Opinion of the European Central Bank at the request of the Bank of Greece under Article 105 (4), second indent, of the Treaty establishing the European Community (“the Treaty”) and Article 4 (a), second indent, of the Statute of the European System of Central Banks and of the European Central Bank (“the ESCB/ECB Statute”) on draft amendments to the Statute of the Bank of Greece (CON/2000/7)
Date: 2000-04-17
Institutions: European Central Bank
Subjects: Greece, monetary integration, monetary policy, money, national law, payment system, statistics

OPINION OF THE EUROPEAN CENTRAL BANK

at the request of the Bank of Greece under Article 105 (4), second indent, of the Treaty

establishing the European Community (“the Treaty”) and Article 4 (a), second indent, of the

Statute of the European System of Central Banks and of the European Central Bank (“the

ESCB/ECB Statute”) on draft amendments to the Statute of the Bank of Greece 

[CON/00/07]

1.  On 24 March 2000 the European Central Bank (ECB) received a request from the Bank of Greece

for an ECB Opinion on a consultation regarding draft amendments to the Statute of the Bank of

Greece (“the Draft Statute”).

2.  The ECB’s competence to deliver an opinion is based on Article 2, paragraph 1, third indent, of

Council  Decision  (98/415/EC)  of  29 June  1998  on  the  consultation  of  the  ECB  by  national

authorities  regarding  draft  legislative  provisions,  as  the  legislative  proposal  contains  provisions

concerning central banks, in the present case the Bank of Greece. In accordance with Article 17.5,

first sentence, of the Rules of Procedure of the ECB, this ECB Opinion has been adopted by the

Governing Council of the ECB.

3.  The Draft Statute aims at amending the present Statute of the Bank of Greece in order to ensure

the  full  legal  integration  of  the  Bank  of  Greece  into  the  Eurosystem.  Furthermore,  the  Draft

Statute  addresses  a  number  of  other  issues  of  importance  to  the  Bank  of  Greece,  related  to  its

future  integration  into  the  Eurosystem.  The  Bank  of  Greece  expects  that  the  proposed

amendments  to  its  Statute  will  be  adopted  at  its  General  Meeting  of  Shareholders  on  25  April

2000. It is also expected that the Statute will be ratified immediately afterwards through law by

Parliament  and  published  well  in  advance  of  31 December  2000  in  the  Government  Gazette  in

order  to  take  effect  on  1 January  2001.    In  view  of  these  procedures  and  in  view  of  the  report

which the ECB is required to deliver under Article 122 (2) of the Treaty, the Bank of Greece has

adapted its Draft Statute in the light of remarks made during the present consultation procedure. 

This  was  confirmed  in  a  letter  from  the  Bank  of  Greece  dated  12  April  2000,  to  which  this

Opinion will refer where appropriate.

4.  The Statute of the Bank of Greece was amended to meet the requirements of the Treaty and the

ESCB/ECB  Statute  for  Stage  Three  of  EMU,  which  were  introduced  with  Law  2548  dated  12

December  1997,  published  in  the  Government  Gazette  on  19  December  1997.    Law  2548/1997

was then, subsequently, incorporated in the Statute of the Bank of Greece through a decision of

the Extraordinary Meeting of Shareholders of the Bank of Greece held on 22 December 1997.  In

accordance  with  Article  7  of  the  Bank’s  Statute,  this  decision  was  later  ratified  by  Parliament

through Law 2609/1998, which was published in the Government Gazette on 11 May 1998.  The

European Monetary Institute (EMI) concluded in its March 1998 Convergence Report that, with

the  adoption  and  entry  into  force  of  Law  2548/1997,  there  were  no  remaining  incompatibilities

with Treaty and Statute requirements on central bank independence in the Statute of the Bank of

Greece.  The law addressed both the period during which the Bank of Greece is not an integral

part of the Eurosystem as well as the situation in which Greece will have adopted the euro.  The

EMI also concluded, however, that there were still two imperfections in the Statute of the Bank of

Greece (as meanwhile contained in Law 2609/1998; see above), which required adaptation before

Greece  adopts  the  euro.    Some  of  the  provisions  of  the  law  will  become  obsolete  upon  the

adoption by Greece of the euro.  This applies to the following provisions:

(cid:1)  Article 2.4 on the Bank’s participation in international monetary and economic organisations

does not refer to the ECB’s power of approval;

(cid:1)  Article 7.4 on the imposition of minimum reserves and penalties in case of non-compliance

does not recognise the ECB’s powers in this field.

