MoU of 26 April 2013 mentions the harmful measures for historical and descriptive purposes, since the grant of FAF was made subject only to the adoption of future measures. As regards the technical advice provided in the course of national proceedings, the Commission and the ECB note that it does not incur the liability of the Union.

88 Secondly, the Council and the Commission point out that the Euro Group is an informal Inter-Governmental Meeting whose statements, devoid of legal effects, are attributable to each Member State represented and cannot, consequently, incur the liability of the Union.

89 Thirdly, the ECB notes that ELA falls within the competence of the national central banks of the Eurosystem. The ECB merely determines whether it interferes with the tasks and objectives of the European System of Central Banks (ESCB). In order to do so, since it does not have the ability to assess the solvency of Cypriot banks, the ECB was obliged to recognise the assessments made by the CBC, which relied heavily on the prospect of the imminent adoption of a support programme. Therefore, the ECB should inevitably have considered that its approach would have to be different if no programme of that type were adopted.

90 In any event, on 21 March 2013, the ECB did not adopt a decision under Article 14.4 of Protocol No 4, of 30 March 2010, of the Statute of the [ESCB] and the ECB (OJ 2010 C 83, p. 230) (‘the ECB Statute’), but issued a mere declaration of intent without any legal effects and which could be freely amended, even if that statement could have increased the burden on the Cypriot authorities due to the poor state of Cypriot public finances and banks.

91 Fourthly, the Commission maintains that neither the ESM Treaty nor the case-law oblige it to guarantee that everything covered by that treaty complies with EU law. However, since it retains its role as guardian of the Treaties, enshrined in Article 17 TEU, in the context of the ESM, the Commission ensured compliance of the MoU of 26 April 2013 with EU law. It is apparent from the case-law that Article 17 TEU does not confer rights on individuals and that an infringement thereof does not incur the liability of the Union.

92 The applicants respond that the Court has jurisdiction to hear the present action.

93 Firstly, they claim that, even if the harmful decrees are formally sovereign and unilateral acts of the Republic of Cyprus, the harmful measures are, in reality, attributable to the defendants. In its statement of 25 March 2013, the Euro Group decided to make FAF subject to the adoption of those measures and, given the ‘demand of the ECB for the repayment of the ELA on 26 March 2013’, FAF would have been indispensable to avoid the bankruptcy of the Republic of Cyprus, whose discretion was illusory. Since the Euro Group required the adoption of the harmful measures, the fact that they were adopted before the signing of the MoU of 26 April 2013 is not relevant for the purposes of their attributability to the Union. Conversely, the fact that the harmful measures were identified in the MoU of 26 April 2013 and that the implementation thereof was monitored by the Commission, in accordance with Article 1(2) of Decision 2013/236 and the substance of Article 2(6) of that decision, show that they are conditions to which the grant of FAF was made subject.

94 Secondly, the applicants maintain that the Euro Group can incur the liability of the Union, since it is a body established by primary law and its tasks are performed in the context of the monetary union, which falls under the exclusive competence of the Union. Moreover, since the Euro Group generally met in the evening of the Ecofin Council meeting and since it brings together Member States representing 215 of the 255 votes which were necessary to achieve the qualified majority at the time of the facts, its decisions are always followed by the Council.

95 The applicants add that a non-binding act, such as a publication, may incur the liability of the Union. In any event, the Euro Group Statement of 25 March 2013 is binding. The Euro Group decided to make FAF subject to precise conditions, which the Cypriot authorities, the ESM and the EU institutions concerned considered to be binding. In particular, since the ESM Board of Governors has the same membership as the Euro Group, it could, according to the applicants, only endorse that decision, or was even bound by it. That is, moreover, apparent from the statement of 25 March 2013 itself, and from the Parliament resolution of 13 March 2014 on the enquiry on the role and operations in the euro area-programme countries of the troika, namely the Commission, the ECB and the IMF. The applicants consider in that regard that the case-law is applicable by analogy to the present case, in accordance with which, where an EU act authorises a Member State to take action, it directly affects the legal situation of the individuals concerned if the exercise by the Member State of its discretionary power is not in doubt.

96 Moreover, the applicants maintain that the grant of FAF falls within the context of the Union. First of all, that grant was decided by the Euro Group, an EU body, in order to achieve the objectives of the Union. Next, FAF was formally granted by the ESM, a mechanism the need for which was decided by the European Council, the objectives of which are closely aligned with those of the Union, and which is under the control and supervision of the Commission and the ECB. Finally, FAF was accompanied by Decision 2013/236, adopted the day before the signing of the MoU of 26 April 2013.

97 Thirdly, the applicants state that, in accordance with Article 14.4 of the ECB Statute, the ECB must be informed about all ELA operations and has the right to veto such operations. The fact that the ECB does not have any competence to verify the solvency of banks does not mean that its decision could be arbitrary.

98 Fourthly, the applicants claim that the liability of the Union is incurred where, acting in the context of the ESM, its institutions infringe EU law, cooperate in adopting an act taken in breach of that law, or fail to ensure compliance of the act in question with that law. The liability of the Union is also incurred on the ground that the defendants approved the harmful measures.

99 The dispute between the parties raises, in essence, two questions, which the Court will examine in turn. First, the Court is to determine whether the harmful measures, formally attributable to the Republic of Cyprus, are, in reality, attributable to the defendants in whole or in part (see paragraphs 101 to 193 below).

