Opinion of the European Central Bank of 26 October 2005 at the request of Lietuvos bankas on a draft law amending Article 125 of the Constitution of the Republic of Lithuania (CON/2005/38)
Date: 2005-10-26
Institutions: European Central Bank
Subjects: Lithuania, constitution, euro, issuing of currency, monetary integration, money, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 26 October 2005 

at the request of Lietuvos bankas 

on a draft law amending Article 125 of the Constitution of the Republic of Lithuania 

(CON/2005/38) 

1. 

On 30 September 2005 the European Central Bank (ECB) received a request from Lietuvos bankas 

for an opinion on a draft law amending Article 125 of the Constitution of the Republic of Lithuania 

(hereinafter the ‘draft law’).  

2. 

The ECB’s competence to deliver an opinion is based on the first and third indents of Article 2(1) 

of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank 
by  national  authorities  regarding  draft  legislative  provisions1,  as  the  draft  law  relates  to  currency 

matters and Lietuvos bankas. In accordance with the first sentence of Article 17.5 of the Rules of 

Procedure of the European Central Bank, the Governing Council has adopted this opinion. 

3. 

Article 125(2) of the Constitution of the Republic of Lithuania currently provides that ‘the right of 

issue of currency shall belong exclusively to Lietuvos bankas’. The draft law amends this article so 

that it reads ‘the right of issue of currency shall belong to Lietuvos bankas’. The word ‘exclusively’ 

is therefore deleted. The ECB notes, however, that further changes to Article 125(2) are necessary 

in order to ensure, upon adoption of the euro by Lithuania, that the Constitution is compatible with 

the  Treaty  establishing  the  European  Community  and  the  Statute  of  the  European  System  of 

Central  Banks  and  of  the  European  Central  Bank.  It  is  recalled  that  the  ECB’s  Convergence 

Report 2004  stated  that  all  national  legislation  referring  to  Lithuania’s  national  currency  must  be 

brought in line with the Treaty and the Statute.  

In this context, the ECB raises two major concerns. First, the competence to issue euro banknotes 

derives from Article 106(1) of the Treaty and Article 16 of the Statute which provide that the ECB 

and the national central banks of the Member States which have adopted the euro (hereinafter the 

‘participating  Member  States’)  may  issue  banknotes  which  are  the  only  banknotes  to  have  legal 

tender status within the participating Member States. It is therefore Community law that foresees a 

plurality  of  issuers  of  euro  banknotes,  including  Lietuvos  bankas  when  the  euro  is  eventually 

introduced in Lithuania. The draft law fails to recognise that the power to issue euro banknotes is 

based on Community not national law, and that it foresees a plurality of issuers. 

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OJ L 189, 3.7.1998, p. 42. 

 
 
 
                                                      
Second,  Article  106(1)  of  the  Treaty  and  Article  16  of  the  Statute  provide  that  the  ECB’s 

Governing  Council  has  the  exclusive  right  to  authorise  the  issue  of  banknotes  within  the 

Community, and, under Article 106(2) of the Treaty, it also has the right to approve the volume of 

the issue of euro coins by Member States. The issuance of euro banknotes and coins is therefore 

subject  to  the  conditions  listed  in  the  Treaty  and  the  Statute.  National  legislation  must  recognise 

that the Governing Council has such rights; the current wording of the draft law does not do so.  

In order to address these concerns and to eliminate incompatibilities, the ECB suggests inserting in 

the draft law references to the Treaty and the Statute. In particular, the draft law should state that 

Lietuvos  bankas  ‘shall  have  the  right,  in  accordance  with  the  Treaty  establishing  the  European 

Community, to issue banknotes’. To the extent that Lietuvos bankas is also entrusted to issue coins, 

the  draft  law  should  provide  that  Lietuvos  bankas  ‘shall  have  the  right,  subject  to  the  Treaty 

establishing the European Community, to issue coins’. 

4. 

The draft law is silent as to its date of entry into force. The ECB notes that any provisions thereof 

recognising that the power to issue euro banknotes and coins is based on Community law and that 

the ECB has the right to authorise the issue of banknotes and to approve the volume of issuance of 

coins should take effect as of the date on which Lithuania’s derogation is abrogated. 

5. 