Following  the  findings  of  the  1998  EMI  Convergence  Report,  the  Draft  Statute  of  the  Bank  of

Greece is aimed at removing the two above imperfections as well as at a further fine-tuning of the

Bank of Greece’s legal integration in the Eurosystem.

5.  The imperfection in Article 2.4 is remedied in Article 2.6, last indent, of the Draft Statute through

an explicit recognition of the fact that, in accordance with Article 6.2 of the ESCB/ECB Statute,

participation  in  international  monetary  institutions  is  subject  to  approval  of  the  ECB.    The

imperfection  in  Article  7.4  is  remedied  in  Article  55,  No.  21  (2),  of  the  Draft  Statute  which

explicitly  recognises  that,  after  the  adoption  of  the  euro  by  Greece,  the  competence  to  impose

minimum  reserves  and  related  matters  is  governed  exclusively  by  the  Eurosystem’s  regulatory

framework.

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6.  The ECB notes that Article 2 (f) of the Draft Statute of the Bank of Greece states that the Bank of

Greece has the exclusive right to issue legal tender banknotes within Greece and makes reference

to the ECB’s right of approval. The ECB is of the opinion that the reference to the ECB’s right of

approval should be replaced by a general reference to Article 106 of the Treaty.  In its letter dated

12 April 2000, the Bank of Greece confirms that this point will be accommodated through Article

2, third paragraph, which will read as follows:

“As  from  the  adoption  of  the  euro  as  the  currency  of  Greece,  the  Bank  of  Greece  no  longer

autonomously  performs  the  tasks  under  a,  b,  c  and  the  ESCB-related  tasks  under  e  above,  but,

being an integral part of the European System of Central Banks, contributes to the performance of

its tasks according to Article 2 of the ESCB Statute and acts in accordance with the guidelines and

instructions of the ECB, as stipulated in Articles 105, paragraph 2 and 3, and 111 of the Treaty

establishing the European Community as well as in Articles 3, 12, 14 paragraph 3, 30 and 31 of

the ESCB Statute.  As from the same date, the Bank of Greece may issue banknotes which have

the  status  of  legal  tender  in  accordance  with  the  provisions  of  Article  106  of  the  Treaty

establishing  the  European  Community  and  Article  16  of  the  ESCB  Statute.    In  addition,  it

performs the tasks set forth in the present Statute and the other applicable provisions”.

The ECB welcomes this clarification.

7.  The ECB notes that provisions that no longer apply as from the adoption of the euro by Greece

such  as  Articles  40-43  and  60  of  the  present  Statute  of  the  Bank  of  Greece,  will  be  deleted.

Accordingly, related provisions in Article 27 (e) and (g) need to be deleted as well. In its letter

dated 12 April 2000, the Bank of Greece confirms that such deletion will take place.  For reasons

of legal certainty, the  ECB  welcomes  the  abolition  of  any  provisions  that  will  become  obsolete

after the adoption of the euro.

8.  The  ECB  notes  that  with  a  view  to  ensuring  the  integration  of  the  Bank  of  Greece  in  the

Eurosystem, Articles 2 and  44  of  the  Draft  Statute  aim  to  make  the  Bank  of  Greece  an  integral

part of the  Eurosystem  by  recognising  that  certain  tasks  are  performed  without  prejudice  to  the

provisions of the ESCB/ECB Statute.  The ECB welcomes this basic assumption.

9.  The  power  of  the  Bank  of  Greece  to  impose  administrative  sanctions  in  the  performance  of  its

supervisory tasks is dealt with in a very comprehensive way. In addition, Article 55A of the Statute

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of  the  Bank  of  Greece  deals  with  the  power  of  the  Bank  to  impose  sanctions  by  virtue  of  its

supervisory role. The ECB has no specific remarks on this Article.