100 Secondly, the Court is to determine whether certain acts and conduct of the defendants could, irrespective of the question to whom the harmful measures may be attributed, give rise to non-contractual liability on the part of the Union (see paragraphs 194 to 207 below).

1. The attributability of the harmful measures to the defendants

101 First of all, it should be noted that the assessment of whether a contested act or contested conduct can be attributed to the defendants may be relevant, first, in the context of the assessment of the Court’s jurisdiction, in so far as that Court does not have jurisdiction to hear actions for compensation for damage imputable not to the ECB, the institutions of the Union within the meaning of the second paragraph of Article 340 TFEU or their servants in the performance of their duties, but to a Member State or other entity external to the EU and, secondly, in the context of the examination of the substance of an action, given that it is one of the elements allowing it to be determined whether one of the three conditions for the EU to incur liability is satisfied, namely the existence of a causal link between the conduct alleged against the ECB, the EU institutions within the meaning of the second paragraph of Article 340 TFEU or their servants in the performance of their duties and the damage alleged (see, to that effect, judgment of 3 May 2017, Sotiropoulou and Others v Council, T‑531/14, not published, EU:T:2017:297, paragraph 57). In the present case, in the light in particular of the parties’ arguments (see paragraphs 87 to 98 above), the Court considers that it is necessary to examine the question of attribution in the context of the examination of the Court’s jurisdiction.

102 The applicants claim, in essence, that the defendants, in reality, by means of the contested acts (see paragraph 77 above), obliged the Republic of Cyprus to adopt the harmful measures. That would mean that the losses which the applicants, in their capacity as shareholders or depositors of the banks concerned, suffered as a result of those measures can be considered to have been caused by EU institutions within the meaning of the second paragraph of Article 340 TFEU, or their servants in the performance of their duties, which the defendants dispute.

103 It is necessary, therefore, to examine, in accordance with the case-law cited in paragraphs 81 to 85 above, whether the Council, the Commission, the ECB, and the Euro Group, to the extent that it can be considered to be an institution of the Union within the meaning of the second paragraph of Article 340 TFEU, required, by means of the contested acts (see paragraph 77 above), the adoption of the harmful measures (see paragraphs 104 to 182 below) and, where appropriate, whether the Republic of Cyprus had discretion to reject such a requirement (see paragraphs 183 to 191 below). In that regard, the Court states at the outset that the assessment of whether the contested acts are obligatory and of the economic and financial pressure to which the Republic of Cyprus was confronted relates to the determination of the latter’s discretion. Those questions will therefore, where appropriate, be examined in the part of the present judgment dedicated to that issue.

(a) The question whether the defendants, by means of the contested acts, required the adoption of the harmful measures

104 It is necessary to examine each of the contested acts (see paragraph 77 above) in order to determine whether it can be considered that, by one or more of them, the Council, the Commission, the ECB, and the Euro Group, to the extent that it can be considered to be an institution of the Union within the meaning of the second paragraph of Article 340 TFEU, required the adoption of the harmful measures by the Republic of Cyprus.

(1) The Euro Group Statement of 25 March 2013

105 The applicants claim, in essence, that, by its statement of 25 March 2013, the Euro Group made the grant of FAF subject to the adoption of the harmful measures.

106 Before examining the contents of that statement, it is necessary to determine whether the Euro Group can be considered to be an institution of the Union, within the meaning of the second paragraph of Article 340 TFEU. In accordance with the case-law cited in paragraph 82 above, it is only in that case that an act of the Euro Group, such as that statement, can incur the liability of the Union. In that regard, it should be noted that, as was stated in paragraph 82 above, the term ‘institution’ used in the second paragraph of Article 340 TFEU covers not only the institutions of the Union listed in Article 13(1) TEU, but also all other EU bodies established by the Treaty and intended to contribute to the achievement of the EU’s objectives.

107 The Council and the Commission consider, in essence, that the Euro Group is not an institution of the Union within the meaning of the second paragraph of Article 340 TFEU. In support of that contention, the Council relies, in particular, on paragraph 61 of the judgment of 20 September 2016, Mallis and Others v Commission and ECB (C‑105/15 P to C‑109/15 P, EU:C:2016:702), from which it is apparent that the Euro Group cannot be equated with a configuration of the Council or be classified as a body, office or agency of the European Union. In so far as the Euro Group is not a configuration of the Council or a body, office or agency of the Union, it cannot incur the non-contractual liability of the latter.

108 In that regard, it should be noted that, in paragraph 61 of the judgment of 20 September 2016, Mallis and Others v Commission and ECB (C‑105/15 P to C‑109/15 P, EU:C:2016:702), the Court took care to point out that the Euro Group could not be classified as a body, office or agency of the EU ‘within the meaning of Article 263 TFEU’.

