Joined Cases C‑8/15 P to C‑10/15 P

Ledra Advertising Ltd and Others

v

European Commission

and

European Central Bank (ECB)

‛Appeals — Stability support programme for the Republic of Cyprus — Memorandum of Understanding of 26 April 2013 on Specific Economic Policy Conditionality concluded between the Republic of Cyprus and the European Stability Mechanism (ESM) — Duties of the European Commission and the European Central Bank — Non-contractual liability of the European Union — Second paragraph of Article 340 TFEU — Conditions — Obligation to ensure that the Memorandum of Understanding is consistent with EU law)’

Summary — Judgment of the Court (Grand Chamber), 20 September 2016

Economic and monetary policy — Economic policy — Coordination of economic policies — European Stability Mechanism — Conclusion of a memorandum of understanding providing for the conversion of uninsured deposits of a domestic bank into shares and for the temporary freezing of other uninsured deposits of that bank — Unjustified restriction on the depositors’ right to property — No such restriction

Economic and monetary policy — Economic policy — Coordination of economic policies — European Stability Mechanism — Allocation of new tasks to the Commission and the European Central Bank — No effect on the powers conferred by the EU and FEU Treaties on those institutions — Ability to plead in an action for compensation that those tasks have been carried out unlawfully

See the text of the decision. (see paras 34-38)

Participation of the Commission and the European Central Bank, as envisaged by Article 13 of the Treaty establishing the European Stability Mechanism, in the procedure resulting in the signature of a memorandum of understanding with a Member State does not enable that memorandum to be classified as an act that can be imputed to them. The duties conferred on the Commission and the Bank within that Treaty, important as they are, do not entail any power to make decisions of their own. Furthermore, the activities pursued by those two institutions within that Treaty commit the European Stability Mechanism alone. (see paras 52, 53)

The fact that one or more institutions of the European Union may play a certain role within the framework of the European Stability Mechanism does not alter the nature of the acts of the latter, which fall outside the EU legal order. However, whilst such a finding is liable to have an effect in relation to the conditions governing the admissibility of an action for annulment that may be brought on the basis of Article 263 TFEU, it cannot prevent unlawful conduct linked, as the case may be, to the adoption of a memorandum of understanding on behalf of the European Stability Mechanism from being raised against the Commission and the European Central Bank in an action for compensation under Article 268 TFEU and the second and third paragraphs of Article 340 TFEU. The tasks allocated to the Commission by the Treaty establishing the European Stability Mechanism oblige it, as provided in Article 13(3) and (4) thereof, to ensure that the memoranda of understanding concluded by that mechanism are consistent with EU law. Consequently, the Commission retains, within the framework of that Treaty, its role of guardian of the Treaties as resulting from Article 17(1) TEU, so that it should refrain from signing a memorandum of understanding whose consistency with EU law it doubts. (see paras 54, 55, 58, 59)

Whilst it is true that the Member States do not implement EU law in the context of the Treaty establishing the European Stability Mechanism, so that the Charter of Fundamental Rights of the European Union is not addressed to them in that context, on the other hand the Charter is addressed to the EU institutions, including when they act outside the EU legal framework. Moreover, in the context of the adoption of a memorandum of understanding concluded between the European Stability Mechanism and a Member State, the Commission is bound, under both Article 17(1) TEU, which confers upon it the general task of overseeing the application of EU law, and Article 13(3) and (4) of the Treaty establishing the European Stability Mechanism, which requires it to ensure that the memoranda of understanding concluded by the European Stability Mechanism are consistent with EU law, to ensure that such a memorandum of understanding is consistent with the fundamental rights guaranteed by the Charter. (see para. 67)