Opinion of the European Monetary Institute on a consultation from the German Minister of Finance under Article 109f (6) of the Treaty establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI as elaborated in the Council Decision of 22 November 1993 (93/717/EC) (the “Decision”) on the Draft 6th Act amending the Bundesbank Act (CON/97/10)
Date: 1997-05-30
Institutions: European Monetary Institute
Subjects: European System of Central Banks, Germany, banking secrecy, central bank, economic policy, euro, issuing of currency, paper money, price stability

GS/LD/97/300

OPINION OF THE EUROPEAN MONETARY INSTITUTE

on a consultation from the German Minister of Finance under Article 109f (6) of the Treaty establishing

the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI as elaborated in the

Council Decision of 22 November 1993 (93/717/EC) (the “Decision”)

on the Draft 6th Act amending the Bundesbank Act

CON/97/10

1. 

The above consultation was initiated by the German Minister of Finance, who on 12 May 1997

submitted the relevant draft provisions to the European Monetary Institute. Owing to the urgency

of the matter given to it by the German authorities an opinion of the EMI was requested to be

delivered by the end of the month.

2. 

The  EMI’s  competence  to  deliver  an  opinion  is  based  on  Article  1.1,  second  indent,  of  the

Decision, as the draft provisions relate to the status and powers of the Bundesbank.

3. 

The EMI welcomes the timely and efficient legislative action to clarify the legal situation of the

German central bank in the light of requirements of the EC Treaty and Article 108 thereof. This

applies  in  particular  with  regard  to  the  reorganisation  of  the  responsibility  for  monetary  policy

resulting from the entry into the third stage of monetary union.

4.  With regard to the specific provision the EMI appreciates that Section 3 of the draft Act on the

primary  objective  and  task  of  the  Bundesbank  incorporates  the  concept  of  price  stability  of

Article 105(1) of the EC Treaty and confirms the principle of the national central banks being an

integral part of the European System of Central Banks as laid down in Article 14.3 of the Statute

of  the  ESCB.  It  takes  note  that  the  revised  wording  of  Section  3  reflects  the  legal

acknowledgement  of  obligation  of  the  Bundesbank  to  implement,  within  the  framework  of  the

ESCB, the monetary policy adopted by the Governing Council of the ECB. The EMI also agrees

that the pledge of secrecy provided for in Section 32 of the Bundesbank Act does not obstruct

communications with the ECB on monetary developments and measures.

5. 

The draft amendment does not touch upon Section 4 of the Bundesbank Act which entitles the

Bundesbank to participate in the Bank for International Settlements and, subject to the approval

 
 
 
 
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of  the  Federal  Cabinet,  inter  alia  in  other  institutions  serving  the  purposes  of  supranational

monetary  policy.  It  is  understood  that  Section  4  is  to  be  read  in  the  light  of  the  prevailing

Article  6.2  of  the  Statute  of  the  ESCB  which  states  that  the  national  central  banks  may

participate in international institutions, subject, however, to the approval of the ECB. It would be

welcome, for reasons of legal certainty and clarity, that this legal situation is adequately mirrored.

6. 

The  amendment  of  Section  6(1)  reflects  the  transfer  of  the  responsibility  of  the  Central  Bank

Council for determining monetary policy to the Governing Council of the ECB and confirms the

conformity  of  actions  of  the  Bundesbank  with  guidelines  and  instructions  of  the  ECB  in

accordance  with  Article  14.3  of  the  Statute  of  the  ESCB.  The  EMI  does  not  see  any

interference  with  that  principle  by  the  Central  Bank  Council  determining  the  Bundesbank’s

business policy or by the mention of discussions of implications of monetary policy by this body.

It acknowledges that in these respects no organisational change of the Bundesbank is intended.

7. 

The  EMI  acknowledges  that  the  amendments  to  Section  7  and  Section  8  fully  reflect  the

requirements concerning the minimum term of office of the Governor of a national central bank

according  to  Article  14.2  of  the  Statute  of  the  ESCB.  It  welcomes  that  the  minimum  term  of

office  also  of  the  other  members  of  decision-making  bodies  of  the  Bundesbank  has  been

increased to five years.

8. 

Section 12 of the Bundesbank Act has remained unchanged and provides for the support of the

Bundesbank,  without  prejudice  to  the  performance  of  its  functions,  to  the  general  economic

policy of the Federal Cabinet. The EMI notes that the functions of the Bundesbank are defined

according to the revised Section 3. Therefore, as the Bundesbank will be an integral part of the

ESCB which according to Articles 105(1) of the Treaty and 2 of the Statute of the ESCB entails

that  it  shall  support  the  general  economic  policies  in  the  Community,  any  support  by  the

Bundesbank  to  national  economic  policy  has  to  be  confined  to  those  areas  that  do  not  conflict

with  Article  2  of  the  Statute  of  the  ESCB.  However,  it  would  be  welcome  that  Section  12

explicitly addresses this issue in order to avoid any misinterpretation of this provision.

9. 

The  EMI  welcomes  the  repealing  of  Section  13(2),  sentence  3  in  the  Bundesbank  Act  which

provision  was  not  in  line  with  the  institutional  independence  of  the  national  central  bank  in

accordance with Article 107 of the EC Treaty.

10.  With regard to the amendment of Section 14 the EMI agrees with the proposed wording to be

added. It is understood that this section is meant to protect the sole right of the Bundesbank to

issue banknotes within the German monetary area during the transitional period without prejudice

to the competencies of the ECB in accordance with Article 105a(1) of the EC Treaty.

 
 
 
 
 
 
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11.  The  decision  to  repeal  the  provisions  of  Sections  15  and  16  of  the  Bundesbank  Act  on  the

discount,  lending,  open  market  and  minimum  reserve  policies  reflects  the  availability,  for  the

ESCB, of monetary policy instruments under the Treaty and the Statute of the ESCB to fulfil its

tasks.

12.  Whereas the EMI has no objections with regard to Article 108 of the EC Treaty to maintaining

at  this  stage  the  provisions  in  Sections  19  to  21  of  the  Bundesbank  Act,  once  the  ECB  has

adopted  the  operational  framework  for  its  monetary  policy  at  a  later  stage,  it  may  result  in

inconsistencies  with  that  operational  framework  and  legal  clarity  would  require  at  that  stage

adaptation.

13.  Section 27 of the Bundesbank Act has remained unchanged. The EMI would like to emphasise

that  this  provision  will  have  to  be  applied  in  the  context  of  Article  32  on  the  allocation  of

monetary income of national central banks.

14.  The  EMI  has  no  objections  against  the  repealing  of  Section  28  on  the  Bundesbank’s  Weekly

Returns.

15.  According  to  Section  32  of  the  Bundesbank  Act  all  persons  in  the  service  of  the  Deutsche

Bundesbank are pledged to secrecy about affairs and facilities of the Bank. Sentence 3 of this

section  lays  down  the  procedure  under  which  the  permission  to  make  statements  about  these

matters is granted “where the interests of the Bank are involved”. It is recommended that it is

confirmed  that,  where  the  objectives  and  tasks  of  the  ESCB  are  concerned,  the  conditions  of

Article 38 of the Statute of the ESCB - on the professional secrecy of members of the governing

bodies  and  the  staff  of  the  national  central  banks  -  take  precedence  over  such  procedure  of

permission.

16.  This opinion is confined to the text submitted by the consulting authority.

The EMI has no objection to this opinion being made public.

30 May 1997