109 The jurisdiction exercised by the Courts of the European Union in disputes relating to legality under Article 263 TFEU differs both with respect to its purpose and the pleas which may be raised from the jurisdiction they exercise in disputes relating to non-contractual liability under Articles 268 and 340 TFEU (see, to that effect and by analogy, judgment of 14 July 1961, Vloeberghs v High Authority, 9/60 and 12/60, EU:C:1961:18, paragraph 425). As the applicants note, the action for damages relating to the European Union’s non-contractual liability for actions or omissions on the part of its institutions was established as an independent form of judicial remedy, having its own particular place in the system of means of redress and subject to conditions for its use formulated in the light of its specific purpose (judgments of 28 April 1971, Lütticke v Commission, 4/69, EU:C:1971:40, paragraph 6; of 12 April 1984, Unifrex v Commission and Council, 281/82, EU:C:1984:165, point 11, and of 7 June 2017, Guardian Europe v European Union, T‑673/15, currently under appeal, EU:T:2017:377, point 53). Although actions for annulment provided for in Article 263 TFEU seek the abolition of a particular measure, actions for damages based on Article 340 TFEU seek compensation for damage caused by an institution (see, to that effect, judgments of 2 December 1971, Zuckerfabrik Schöppenstedt v Council, 5/71, EU:C:1971:116, paragraph 3, and of 18 September 2014, Georgias and Others v Council and Commission, T‑168/12, EU:T:2014:781, paragraph 32).

110 Therefore, irrespective of its status as a challengeable act amenable to an action for annulment under Article 263 TFEU, any act of an institution of the European Union, for the purposes of the second paragraph of Article 340 TFEU, of the ECB or one of their servants in the performance of their duties is, in principle, capable of forming the subject matter of an action for damages under Article 268 TFEU (see, to that effect, judgment of 18 December 2009, Arizmendi and Others v Council and Commission, T‑440/03, T‑121/04, T‑171/04, T‑208/04, T‑365/04 and T‑484/04, EU:T:2009:530, paragraph 65). Likewise, non-decision-making conduct capable of giving rise to the non-contractual liability of the European Union can form the basis for an action for damages, although it cannot be the subject of an action for annulment (see, to that effect, judgment of 15 January 2003, Philip Morris International v Commission, T‑377/00, T‑379/00, T‑380/00, T‑260/01 and T‑272/01, EU:T:2003:6, paragraph 123).

111 It follows that, in the system of legal remedies established by the FEU Treaty, actions for non-contractual liability pursue a compensatory purpose, intended in particular to guarantee effective judicial protection to an individual also against acts and conduct of the institutions of the European Union for the purposes of the second paragraph of Article 340 TFEU, of the ECB or one of their servants in the performance of their duties which cannot be the subject of an action for annulment under Article 263 TFEU. Therefore, in the light of the different and complementary purposes of those two types of action, it cannot be considered that the content of the concept of ‘institution’ for the purposes of the second paragraph of Article 340 TFEU is necessarily restricted to institutions, bodies, offices or agencies of the Union referred to in the first paragraph of Article 263 TFEU.

112 By contrast, the identification of EU entities which can be qualified as an ‘institution’ for the purposes of the second paragraph of Article 340 TFEU must be undertaken according to the criteria relevant to that provision, which are different from those governing the identification of bodies, offices or agencies referred to in the first paragraph of Article 263 TFEU. For the purposes of Article 263 TFEU, the relevant criterion relates to the power of the defendant entity to adopt acts intended to produce legal effects vis-à-vis third parties (see, to that effect, judgment of 23 April 1986, The Greens v Parliament, 294/83, EU:C:1986:166, paragraphs 23 to 25). In contrast, for the purposes of the second paragraph of Article 340 TFEU, it is necessary to determine whether the EU entity responsible for the act or conduct complained of was established by the Treaties and is intended to contribute to the achievement of the Union’s objectives (see, to that effect, judgment of 10 April 2002, Lamberts v European Ombudsman, T‑209/00, EU:T:2002:94, paragraph 49).

113 Article 137 TFEU and Protocol No 14, of 26 October 2012, on the Euro Group (OJ 2012 C 326, p. 283), annexed to the TFEU, make provision, inter alia, for the existence, the composition, the procedural rules and the functions of the Euro Group. In that last regard, Article 1 of that protocol provides that the Euro Group is to meet ‘to discuss questions related to the specific responsibilities [the ministers composing it] share with regard to the single currency’. Those questions concern, under Article 119(2) TFEU, the activities of the European Union for the purposes of the objectives set out in Article 3 TEU, which include the establishment of an economic and monetary union whose currency is the Euro. It follows that the Euro Group is a body of the Union formally established by the Treaties and intended to contribute to achieving the objectives of the Union. The acts and conduct of the Euro Group in the exercise of its powers under EU law are therefore attributable to the European Union.

114 Any contrary solution would clash with the principle of the Union based on the rule of law, in so far as it would allow the establishment, within the legal system of the European Union itself, of entities whose acts and conduct could not result in the European Union incurring liability.

115 In those circumstances, it is necessary to determine whether the Euro Group, by its statement of 25 March 2013, required the Republic of Cyprus to adopt the harmful measures. In that regard, first, it should be noted that, in its statement of 25 March 2013, the Euro Group gave, in a very generic way, an account of certain measures which were agreed at a political level with the Republic of Cyprus, in order to stabilise the country’s financial situation, and announced or encouraged certain future measures.

116 By contrast, the Euro Group did not take any definite decision with regard to the granting of FAF, or with regard to the conditions which the Republic of Cyprus should satisfy to benefit therefrom. In particular, the Euro Group did not state either that FAF would be granted to the Republic of Cyprus only if the latter implemented the harmful measures, or that the plans for restructuring the financial sector as specified in the annex to the statement at issue were regarded as being part of the macroeconomic adjustment programme which the Republic of Cyprus would be required to comply with under Article 12(1) of the ESM Treaty.

