European Monetary Institute Opinion on the proposed amendment of Articles 45 and 56, paragraph 5, of the statutes of the Bank of Greece (CON/94/6)
Date: 1994-09-21
Institutions: European Monetary Institute
Subjects: European System of Central Banks, Greece, central bank, government, interest

EUROPEAN MONETARY INSTITUTE

OPINION OF THE EUROPEAN MONETARY INSTITUTE ON THE PROPOSED

AMENDMENT OF ARTICLES 45 AND 56, PARAGRAPH 5, OF THE STATUTES OF

THE BANK OF GREECE (CON/94/6)

1

With  a  view  to  Article  109f(6)  of  the  Treaty  on  European  Union,  Article  5.3  of  the  EMI's  Statute  and

Council Decision 93/71/EC of 22 November 1993, on 29 August 1994 the Bank of Greece submitted to

the  EMI  for  consultation  a  proposal  for  the  amendment  of  Articles  45  and  56,  paragraph  5,  of  its

Statutes.  In  doing  so,  the  Bank  of  Greece  acted  primarily  on  its  own  behalf  being  the  initiator  of  the

amendment  which  will  be  submitted  for  approval  to  its  General  Meeting  of  Shareholders  and  which  is

subsequently  to  be  ratified  by  law.  The  Bank  of  Greece  did  not  request  the  EMI  to  deliver  its  opinion

before a specific date.

2

The proposed amendment of the above Articles deals with certain financial relations between the Bank

of Greece and the Greek government. It provides for a system in which the State  may keep its accounts

with the Bank of Greece which  shall pay interest thereon and will be  entitled to a remuneration for the

service rendered to the State. The interest rate and the remuneration are to be agreed upon between the

Bank of Greece and the Greek Government. In the former arrangement, the State was  obliged to keep

its accounts with the Bank of Greece, interest was not paid (except for interest on funds held abroad for

which the remuneration was pre-determined by Article 45), while  no  remuneration  was  received  by  the

Bank for its services.

3

The EMI's competence to deliver an opinion in this consultation is based on Article 1, second indent, of

Council  Decision  93/71/EC  as  the  change  of  the  Statutes  affects  the  relationship  between  the  Bank  of

Greece  and  the  Government  of  Greece.  The  proposed  amendment  is  a  first  step  towards  a  "draft

legislative provision" in the sense of Article 1 of Council Decision 93/71/EC. The Bank of Greece clearly

has an interest in obtaining the EMI's opinion at a relatively early stage in the amendment procedure and

this interest of the "initiating authority" is reflected in Article 3 of Council Decision 93/71/EC. Therefore,

the EMI does not see any objections to giving its opinion on the proposed amendment at this stage.

4

As far as the substance of the proposed amendment of Articles 45 and 56, paragraph 5, of the Statutes is

concerned, it does not give rise to any issues which, from the EMI's point of view, are not in compliance

with the Treaty on European Union or its underlying principles. In particular, the change in the regime on

holding  accounts  with  the  Bank  of  Greece  does  not  conflict  with  the  provisions  of  Article  21  of  the

Statute of the ESCB and ECB and, moreover, introduces a more market-oriented approach. In the spirit

of  Articles  3a  and  102a  of  the  Treaty,  it  might  be  desirable  to  clarify  that  interest  paid  on  balances  of

Government accounts and the cost for the administration of such accounts should be broadly consistent

with  normal  market  conditions  and  practice.  Finally,  it  is  noted  that  interest  paid  on  Government

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accounts is not susceptible to deduction from the Bank of Greece's monetary income in Stage 3 of EMU

in accordance with Article 32.4 of the Statute of the ESCB/ECB.

21 September 1994