10.  The  ECB  notes  that  Article  55,  second  indent,  of  the  Draft  Statute  relating  to  the  Bank’s  tasks

contains  language  that  unambiguously  reflects  the  integration  of  the  Bank  of  Greece  into  the

Eurosystem.  The  ECB  welcomes  such  a  general  wording  to  clarify  that  the  application  of  the

Eurosystem’s legal framework is  not  prejudiced.  Furthermore,  the  ECB  welcomes  Article 55.10

of the Draft Statute because it contains an explicit provision to clarify that, upon the adoption of

the euro, the competence of the Monetary Policy Council of the Bank of Greece will change and

that it may subsequently execute the terms and conditions of monetary policy as laid down in the

monetary policy legal framework of the Eurosystem.

11.  The  ECB  understands  that  certain  provisions  contained  in  the  Draft  Statute  are  inherent  to  the

legal  personality  of  the  Bank  of  Greece  as  a  stock  corporation.  Accordingly,  Article 55.19

addresses  the  power  of  the  Bank  of  Greece  to  issue  corporate  bonds  in  its  capacity  as  a  stock

corporation. The ECB does not have any specific remarks on this provision. Incidentally, the ECB

notes  in  this  context  that  any  non-ESCB  related  tasks  which  may  be  attributed  to  the  Bank  of

Greece are subject to Article 14.4 of the ESCB/ECB Statute.

12.  Furthermore, Article 55C of the Draft Statute concerning the imposition of sanctions in the area

of statistics will become superfluous after the adoption of the euro, since Council Regulations and

related legal acts of the ECB in the area of statistics apply directly in participating Member States

without  the  need  for  any  reference  to  them  in  national  legislation.  Nevertheless,  the  ECB

welcomes  the  fact  that  Article 55C  of  the  Draft  Statute  explicitly  recognises  the  exclusive

competence of the ECB in the field of those statistics that are related to the ESCB tasks.

13.  Article 57A  of  the  Draft  Statute  codifies  provisions  stipulating  prerogatives  in  the  creation  and

perfection of collateral taken by the Bank of Greece. This Article provides for a legal pledge on

book-entry securities held in the participant’s securities account which is automatically created in

favour  of  the  Bank  without  any  separate  contract  with  a  counterparty,  thus  deviating  from  the

provisions  for  the  creation  of  a  pledge  set  out  in  the  Greek  Civil  Code.  Under  the  envisaged

pledge structure of Article 57A of the Draft Statute, the Bank of Greece automatically has a right

of pledge up to the amount of the claim with the applicable margin of the Bank of Greece vis-à-

vis a counterparty. This provision addresses any concerns that might have arisen as a result of the

“specification principle” that applies to the creation of pledge under Greek law and requires that

collateral  is  precisely  itemised  by  parties.  This  Article  applies  also  in  cases  where  the  Bank  of

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Greece acts on behalf of other national central banks (NCBs) or of the ECB. The practical effect

of  such  a  provision  will  be  apparent  primarily  within  the  framework  of  the  Multilateral

Agreement between the ECB and NCBs on the Correspondent Central Banking Model (CCBM).

14.  Moreover, Article 57A of the Draft Statute contains provisions on the effects of bankruptcy of a

participant in a payment system, which may not be antedated prior to the publication of a court’s

bankruptcy order. The objective of this Article is to secure claims of the Bank of Greece as well

as  of  the  NCBs  and/or  the  ECB  against  any  system  participants.  This  provision  ensures  the

validity of the realisation of the collateral by the Bank of Greece acting on its own behalf or on

behalf of NCBs or the ECB. Such a provision is in line with the provisions of Directive 98/26/EC

of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment

and  securities  settlement  systems,  which  has  already  been  implemented  in  a  separate

Law 2789/2000 published in the Government Gazette on 11 February 2000.

15.  Article 55.5 of the Draft Statute provides explicitly for the Bank of Greece to oversee and manage

any  payment  and  settlement  systems.  This  provision  is  welcomed  since  the  Bank  of  Greece

already manages a settlement system and it gives the Bank authority to oversee a very important

part of the financial system.