117 Secondly, it is apparent from the statement at issue that the Euro Group considered that it did not have the authority to grant or refuse the assistance requested, but that that authority came within the competence of the ESM Board of Governors. It must therefore be concluded that, contrary to the applicants’ claims and despite the existence of statements in its annex which could be regarded as categorical, including those according to which, first, Laïki is to be immediately resolved, with full contribution of shareholders, bond holders and uninsured depositors, and, secondly, BoC is to be recapitalised through a conversion of uninsured deposits into equity with full contribution of shareholders and bond holders (see paragraph 27 above), the Euro Group statement of 25 March 2013 was of a purely informative nature. The Euro Group merely informed the public of the existence of certain policy agreements and expressed its opinion on the likelihood of the grant of FAF by the ESM (see, to that effect, order of 16 October 2014, Mallis and Malli v Commission and ECB, T‑327/13, EU:T:2014:909, paragraphs 56 to 61).

118 Therefore, it cannot be considered that, by its statement of 25 March 2013, Euro Group required the Republic of Cyprus to adopt the harmful measures.

(2) ‘The Euro Group Agreement of 25 March 2013’

119 As they confirmed in their reply to the Court’s measures of organisation of procedure, the applicants consider also that the Euro Group Statement of 25 March 2013 draws attention to the existence of an agreement of the same date, according to which the members of the Euro Group previously agreed that FAF would be granted to the Republic of Cyprus only if the latter adopted the harmful measures, without any possibility of negotiating them.

120 The existence of such an agreement is not clearly and unequivocally apparent from the wording of the Euro Group Statement of 25 March 2013. Nevertheless, the applicants deduce the existence of that agreement from certain documents in the case file, including a letter sent by the German Minister of Economy to the German Parliament on 13 April 2013, with a view to obtaining approval of the ESM decision to grant FAF to the Republic of Cyprus. That letter contains the following passage: ‘The Euro Group drew the conclusion that against the background of the refusal of the initial agreement by the Parliament of Cyprus and the uncertainty of developments taking place in the meantime, especially in the Cyprus banking sector, a potential programme could only be considered after implementation of the following measures: – dissociation of the Greek branches of the Cypriot banking sector: the largest Greek branches of the Cypriot banks are taken over by the Greek banking sector; – winding up of [Laïki] and restructuring of [BoC] without the use of funds from a potential assistance programme … . The owners and other creditors of the banks are thus involved in the aforesaid restructuring measures as follows: – the owners and subordinate loan and bond creditors shall bear losses proportional to their shares and in their entirety; – deposits at Laïki … of above EUR 100000 and not subject to bank deposit protection shall contribute to covering the financial needs of winding up measures. Deposits of under EUR 100000 and subject to bank deposit protection shall be transferred to [BoC]; – value-containing assets of Laïki … shall be transferred to [BoC]. The assets transferred should have a value superior to the liabilities transferred, so that Laïki … thus also contributes to the strengthening of the capital of [BoC]; – 37.5% of the deposits in [BoC] not subject to deposit protection shall be transformed into bank shares. A further 22.5% [of those deposits] can also be transformed into shares should the need arise. The target is to achieve a hard core-capital quota of 9% at [BoC].’

121 It is apparent from that passage that the German Minister of Economy informed the German Parliament of the existence of an agreement, between the members of the Euro Group, making the grant of FAF subject to the adoption of the harmful measures — or, at least, to measures which are very similar to those measures. The existence of such an agreement is corroborated by several statements made by the Cypriot authorities and witnesses before a commission of inquiry of the Cypriot Parliament.

122 It must be considered, firstly, that there was an agreement (‘the agreement on conditionality’) between the representatives of the MSCE according to which FAF would be granted to the Republic of Cyprus only if it adopted the harmful measures (or, at the very least, measures which are very similar to those measures), secondly, that that agreement was informal, in so far as it was not concluded on the basis of a given procedure or of a specific legal basis, thirdly, that that agreement was concluded either during a Euro Group meeting of 25 March 2013, or around that date, and, fourthly, that the German Minister of Economy considered that the agreement at issue had been concluded by the Euro Group.

123 Firstly, it must be noted that, in accordance with the combined provisions of Article 137 TFEU and Article 1 of Protocol No 14 on the Euro Group, the Euro Group is an informal meeting of Ministers of the MSCE, whose objective is to facilitate the exchange of views about questions related to the specific responsibilities they share with regard to the single currency (see, to that effect, order of 16 October 2014, Mallis and Malli v Commission and ECB, T‑327/13, EU:T:2014:909, paragraph 41). That protocol states that Euro Group meetings are to be prepared by the representatives of the Ministers with responsibility for finance of the MSCE and the Commission. In the light of those provisions, it is reasonable to conclude that the Euro Group is, in principle, composed of Ministers with responsibility for finance of the MSCE. As was confirmed by the Council at the hearing, that was so in the present case, since the ministers of the MSCE present at the Euro Group meeting of 25 March 2013 are those responsible for finance.

124 Secondly, the ESM Board of Governors is, in accordance with Article 5(1) of the ESM Treaty, made up of the finance ministers of the MSCE.

