Opinion of the European Central Bank at the request of the Minister of Finance of the Netherlands under Articles 109 l(2) and 109 f(6) of the Treaty establishing the European Community (hereinafter referred to as the "Treaty") and Article 5.3 of the Statute of the European Monetary Institute (hereinafter referred to as the EMI) on a draft legislative proposal to amend the Dutch Central Bank Act 1998 (CON/98/38)
Date: 1998-08-20
Institutions: European Central Bank
Subjects: Netherlands, board of directors, central bank, national law

20 August 1998

OPINION OF THE EUROPEAN CENTRAL BANK

at the request of the Minister of Finance of the Netherlands under Articles 109 l(2) and 109 f(6)

of the Treaty establishing the European Community (hereinafter referred to as the “Treaty”)

and Article 5.3 of the Statute of the European Monetary Institute (hereinafter referred to as the

EMI) on a draft legislative proposal to amend the Dutch Central Bank Act 1998.

(CON/98/38)

1.  On  27  July  1998  the  European  Central  Bank  (hereinafter  referred  to  as  the  “ECB”)  received  a

request  from  the  Minister  of  Finance  of  the  Netherlands  for  an  opinion  on  a  draft  legislative

proposal to amend the Dutch Central Bank Act 1998 (hereinafter referred to as the “draft Act”).

2.  In accordance with Article 109 l(2) of the Treaty, the ECB has taken over the advisory functions

of the EMI, which went into liquidation upon the establishment of the ECB on 1 June 1998.  The

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

Decision (93/717/EC) of 22 November 1993 on the consultation of the EMI by the authorities of

the Member States on draft legislative provisions, as the draft Act contains provisions concerning

De Nederlandsche Bank and its Governor. In accordance with Articles 12.4 and 47.1 of the ESCB

Statute,  this  opinion  has  been  adopted  by  the  Governing  Council  with  the  contribution  of  the

General Council.

3.  The ECB notes with satisfaction that the draft Act follows up on issues raised in the EMI’s March

1998 report prepared under Article 109 j of the Treaty (hereinafter referred to as the “Convergence

Report”).  In  this  Report  (in  particular  pages  333  and  334),  the  EMI  mentioned  that  Article  3,

section 1, introduction and paragraph (a) of the Central Bank Act 1998 contained an imperfection.

This Article states that the “Bank co-defines” (and executes) the ESCB’s monetary policy rather

than its Governor whose unique position  in this  respect  has to rather implicitly  be  derived  from

references  to  the  Bank’s  integration  in  the  ESCB  (in  the  Central  Bank  Act  1998)  and  to  the

Governor’s  dual  capacity  as  Governor  and  as  member  of  the  ECB’s  Governing  Council  and

General  Council  (in  the  Bank’s  Articles  of  Association).  The  draft  Act  corrects  this  situation

through an amendment of Article 3 and an addition to Article 12. Article 3 (draft) now states that

the “Bank contributes (in Dutch: “draagt bij”) in the framework of the ESCB to the definition” (in

Dutch: “het bepalen”) (and execution) of the ESBC’s monetary policy. The addition to Article 12

states that the  Bank’s  Board  of  Directors  with regard to the  performance  of  ESCB-related  tasks

shall  “respect”  (in  Dutch:  “in  acht  nemen”)  the  capacity  of  its  Governor  as  member  of  the

Governing  Council  and  the  General  Council  of  the  ECB.  This  drafting  accommodates  the

concerns raised in the EMI’s Convergence Report with regard to Article 3 of the Central Bank Act

1998, it being understood that the competence for monetary policy in the ESCB rests exclusively

with the Governing Council of the ECB.

4.

Finally,  the  draft  Act  also  introduces,  in  Article  19,  an  obligation  for  the  Bank’s  Governor  to

appear  in  Second  Chamber  and/or  the  Senate  if  so  requested.  In  accordance  with  the  EMI’s

Convergence Report, such dialogue between NCBs and their respective political authorities, even

when  based  on  statutory  obligations  to  provide  information  and  exchange  views,  is  not

incompatible with the Treaty and the ECB Statute provided that:

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this does not result in interference with the independence of the members of the decision-

making bodies of NCBs;

the ECB’s competences and accountability as well as the special status of a governor in

his/her capacity as a member of its decision-making bodies are respected; and

confidentiality requirements resulting from Statute provisions are observed

The first concern is met through an explicit reference in Article 19 of the draft Act to Article 107

of the Treaty, the second concern through an  explicit  recognition  in  Article  1, section  2,  of  the

Central Bank Act 1998 of the Bank’s and its Governor’s integration in the ESCB, and the third

concern through an explicit reference in Article 19 of the draft Act to Articles 10.4 and 38 of the

ECB Statute.

6.  The  ECB  confirms  that it  has  no  objection  to  this  opinion  being  made  public  by  the  competent

Dutch authorities at their discretion.

Done at Frankfurt am Main on 20.08.1998

The President of the ECB

[signed]

____________________

Willem F. Duisenberg