The ECB notes that the draft law does not address another issue concerning the compatibility of the 

Constitution with the Treaty and the Statute. This concerns the personal independence of the Chair 

of  Lietuvos  bankas’  Board.  Such  independence  is  ensured  by  Article  14.2  of  the  Statute  which 

states,  inter  alia,  that  a  ‘Governor  may  be  relieved  from  office  only  if  he  no  longer  fulfils  the 

conditions  required  for  the  performance  of  his  duties  or  if  he  has  been  guilty  of  serious 

misconduct’. 

6. 

The ECB notes that, in accordance with Article 75 of the Constitution, the Parliament may remove 
officials2  appointed  or  chosen  by  it3  by  a  majority  vote  of  all  members  of  no  confidence  in  the 

officials  in  question.  In  addition,  Article  84(13)  provides  that  the  President  of  the  Republic  may 

recommend that the Parliament express no confidence in the Chair of Lietuvos bankas’ Board. The 

Constitutional  Court  of  the  Republic  of  Lithuania  holds  the  view  that  ‘the  expression  of  no 
confidence is the ground for dismissal of an official appointed or elected by the Parliament’4.  

7. 

The  ECB  considers  that  as  Articles  75  and  84(13)  of  the  Constitution  add  a  new  ground  for 

dismissal, the vote of no confidence, they do not comply with Article 14.2 of the Statute. The ECB 

(and, previously, the European Monetary Institute) has repeatedly affirmed that national law cannot 

provide for any other grounds than the ones foreseen by Article 14.2 of the Statute for dismissal of 

2  

3  

4  

Article 126(2) of the Constitution states that the Chair of Lietuvos bankas’ Board is appointed by the Parliament on the 
recommendation of the President of the Republic.  
With the exception of the persons specified in Article 74 of the Constitution. Article 74 of the Constitution concerns the 
impeachment procedure, which does not apply to the Chair of Lietuvos bankas’ Board. 
Ruling of the Constitutional Court of the Republic of Lithuania of 24 January 2003 (Valstybės žinios, 2003, No 10-366). 

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governors5.  In  particular,  in  the  Convergence  Report  2004  the  ECB  observed  that  ‘under 

Articles 75  and  84(13)  of  the  Constitution,  Lithuania’s  Parliament  …  may  remove  officials 

appointed  or  chosen  by  the  Parliament,  including  the  Chair  of  Lietuvos  bankas’  Board,  by  a 

majority  vote  by  all  members  of  no  confidence  in  the  officials  in  question.  The  ground  for 

dismissal,  the  vote  of  no  confidence,  does  not  comply  with  Article  14.2  of  the  Statute,  and 
therefore must be adapted accordingly’6.  

8. 

Taking into account that the procedure for the dismissal of the Chair of Lietuvos bankas’ Board is 

set  out  in  Articles  10(4)  and  12(2)  and  (3)  of  the  Lietuvos  bankas  Act  and  that  these  provisions 
refer  to  the  grounds  for  dismissal  listed  in  Article  12(1)  thereof7,  the  incompatibilities  of 

Articles 75 and 84(13) of the Constitution with the Treaty and the Statute should be removed by 

excluding  the  Chair  of  Lietuvos  bankas’  Board  from  the  scope  of  application  of  Articles  75  and 

84(13) of the Constitution.   

9. 

The compliance of Lithuanian law with the Treaty and the Statute will be assessed in accordance 

with the procedure laid down in Article 122(2) of the Treaty.  

10.  This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 26 October 2005. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

5  

6  
7  

See,  for  example,  European  Monetary  Institute,  Progress  Towards  Convergence  1996,  p.  101;  European  Monetary 
Institute,  Convergence  Report:  Report  required  by  Article  109j  of  the  Treaty  establishing  the  European  Community 
(1998), pp. 12, 294; European Central Bank, Convergence Report 2004, p. 27.  
P. 225.  
Article 12(1) of the Lietuvos bankas Act provides, inter alia, that the Chair of Lietuvos bankas’ Board is dismissed prior 
to  the  expiration  of  his/her  term  of  office  only  if  he/she  does  not  fulfil  the  conditions  required  for  the  performance  of 
his/her duties or he/she has been found guilty of serious misconduct. 

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