125 Therefore, as the applicants correctly point out, the members of the ESM Board of Governors and the ministers gathered within the Euro Group are, in principle and in any event in the present case, the same natural persons. It follows that it is, in practice, impossible to determine a priori whether an ‘informal’ agreement, such as the agreement on conditionality, was concluded by those natural persons as representatives of the MSCE within the Euro Group or as members of the ESM Board of Governors.

126 It should be noted that FAF was granted by the ESM, in accordance with the rules and procedures provided for by the ESM Treaty, and not by the Euro Group.

127 Therefore, it must be considered that the agreement on conditionality was concluded by the finance ministers of the MSCE meeting on 25 March 2013 as members of the ESM Board of Governors, and not as members of the Euro Group. The mention of the Euro Group in the letter of the German Minister of Economy referred to in paragraph 120 above can be explained by the fact that the representatives of the MSCE at the Euro Group who met on that date are, in principle, the same natural persons as the members of the ESM Board of Governors.

128 In that regard, it should be added that, by creating the ESM, the MSCE decided to grant that international organisation, which has legal personality, specific and exclusive powers in relation to the grant of financial assistance to MSCE in difficulty. The exercise of those powers is subject to the rules of public international law specific to an organisation for intergovernmental cooperation, EU law being applicable only in so far as the ESM Treaty specifically provides for that application. The MSCE therefore clearly stated that the grant of FAF lies outside of both the sphere of activities of the European Union and its regulatory framework.

129 The MSCE, admittedly, called on EU institutions, namely the Commission and the ECB, to perform certain tasks on behalf of the ESM. However, the duties conferred on those institutions in the context of the ESM Treaty do not entail any power to make decisions of their own and the activities pursued by those institutions within the ESM Treaty commit the ESM alone (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 161, and of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 53).

130 As regards the Euro Group, unlike the Commission and the ECB, it is not mentioned in the ESM Treaty as a body with the power to perform tasks on behalf of the ESM.

131 There are therefore no grounds for granting the finance ministers of the MSCE meeting within the Euro Group as members of the latter the power to anticipate or to determine the decisions adopted by the ESM Board of Governors, since that power can be granted to them only as members of that board, even if the agreements relating to the conditions for granting FAF are decided in the context of a Euro Group meeting.

132 Therefore, it must be concluded that the agreement on conditionality was concluded by the representatives of the MSCE as members of the ESM Board of Governors.

133 In the light of the above, it cannot be concluded that the Euro Group, by means of the agreement on conditionality, required the adoption of the harmful measures.

(3) ‘The decision of the Governing Council of the ECB of 21 March 2013 to demand payment of ELA on 26 March [2013] unless a rescue package was agreed’

134 The applicants also refer to the press release of the ECB of 21 March 2013 (see paragraph 23 above). As they stated during the hearing, the applicants consider that that press release announces the decision of the Governing Council of the ECB to demand payment of ELA on 26 March 2013, unless a rescue package was agreed.

135 To recall, the press release at issue is worded as follows: ‘The Governing Council of the [ECB] decided to maintain the current level of [ELA] until … 25 March 2013. Thereafter, [ELA] could only be considered if an [EU or IMF] programme is in place that would ensure the solvency of the concerned banks.’

136 In the first place, it is necessary to determine the scope of that press release. For that purpose, the main rules governing ELA must be noted.

137 It is apparent from the agreement of 7 February 2013 on ELA that ELA is defined as the provision of ‘central bank money’ or as any other assistance which could result in an increase in ‘central bank money’ to a financial institution, or to a group of financial institutions, confronted with liquidity problems, without those operations being part of the single monetary policy.

138 According to that agreement, the responsibility for ELA lies with the national central bank concerned, which assumes the costs and the risks. ELA is therefore, in principle, based on a national legal basis. In the present case, it is apparent from the ECB’s plea of inadmissibility and from its response to the Court’s measures of organisation of procedure that ELA was granted to the banks concerned by the CBC on the basis of section 6(2)(e) and section 46(3) of O peri tis Kentrikis Trapezas tis Kyprou nomos tou 2002 (No. 138(I)/2002) (Law 138(I)/2002 on the CBC of 2002). In accordance with the first of those provisions, the CBC is required, in particular, to ensure the stability of the financial system. As regards the second of those provisions, it empowers the CBC to ‘grant advances against collateral security, or make loans against collateral security to banks for fixed periods and for purposes which [it] may designate’.

139 As is apparent from the letter of the CBC of 25 July 2017 annexed to the ECB’s response to the Court’s measures of organisation of procedure, in a document of 31 January 2011, the Governing Council of the CBC specified the principles and procedures governing the grant of ELA. That document indicates, in particular, that the CBC may apply section 46(3) of Law 138(I)/2002 on the CBC in order to provide temporary assistance to a supervised credit institution which is solvent, but illiquid. That document specifies that such assistance seeks to safeguard financial stability, may be considered only in the event of a potential systemic risk and is in general granted only in exceptional circumstances.

140 It is also apparent from that document that, as the applicants acknowledge, ELA does not come within the single monetary policy and thus falls within the scope of Article 14.4 of the ECB Statute. That provision is worded as follows: ‘National central banks may perform functions other than those specified in [the ECB Statute] unless the Governing Council finds, by a majority of two thirds of the votes cast, that these interfere with the objectives and tasks of the ESCB. Such functions shall be performed on the responsibility and liability of national central banks and shall not be regarded as being part of the functions of the ESCB.’

