Opinion of the European Central Bank of 21 November 2008 at the request of Българска народна банка (Bulgarian National Bank) on a draft law amending the Law on Българска народна банка (Bulgarian National Bank) (CON/2008/73)
Date: 2008-11-21
Institutions: European Central Bank
Subjects: central bank, economic convergence

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 21 November 2008  

at the request of Българска народна банка (Bulgarian National Bank) 

on a draft law amending the Law on Българска народна банка (Bulgarian National Bank) 

(CON/2008/73) 

Introduction and legal basis 

On  22  October  2008  the  European  Central  Bank  (ECB)  received  a  request  from  the  Governor  of 

Българска народна банка (Bulgarian National Bank) (BNB) for an opinion on a draft law amending the 

Law  on  Българска  народна  банка  (Bulgarian  National  Bank)  (hereinafter  the  ‘Law  on  BNB’)  and  on 

13 November 2008  the  ECB  received  a  revised  version  of  this  draft  law  amending  the  Law  on  BNB 

(hereinafter the ‘draft law’). 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European Community and the third indent 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 BNB. 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. 

1.  

Purpose of the draft law 

The  main  purpose  of  the  draft  law  is  to  address  the  observations  in  the  ECB’s  Convergence  Report  of 
May 20082  on  legal  convergence  and  in  the  European  Commission’s  Convergence  Report  of  20083. 
In particular, the amendments aim to align the Law on BNB4 with the requirements for institutional and 

personal  independence,  confidentiality  and  with  the  monetary  financing  prohibition  laid  down  in 

Article 101  of  the  Treaty.  Finally,  the  draft  law  contains  other  functional,  conceptual  and  sanctioning 

provisions concerning BNB unconnected with the ECB’s Convergence Report. 

2. 

General observations  

2.1  The  ECB  welcomes  the  Bulgarian  authorities'  efforts  to  achieve  the  required  level  of  legal 

convergence by following the recommendations in  the ECB’s Convergence Report. Bulgaria is  a 

1 
2 
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4 

OJ L 189, 3.7.1998, p. 42.  
See the ECB’s Convergence Report of May 2008, pp. 229-231. 
COM(2008) 248 final, available on the Commission’s website at www.ec.europa.eu. 
Law on BNB, published in Darjaven Vestnik No 46, 10.6.1997. 

 
 
 
 
 
                                                 
Member State with a derogation and must therefore comply with Article 109 of the Treaty5. In this 

respect,  the  ECB  identified  in  its  Convergence  Report  inconsistencies  between  Bulgarian 

legislation,  on  the  one  hand,  and  the  Treaty  and  the  Statute  of  the  European  System  of  Central 

Banks  and  the  European  Central  Bank  (hereinafter  the  ‘ESCB  Statute’),  on  the  other  hand.  This 

opinion addresses the inconsistencies in the areas of central bank independence, confidentiality and 

the prohibition on monetary financing and privileged access.  

2.2  This opinion does not address the other incompatibilities between Bulgarian law and Community 

law with regard to BNB’s integration into the Eurosystem, relating to monetary policy, collection 

of statistics, official foreign reserve management, payment systems, issue of banknotes and coins, 

appointment  of  independent  auditors,  financial  reporting,  exchange  rate  policy  and  international 

cooperation, as they fall outside the scope of the draft law. In this respect, the Law on BNB would 

need further adaptation to ensure BNB’s full integration into the Eurosystem.  

3. 

Specific observations 

3.1 

Institutional independence 

The proposed amendment to Article 44 brings this provision in line with Article 108 of the Treaty 

and Article 7 of the ESCB Statute regarding the principle of institutional independence. 

3.2  Personal independence 

Minimum term of office for Governing Council members 

The  proposed  amendment  to  Article  14(2)  removes  the  incompatibility  with  the  ESCB  Statute 

regarding the minimum term of office for the members of BNB’s Governing Council and is in line 

with Article 14.2 of the ESCB Statute.  

