Opinion of the European Central Bank of 16 December 2005 at the request of the Slovene Ministry of Economic Affairs on the provisions of the draft Companies Act concerning redenomination resulting from the introduction of the euro (CON/2005/57)
Date: 2005-12-16
Institutions: European Central Bank
Subjects: Slovenia, euro, monetary integration, money, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 16 December 2005 

at the request of the Slovene Ministry of Economic Affairs on the provisions of the draft Companies 

Act concerning redenomination resulting from the introduction of the euro 

(CON/2005/57) 

1. 

On  22  November  2005  the  European  Central  Bank  (ECB)  received  a  request  from  the  Slovene 

Ministry  of  Economic  Affairs  for  an  opinion  on  the  provisions  of  the  draft  Companies  Act 

concerning redenomination resulting from the introduction of the euro (hereinafter the ‘draft law’).  

2. 

The ECB’s competence to deliver an opinion is based on the first and sixth 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 contains provisions 

concerning  currency  matters  and  the  stability  of  equity  markets.  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. 

The draft law is the first Slovene legal act addressing the euro changeover on which the ECB has 

been consulted. Its objective is to lay down simplified rules in relation to the redenomination into 

euro  of  the  capital  of  public  limited  companies  and  limited  liability  companies.  The  ECB 

understands the draft law to be a first phase in the process of preparing the Slovene legal system for 

the  introduction  of  the  euro.  It  assumes  that  the  draft  law  will  be  supplemented  by  additional 

legislation, in particular the law governing the introduction of the euro referred to in the draft law’s 

transitional and final provisions. 

4. 

The  ECB  welcomes  the  Slovene  Government’s  initiative  to  start  preparing  early  for  the 

introduction  of  the  euro,  to  ensure  the  timely  implementation  of  the  measures  necessary  for  the 

transition. 

5. 

However,  regarding  the  name  of  the  single  currency,  the  ECB  notes  that  the  Slovene  language 

version of the draft law refers to the ‘evro’ in the nominative singular case as opposed to the ‘euro’. 

The ECB would like to remind the Slovene authorities that Article 2 of Council Regulation (EC) 
No 974/98 of 3 May 1998 on the introduction of the euro2 stipulates that ‘… the currency of the 

1  
2  

OJ L 189, 3.7.1998, p. 42. 
OJ L 139, 11.5.98, p. 1. Regulation as amended by Regulation (EC) No 2596/2000 (OJ L 300, 29.11.2000, p. 2). 

 
 
 
                                                           
participating  Member  States  shall  be  the  euro’3.  Recital  2  to  this  Regulation  notes  that,  at  its 

meeting  in  Madrid  on  15  and  16  December  1995,  the  European  Council  considered  that  ‘…  the 

name of the single currency must be the same in all the official languages of the European Union, 

taking into account the existence of different alphabets’. Taken together, these two provisions make 

it clear that the name of the single currency is the ‘euro’ and that this name should be identical in 

all  legal  acts  published  in  Community  languages.  Furthermore,  the  ECB  would  like  to  note  that 

new Member States are under an unquestionable legal obligation to comply with decisions taken by 
the European Council, pursuant to Article 5(3) of the Act concerning the conditions of accession4. 

Thus,  the  conclusions  of  the  Madrid  European  Council  with  regard  to  the  name  of  the  single 

currency  are  binding  on  the  new  Member  States.  The  Community,  as  the  exclusive  holder  of 

competence  in  monetary  matters,  determines  alone  the  name  of  the  single  currency.  As  a  single 

currency,  the  name  of  the  euro  needs  to  be  identical  in  the  nominative  singular  case  in  all 

Community  languages  to  ensure  that  its  singleness  is  apparent.  On  the  basis  of  these  legal 

considerations, and in view of the supremacy of Community law, the ECB is of the opinion that the 

name of the single currency in the nominative singular case is legally required to be consistently 
rendered in all national legal acts as the ‘euro’5. 

6.  Moreover,  the  reference  in  the  draft  law  to  ‘…  conversion  rate  defined  in  the  law  governing  the 
introduction of the euro’6 is not appropriate since Community secondary law on monetary matters, 

including the conversion rates adopted in accordance with Article 123(5) of the Treaty establishing 

the European Community, are directly applicable in the Member States. The conversion rate will 

be defined in a Community regulation. 

7. 

The provisions on redenomination of corporate equity do not of themselves raise any concerns; on 

the contrary, they appear to be helpful provisions which will facilitate the changeover process. The 

draft  law  facilitates  the  redenomination  of  the  capital  of  public  limited  companies  and  limited 

liability  companies  by  means  of  a  simplified  procedure,  without  any  additional  costs  for 

companies, and settles the rounding problems that may occur as a result of such redenomination. It 

introduces  provisions  regarding  the  methods  and  procedure  for  converting  the  nominal  values  of 

shares and the share capital of public limited companies and limited liability companies, as well as 

details regarding the euro changeover procedure for these companies. 

8.  Moreover, the draft law provides for non-par value shares   as  an alternative to redenomination of 

shares  into  euro.  This  solution  was  recommended  by  the  European  Commission  as  with  non-par 

3  

4  

5  

6  

See  the  English  language  version  of  Regulation  (EC)  No  974/98  and  all  the  other  official  language  versions,  with  the 
exception of the Greek language version. 
Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the 
Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, 
the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is 
founded (OJ L 236, 23.9.2003, p. 33).  
See paragraph 10 of ECB Opinion CON/2005/21 of 14 June 2005 at the request of Lietuvos Bankas on a draft law on the 
adoption of the euro and Section 2.4 of ECB Opinion CON/2005/51 of 1 December 2005 on a proposal for a Council 
Regulation amending Regulation (EC) No 974/98 on the introduction of the euro. 
Article 693 of the draft law. 

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value shares there is no need for physical exchange of share certificates7. The share prices can be 

adjusted by simple splitting and there is no need for capital adjustment. Furthermore, such shares 
are allowed by the Second Company Law Directive8. The provisions regarding the introduction of 

non-par value shares are welcome since they introduce flexibility and simplicity. 

9. 

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

Done at Frankfurt am Main, 16 December 2005. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

7  

8  

See  ‘The  Impact  of  the  introduction  of  the euro on  capital  markets’,  Commission  Communication  (Euro  Paper No  03, 
July 1997; available on the European Commission’s website at www.europa.eu.int ), p. 3. 
Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, for the protection of 
the  interests  of  members  and  others,  are  required  by  Member  States  of  companies  within  the  meaning  of  the  second 
paragraph  of  Article  58  of  the  Treaty,  in  respect  of  the  formation  of  public  limited  liability  companies  and  the 
maintenance and alteration of their capital, with a view to making such safeguards equivalent (OJ L 26, 31.1.1977, p. 1). 
Directive as last amended by the Act concerning the conditions of accession. 

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