141 In a document entitled ‘ELA Procedures’ and invoked in support of its plea of inadmissibility, the ECB states that, under that provision, the Governing Council of the ECB was assigned the responsibility of restricting ELA operations if it considers that they interfere with the objectives and tasks of the ESCB. For that purpose, the decision of the Governing Council of the ECB of 3 November 2011 on ELA procedures and the agreement of 7 February 2013 on ELA (see paragraph 137 above) provide for an information and cooperation system between the national central banks and the ECB.

142 Amongst the information which the national central bank must supply, for that purpose, to the ECB concerning any ELA operation, is included ‘the prudential supervisor’s assessment, over the short and medium term, of the liquidity position and solvency of the institution receiving ELA, including the criteria used to come to a positive conclusion with respect to solvency’. That requirement must be understood in the light of the prohibition of monetary financing provided for by Article 123 TFEU, the substance of which is reproduced by Article 21.1 of the ECB Statute. In that regard, the ECB maintains in its plea of inadmissibility that it always considered that the financing of solvent financial institutions by means of ELA was compatible with that prohibition, whereas the financing of insolvent financial institutions was not. The CBC document of 31 January 2011 cited in paragraph 139 above supports that claim, stating that any provision of ELA in case of underlying solvency problems clearly infringes Article 123 TFEU and Article 21.1 of the ECB Statute.

143 At the time of the facts, the ECB did not have any supervisory powers over EU credit institutions, for which the national supervisors had exclusive competence. In those circumstances, in order to ensure compliance with the prohibition of monetary financing, the ECB was dependent on information supplied by those authorities relating to the solvency of banks benefiting from ELA.

144 In the second place, it is necessary to examine whether the press release of 21 March 2013 indicates the existence of a decision adopted under Article 14.4 of the ECB Statute, as is claimed in essence by the applicants (see paragraph 134 above), or of a mere declaration of intent, as contends the ECB (see paragraph 90 above).

145 In that regard, it should be noted that, in accordance with Article 14.4 of the ECB Statute, the Governing Council of the ECB is the body which is competent to forbid a central bank from granting ELA where that interferes with the objectives and tasks of the ESCB. The press release of 21 March 2013 states that the Governing Council of the ECB ‘decided’ to maintain a certain level of ELA until 25 March 2013. It follows, impliedly but necessarily, that, from 26 March 2013, the maintenance of that level of ELA would no longer be authorised and that, as that press release states, ‘[t]hereafter, [ELA] could only be considered if an [EU or IMF] programme is in place that would ensure the solvency of the concerned banks’.

146 It must therefore be concluded, as the applicants claim, that the press release of 21 March 2013 refers to the existence of a decision of the Governing Council of the ECB opposing the maintenance of the existing level of ELA from 26 March 2013 and making a possible extension to its reimbursement subject to the conclusion of a financial assistance programme ensuring the solvency of the banks concerned (‘the decision of the Governing Council of the ECB of 21 March 2013’).

147 In the third place, it is necessary to examine whether it can be deduced from that press release of 21 March 2013 that the ECB required the adoption of the harmful measures by the Republic of Cyprus.

148 In that regard, it must be noted that the press release of 21 March 2013 merely expresses an obligation of results. In that press release, the ECB makes no reference, direct or indirect, to the harmful measures, but merely makes a possible extension to the reimbursement of ELA subject to the conclusion of an EU/IMF programme ensuring the solvency of the banks concerned. That press release in no way specifies the necessary characteristics of such a programme, nor does it mention the Euro Group statements, the ESM measures, or the ongoing negotiations relating to the adoption of the harmful measures.

149 Contrary to the applicants’ claims, the press article of 17 October 2014 entitled ‘Before a bailout, E.C.B. minutes showed doubts over keeping a Cyprus bank afloat’ in no way calls into question that assessment. That article merely reports that ‘[a] close reading of minutes [of meetings of the Governing Council of the ECB] reveals numerous instances in which ECB officials said they would cut off the programme [of ELA granted to Laïki] if progress was not made by [the Republic of] Cyprus in securing an economic rescue programme’, without at any time maintaining that those officials required that such a programme take a specific form or have particular characteristics.

150 Assuming them to be proved, the opinions expressed by a member of the ECB Executive Board during the Euro Group meetings of 15 and 16 March 2013 also do not substantiate the applicants’ position. According to a press article of 19 February 2015 entitled ‘[d]id the troika defraud billions at the expense of thousands of depositors in Cyprus?’, to which the applicants refer, that member of the ECB Executive Board threatened to deprive Cypriot banks of access to ELA. However, it is not apparent from the opinions reported by that article that that member of the ECB Executive Board thereby understood making the extension to the ECB’s non-opposition to maintaining ELA subject to the adoption of the harmful measures. At the most, it can be considered, in the light of testimony before an investigating committee of the Cypriot Parliament made by the Minister for Finance of the Republic of Cyprus at the time of the facts, that those opinions related to the introduction of a levy on Cypriot bank deposits. That levy, whose introduction was rejected by the Cypriot Parliament on 19 March 2013 (see paragraph 22 above), is not included among the harmful measures.