16.  In the Draft Statute the expression “the euro as the national currency of Greece” is used, which

may  be  perceived  as  ambiguous,  since  this  does  not  clearly  reflect  the  wording  of  Council

Decision (EC) No. 974/98 of 3 May 1998 on the introduction of the euro, which defines the euro

as  “the  currency  of  the  participating  Member  States”.  Although  the  ECB  appreciates  that  the

above expression is mainly used to indicate the replacement of the Greek drachma by the euro, the

ECB recommends deletion of the word “national”.  In its letter dated 12 April 2000, the Bank of

Greece confirms that such deletion will take place.

17.  As regards the explanatory note to the Draft Statute, the  ECB  notes  the  following.  In  Article 2,

second paragraph, “Treaty of the European Union” should be replaced by “Treaty establishing the

European Community”. In its letter dated 12 April 2000, the Bank  of  Greece  confirms  that  this

replacement will take place.  In Article 55.17 of the explanatory note, it is stated that the ability of

the Bank of Greece to carry out transactions with foreign central banks and financial institutions,

as well as with international organisations “is without prejudice to the powers of the institutions

of the European Union in this field”. The ECB recommends clarification, as the ECB is, strictly

speaking,  not  an  institution  of  the  European  Union.  This  could  be  accomplished  through  the

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addition of the words “and bodies” after the word “institutions”.  In its letter dated 12 April 2000,

the Bank of Greece confirms that such an addition will be made.

18.  The ECB notes that Law 2548/1997 became obsolete after the adoption of Law 2609/1998 with

regard to provisions which are incompatible with the amended Statute as presently contained in

Law 2609/1998.  While, in accordance with the principle “lex posteriori derogat priori” and under

Article  28  of  the  Greek  Constitution,  Law  2609/1998  (as  amended  in  the  future)  would  prevail

over  Law  2548/1997,  the  ECB  notes  that  Article  109  of  the  Treaty  nevertheless  requires,  for

reasons  of  legal  clarity  and  certainty,  the  removal  of  obsolete  provisions.    The  ECB  has  been

informed by the Bank of Greece that the Greek legislative authorities intend to do so in the law

ratifying  the  present  amendments  to  the  Statute  of  the  Bank  of  Greece,  on  which  the  ECB  will

also have to be consulted under Article 105 (4), second indent, of the Treaty as repeated in Article

4(a), second indent, of the ESCB/ECB Statute.  In this connection, the ECB notes that, in its view,

the  legislative  procedures  to  repeal  the  relevant  provisions  of  Law  2548/1997  need  to  be

accomplished as a matter of urgency.

19.  As regards the present Statute of the Bank of Greece, the ECB acknowledges that the following

observations  under  paragraphs  20  to  24  have  not  been  raised  in  the  EMI’s  1998  Convergence

Report.  However,  the  ECB  is  at  the  same  time  of  the  opinion  that  these  points  merit  further

consideration for reasons of legal certainty and clarity.

20.  The ECB notes that originally no amendments to Article 2 (a) and (b) of the present Statute of the

Bank of Greece were envisaged. These provisions could, after the adoption of the euro by Greece,

give the impression that, on the one hand, the drachma would still be a currency in its own right

and,  on  the  other,  that  the  Bank  of  Greece  would  be  responsible  for  exchange  rate  policy.  The

ECB  takes  the  view  that  the  technique  proposed  in  order  to  avoid  giving  this  impression,  i.e.

amending the third paragraph of Article 2 by inserting references to the tasks of the ESCB and to

the Bank of Greece forming an integral part of the ESCB as from the moment of adoption of the

euro,  might  not  be  sufficiently  clear.  The  ECB  recommends  therefore  that  the  provisions

concerned  be  adapted.    In  its  letter  dated  12  April  2000,  the  Bank  of  Greece  confirms  that  this

point  will  be  accommodated  through  Article  2,  third  paragraph,  which  has  already  been  cited

above in paragraph 6 of this Opinion and to which may be referred here for reasons of brevity.