Grounds for dismissal of Governing Council members 

Concerning  the  proposed  amendment  to  Article 14(1)  of  the  Law  on  BNB  on  the  grounds  for 
dismissal of a Governing Council member6, the ECB recommends further amending this Article to 

fully mirror the grounds for dismissal laid down in Article 14.2 of the ESCB Statute. In particular, 

the words ‘incompatible with the performance of his duties’ should be deleted in Article 14(1) of 

the draft law. 

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6  

See the ECB’s Convergence Report of May 2008, p. 26: ‘To comply with Article 109 of the Treaty, national legislation 
had  to  be  adjusted  to  ensure  its  compatibility  by  the  date  of  establishment  of  the  ESCB  [European  System  of  Central 
Banks] (as regards Sweden) and by 1 May 2004 or 1 January 2007 (as regards the Member States which joined the EU on 
these dates). Nevertheless, statutory requirements relating to the full legal integration of an NCB [national central bank] 
into  the  Eurosystem  need  only  enter  into  force  at  the  moment  that  full  integration  becomes  effective,  i.e.  the  date  on 
which the Member State with a derogation adopts the euro’. 
In  particular,  this  draft  law  provision  provides  for  the  following:  ‘The  competent  authority  under  Article  12  may  only 
remove  a  member  of  the  Governing  Council  from  office  if  they  no  longer  fulfil  the  conditions  required  for  the 
performance  of  his  duties  or  if  he  has  been  guilty  for  serious  misconduct  incompatible  with  the  performance  of  his 
duties’. 

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Right of judicial review  

Article  14(3)  of  the  draft  law  grants  jurisdiction  to  the  Bulgarian  Supreme  Administrative  Court 

(SAC)  over  decisions  dismissing  any  Governing  Council  member  including  BNB’s  Governor. 

The ECB welcomes this proposed amendment, which will confirm that, for the Governing Council 
members  other  then  the  Governor,  a  national  court  has  jurisdiction  over  dismissal  decisions7. 

Moreover,  concerning  the  Governor,  the  ECB  notes  that  the  proposed  jurisdiction  of  SAC  under 

Article  14(3)  of  the  Law on  BNB  should  be  without  prejudice  to  the  jurisdiction  of  the  Court  of 

Justice of the European Communities under Article 14.2 of the ESCB Statute and Article 14(4) of 

the Law on BNB. 

3.3.   Confidentiality 

The  draft  law  amends  Articles  4(2),  13(1)  and  23(2)  of  the  Law  on  BNB  and  introduces  the 

obligation of professional secrecy for BNB staff and the members of BNB’s Governing Council, 

which is in line with Article 38 of the ESCB Statute.  

3.4  Monetary financing and privileged access 

The  proposed  amendment  to  Article  45(1)  of  the  Law  on  BNB  removes  the  inconsistency  with 

Article 101(1) of the Treaty regarding the range of public sector entities covered by the prohibition 

on  monetary  financing.  Moreover,  acknowledging  the  particularities  arising  from  the  currency-

board  regime,  i.e.  prohibition  on  BNB  extending  credit  to  credit  institutions  other  than  in  the 
context of emergency liquidity operations, the ECB reiterates8 the need to bring Article 45(2) of the 

Law  on  BNB  into  line  with  Article 101(2)  of  the  Treaty.  Such  alignment  would  certainly  be 

mandatory on the introduction of the euro in Bulgaria. 

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

Done at Frankfurt am Main, 21 November 2008. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

7  

8 

The ECB’s Convergence Report of May 2008, p. 20: ‘National legislation should also provide for a right of review by the 
national  courts  of  a  decision  to  dismiss  any  other  member  of  the  decision-making  bodies  of  the  NCB  involved  in  the 
performance of ESCB-related tasks. This right can either be a matter of general law or can take the form of a specific 
provision. Even though it may be said that this right is available under the general law, for legal certainty reasons it could 
be advisable to provide specifically for such a right of review’. 
See the ECB’s Convergence report of May 2008, p. 230. 

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