151 In those circumstances, it must be concluded that, as the ECB, in essence, maintains, the press release of 21 March 2013 leaves the Republic of Cyprus the option of taking measures other than the harmful measures for the purpose of ensuring the solvency of the banks concerned (see, to that effect and by analogy, order of 14 July 2016, Alcimos Consulting v ECB, T‑368/15, not published, EU:T:2016:438, paragraph 38). It cannot therefore be considered that, by that press release or by the decision referred to therein, the ECB required that the Republic of Cyprus adopt those measures.

(4) ‘[Decisions] to continue the granting of ELA’, allegedly adopted by the ECB

152 The applicants make a distinction between the decision of the Governing Council of the ECB of 21 March 2013 (see paragraphs 134 to 151 above) and what they classify as decisions of the ECB ‘to continue the granting of ELA’. During the hearing, the applicants stated that those decisions were prior to the press release of 21 March 2013.

153 At that time, ELA came within the competence solely of the national supervisors (see paragraphs 137 to 143 above), since the Governing Council of the ECB, in this case, has competence only to restrict the operations of ELA which it considers interfered with the objectives and tasks of the ESCB. It must therefore be concluded that the ECB measures referred to by the applicants are those by which the ECB decided, prior to 21 March 2013, not to oppose ELA.

154 However, the applicants in no way explain how the ECB, by such decisions, required the adoption of the harmful measures by the Republic of Cyprus. On the contrary, the applicants themselves acknowledged during the hearing that they invoked those decisions simply to highlight the allegedly arbitrary nature of the decision of the Governing Council of the ECB of 21 March 2013.

155 It cannot therefore be considered that, by ‘decisions to continue the granting of ELA’ prior to the press release of 21 March 2013, the ECB required the Republic of Cyprus to adopt the harmful measures.

(5) Subsequent acts

156 Among the contested acts (see the fifth and sixth indents of paragraph 77 above) are also the following four groups of acts: – the negotiation and conclusion of the MoU of 26 April 2013 by the Commission; – the ‘Commission’s findings that the measures adopted by the Cypriot authorities complied with conditionality’ and the approval, by the Commission and the ECB, of the payment of various tranches of FAF to the Republic of Cyprus; – the Euro Group Statements of 12 April, 13 May and 13 September 2013; – Decision 2013/236.

157 Those acts postdate 29 March 2013 and, therefore, the adoption of the harmful decrees. It is, therefore, not possible to consider that the defendants, by means of those acts, required the adoption of the harmful measures set out in those decrees. At the most, they could thus have required the adoption of the harmful measures introduced by the amendments made to the harmful decrees on 30 July 2013 and referred to in paragraphs 33 and 34 above. The applicants claim, however, that all of the contested acts are part of a ‘continuum’, beginning with the defendants’ conduct which led to the adoption of the agreement on conditionality and continuing with their various interventions before and after the signing of the MoU of 26 April 2013. During the hearing, the applicants pointed out that each of those acts and conduct was a ‘necessary link in the chain of conditionality’. In those circumstances, the defendants’ refusal to adopt one of those acts would have meant the failure of the harmful measures, which could not then have been, or could no longer be, implemented.

158 The applicants’ arguments amount, in essence, to considering that the adoption, by the defendants, of each of the acts referred to in paragraph 156 above was a necessary condition for the maintenance or continued implementation, by the Republic of Cyprus, of the harmful measures. It must, however, be noted that that line of argument remains speculative, since the applicants failed to adduce any evidence seeking to establish the truth or even the likelihood thereof. It is not apparent from the documents in the case file that the Republic of Cyprus would have been required to revoke or cease implementing the harmful measures if any one of the subsequent acts referred to in paragraph 156 above had not been adopted.

159 It is, however, possible to interpret the applicants’ written submissions before the Court, and in particular their argument that the Republic of Cyprus would not, without infringing certain of those later acts, have repealed the Law of 22 March 2013 and the harmful decrees or ceased to implement the harmful measures introduced on 29 March 2013, as meaning that the defendants obliged the Republic of Cyprus to maintain or continue to implement those measures. The harm alleged results therefore not only from the adoption of the harmful measures, but also from the maintenance and continued implementation thereof.

160 It is therefore necessary to examine whether the defendants, by adopting the acts referred to in paragraph 156 above, required the Republic of Cyprus to maintain or continue to implement the harmful measures introduced on 29 March 2013. It will also be examined whether the defendants, by means of those acts, required the adoption of the harmful measures introduced by the amendments made to the harmful decrees on 30 July 2013 and referred to in paragraphs 33 and 34 above.

161 In the first place, concerning the conclusion of the MoU of 26 April 2013 by the Commission, it should be pointed out that the measures specified in that MoU are divided into three groups, each of which relating to a different objective, namely, firstly, restoring the health of the Cypriot financial system and rebuilding depositors’ and market confidence, secondly, continuing the fiscal consolidation process and, thirdly, implementing structural reforms.

162 The harmful measures are referred to in the context of the first of those three groups. They are described, first of all, briefly under the heading ‘Progress to date’ and then in more detail, in paragraphs 1.23 to 1.28 of the MoU of 26 April 2013 (see paragraph 42 above).