The ECB welcomes this clarification.

21.  The ECB notes that the second paragraph of Article 5B comprises the obligation of the Governor

of  the  Bank  of  Greece  to  appear,  when  so  requested,  before  the  competent  parliamentary

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committee  in  order  to  report  on  matters  relating  to  the  Bank’s  field  of  competence.  The  ECB

notes  that  such  an  obligation  can  prejudice  neither  the  fact  that  the  accountability  for  ESCB-

related tasks has been transferred to the Community level nor the ESCB’s confidentiality regime

to which a governor of an NCB is subject. This implies that the provision of information by the

Bank’s Governor to a parliamentary committee is subject to constraints as far as the execution of

ESCB-related tasks is concerned.

22.  The ECB notes that Article 27 in conjunction with Articles 35A and 55 of the Draft Statute could

be  interpreted  in  such  a  way  that  the  General  Council  of  the  Bank  of  Greece  will,  after  the

adoption of the euro, retain decision-making power in at least some ESCB-related areas (see, for

instance, Article 27(b)  which  refers  to  the  broad  range  of  operations  listed  in  Article 55,  unless

otherwise stated in such Article or elsewhere). Whilst the ECB appreciates that, in the context of

the  division  of  responsibilities  between  the  Monetary  Policy  Council  (Article 35A)  and  the

Bank’s  Governor  (Article 31,  second  paragraph),  on  the  one  hand,  and  the  General  Council

(Article 27), on the other, it is not the intention to attribute any ESCB-related tasks to the General

Council, this should, in the ECB’s view, be made clearer. This is also important in  view  of  the

fact that the General Council together with the Councillors and Government Commissioner do not

fulfil  requirements  of  central  bank  independence  derived  from  the  Treaty  and  the  ESCB/ECB

Statute for the execution of ESCB-related tasks. A method to achieve such clarity would be to list

in Article 27(b) which paragraphs of Article 55 do not fall within the competencies of the General

Council because they represent ESCB-related tasks.  In its letter dated 12 April 2000, the Bank of

Greece confirms that this point will be accommodated through Article 27(b) which will read as

follows:  “general  conditions  and  extent  of  the  business  conducted  outside  the  scope  of  ESCB-

related tasks”.  The ECB welcomes this clarification.

23.  Article  27 (l)  of  the  present  Statute  of  the  Bank  of  Greece  vests  the  General  Council  with  the

power to decide “in questions concerning the design, text, material, denomination and supply of

banknotes, their withdrawal and cancellation.” The ECB notes that this can, of course, only apply

to banknotes denominated in Greek drachma and  not to euro banknotes, which implies that this

provision  will  have  to  be  repealed  as  being  obsolete  after  the  introduction  of  euro  banknotes,

except  for  the  withdrawal  and  cancellation  of  banknotes  denominated  in  Greek  drachma.  This

applies equally to Articles 66, 67 and 68 of the present Statute of the Bank of Greece.  In its letter

dated 12 April 2000, the Bank of Greece confirms that this point will be accommodated through

an explicit limitation of the scope of Articles 27 (1), 66, 67 and 68 to “banknotes denominated in

drachmae”.  The ECB welcomes this clarification.

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24.   In summary, the ECB welcomes the Draft Statute of the Bank of Greece.  The ECB notes that,

assuming that the draft amendments to the Statute of the Bank of Greece will be adopted by its

General Assembly of Shareholders on 25 April 2000, that they will be ratified by Parliament and

that  they  will  enter  into  force  on  time,  as  they  were  presented  to  the  ECB  in  the  present

consultation procedure, and assuming that Law 2548/1997 will be adapted accordingly, there will

be no remaining imperfections in the Statute of the Bank of Greece relating to the requirements of

the Treaty and the ESCB/ECB Statute for the full legal integration of the Bank of Greece in the

Eurosystem.

25.  The  ECB  confirms  that  it  has  no  objection  to  this  ECB  Opinion  being  made  public  by  the

competent national authorities at their discretion.

Done at Frankfurt am Main on 17 April 2000.

The President of the ECB

[signed]

Willem F. Duisenberg

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