163 First of all, it is necessary to examine the argument of the ECB and the Commission, according to which the harmful measures are listed in that MoU for purely historical and descriptive purposes (see paragraph 87 above).

164 In that regard, firstly, it is stated in recitals D and F of the MoU of 26 April 2013, first, that FAF is granted to the Republic of Cyprus on condition that it comply with the measures set out therein and, secondly, that the ESM’s Board of Directors must decide, on the basis of Commission reports and before making each payment, whether those measures were complied with. Contrary to what is contended by the Commission, there are no provisions of the MoU of 26 April 2013 which state that the Republic of Cyprus may restrict itself to adopting certain new measures. It follows rather from a reading of that MoU that the implementation of all the measures set out therein, and therefore also the maintenance of those which had already been adopted prior to its signing, was considered to be necessary.

165 Secondly, in paragraphs 1.23 to 1.28 of the MoU of 26 April 2013, measures which have already been adopted are mentioned together with measures to be adopted. However, there would be no reason for the latter in the absence of measures which have already been adopted. Therefore, it is stated, in paragraph 1.26 of the MoU 26 April 2013, that the recapitalisation of BoC was carried out by means, in particular, of conversion of uninsured deposits into shares (measure already adopted) and, in paragraph 1.27 of that memorandum, that if, following a valuation of the capital requirements of BoC which should be carried out subsequently, it is considered that BoC is undercapitalised, a greater amount of uninsured deposits will need to be converted into shares, whereas, if it is considered that BoC is overcapitalised, the uninsured depositors will have a right to a refund (measures to be adopted).

166 Therefore, it is necessary to reject the argument of the Commission and the ECB that the harmful measures are listed in the MoU of 26 April 2013 for purely historical and descriptive purposes and, therefore, to consider that paragraph 1.26 of that MoU requires the maintenance of the harmful measures introduced on 29 March 2013 as a condition for the grant of FAF. As regards paragraph 1.27 of that memorandum, it concerns additional conversions of BoC deposits into shares, such as they were introduced on 30 July 2013 by the amendments to Decree No 103 referred to in paragraph 33 above.

167 However, it should be noted that the Commission signed the MoU of 26 April 2013 on behalf of the ESM, in accordance with Article 13(4) of the ESM Treaty. As was noted in paragraph 129 above, the duties conferred on the Commission and the ECB in the context of the ESM Treaty do not entail any power to make decisions of their own and the activities pursued by those institutions within the ESM Treaty commit the ESM alone (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 161, and of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 53). Therefore, the requirement to maintain and continually implement the harmful measures, as well as the possible requirement for additional conversions of BoC shares, included in that MoU are attributable only to the ESM and not to the Commission.

168 It follows from the above that, by concluding the MoU of 26 April 2013, the Commission did not require either the maintenance or the continued implementation of the harmful measures introduced on 29 March 2013 by the Republic of Cyprus, but restricted itself to providing operational assistance to the ESM with a view to the conclusion of an agreement for which only the ESM and the Republic of Cyprus are responsible. The same conclusion must be reached as regards the harmful measures introduced on 30 July 2013 by the amendments made to the harmful decrees and referred to in paragraphs 33 and 34 above.

169 In the second place, even assuming that they can be considered to have required the maintenance or continued implementation of the harmful measures or the adoption of the harmful measures introduced on 30 July 2013 by the amendments made to the harmful decrees and referred to in paragraphs 33 and 34 above, the finding, by the Commission that ‘the measures adopted by the Cypriot authorities complied with conditionality’ and the approval, by the Commission and the ECB, of the payment of various tranches of FAF to the Republic of Cyprus (see the second indent of paragraph 156 above), are, for reasons similar to those set out in paragraphs 167 and 168 above, attributable only to the ESM. Where, under Article 13(7) of the ESM Treaty, the Commission, in liaison with the ECB, is to monitor compliance with the conditionality attached to FAF, it merely performs an operational task on behalf of the ESM, which alone has decision-making powers.

170 In the third place, as regards the Euro Group Statements of 12 April, 13 May and 13 September 2013 (see the third indent of paragraph 156 above), it must be noted that, in those statements, the Euro Group makes no reference to the need to maintain or continue to implement the harmful measures so that the Republic of Cyprus may be able to benefit from the different tranches of FAF granted by the ESM. It also makes no reference to the need to adopt the harmful measures introduced on 30 July 2013 by the amendments made to the harmful decrees and referred to in paragraphs 33 and 34 above. In those statements, the Euro Group merely, in essence, very briefly describes and welcomes certain measures adopted by the Cypriot authorities, and expresses the opinion that those measures are likely to contribute to reducing the financial difficulties confronting the Republic of Cyprus. The Euro Group also describes, in those statements, the past and future stages of the financial assistance procedure and expresses, in particular, its support for the payment of a new tranche of aid.

171 Therefore, it cannot be considered that, by the statements of 12 April, 13 May and 13 September 2013, the Euro Group required the maintenance or the continued implementation of the harmful measures or the adoption of the harmful measures introduced on 30 July 2013 by the amendments made to the harmful decrees and referred to in paragraphs 33 and 34 above.

172 In the fourth place, as regards Decision 2013/236 (see the fourth indent of paragraph 156 above), by which the Council ‘approve[d] and incorporate[d] into the main body of EU law’ the allegedly unlawful conditions for granting FAF, it must be noted that, contrary to what i