Opinion of the European Central Bank of 20 August 2009 on an extension to Narodowy Bank Polski’s entitlement to trade in securities (CON/2009/67)
Date: 2009-08-20
Institutions: European Central Bank
Subjects: Poland, State aid, central bank, national law, public institution, road building, securities, stock exchange

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 20 August 2009 

on an extension to Narodowy Bank Polski’s entitlement to trade in securities  

(CON/2009/67) 

Introduction and legal basis 

On  27  July  2009  the  European  Central  Bank  (ECB)  received  a  request  from  the  Polish  Minister  for 

Finance for an opinion on a draft law amending the Law on motorways and the National Road Fund and 

the Law on Narodowy Bank Polski (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  Narodowy  Bank  Polski  (NBP).  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 National Road Fund2, operated by Bank Gospodarstwa Krajowego (BGK)3, supports the financing of 

road and motorway construction in Poland. The draft law: (a) adds loans extended by the State budget to 

the list of available financing sources; and (b) regulates the procedure under which Treasury-guaranteed 
bonds are issued by BGK for the benefit of the National Road Fund4. One of the distribution channels of 
such bonds may be auctions organised, inter alia, by NBP, under an agreement entered into with BGK5. 

To enable NBP to organise such auctions, Article 2 of the draft law amends Article 48(3) of the Law on 
Narodowy Bank Polski6 by extending the NBP’s entitlement to organise trading in securities to cover, in 

addition to securities issued by the Treasury, securities bearing the Treasury’s guarantees or sureties. 

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2  

3  
4  
5  
6 

OJ L 189, 3.7.1998, p. 42. 
As regulated under the Law of 27 October 1994 on motorways and the National Road Fund, consolidated text: Dziennik 
Ustaw (Dz. U.) of 2004 No 256, Item 2571. 
BGK is the only Polish credit institution established by legislation as a State bank.  
See explanatory memorandum to the draft law, p. 1.  
New Article 39r added in the Law on motorways and the National Road Fund by Article 1(2) of the draft law. 
Law of 29 August 1997 on Narodowy Bank Polski, consolidated text: Dz. U. of 2005 No 1, Item 2. 

 
 
 
 
                                                 
2. 

Timing of the consultation  

The  ECB  received  the  consultation  request  after  adoption  of  the  draft  law  by  the  Sejm  and  only  a  few 

days  before  consideration  by  the  Senat.  Article  4  of  Decision  98/415/EC  requires  Member  States  to 

ensure  that  the  ECB  is  consulted  at  an  appropriate  stage  enabling  the  authority  initiating  the  draft 

legislative provision to take into consideration the ECB’s opinion before deciding on the substance. 

3. 

Role of NBP and the monetary financing prohibition 

The ECB understands that the draft law foresees provision by NBP of the fiscal agent services related to 

the organisation of auctions of Treasury-guaranteed bonds issued by a public undertaking (BGK) on the 

basis  of  the  agreement  between  NBP  and  BGK  providing  for  NBP’s  remuneration  at  market  rates. 

Provision of such services by an ESCB central bank needs to be assessed as regards its compliance with 

the monetary financing prohibition set out in Article 101 of the Treaty and forbidding public undertakings 

or other public sector entities of the Member States from obtaining overdraft facilities or any other type of 

credit facility with the national central bank. Furthermore, under Article 1(1)(b)(ii) of Council Regulation 

(EC)  No  3603/93  of  13  December  1993  specifying  definitions  for  the  application  of  the  prohibitions 
referred to in Articles 104 [101] and 104b(1) [103(1)] of the Treaty7, the monetary financing prohibition 

relates inter alia to central bank financing of the public sector’s obligations vis-à-vis third parties. Taking 

into  account  the  express  recognition  in  Article  21.2  of  the  Statute  of  the  European  System  of  Central 

Banks  and  of  the  European  Central  Bank  of  the  provision  of  fiscal  agency  services  as  a  legitimate 
function traditionally performed by central banks, the ECB notes8 that provision by central banks of fiscal 

agency services should comply with the prohibition on monetary financing, provided that such services 

remain within the field of the fiscal agency function and do not constitute central bank crediting of the 
public sector outside the narrowly defined exceptions specified in Regulation (EC) No 3603/939 or central 
bank  financing  of  public  sector  obligations  vis-à-vis  third  parties10.  Moreover,  following  previous  ECB 

opinions,  even  if  Article 101(1)  refers  literally  to  ‘credit  facilities’,  i.e.  facilities  extended  with  the 

obligation to repay, this prohibition may also apply a fortiori to other forms of funding, i.e. without the 

obligation to repay, since Article 101 of the Treaty has the overall aim of public finance discipline and of 

prohibiting  national  central  banks  from  financing  the  public  sector.  This  implies  that  both  the  ultimate 
objective and the spirit of these provisions must be taken into account in their interpretation11. The ECB 

7  
8  

9  

10  

11  

OJ L 332, 31.12.1993, p. 1. 
See  ECB  Opinion  CON/2009/23,  paragraph  2.2;  all  ECB  opinions  are  available  on  the  ECB’s  website  at 
www.ecb.europa.eu. See also the ECB’s Convergence Report of May 2008, p. 24, stating that ‘The purpose of Article 
21.2  of  the  Statute  was  to  enable  NCBs,  following  transfer  of  the  monetary  policy  competence  to  the  Eurosystem,  to 
continue  to  conduct  the  fiscal  agent  service  traditionally  provided  by  central  banks  to  governments  and  other  public 
entities without automatically breaching the monetary financing prohibition.’ 
See  Article  4  (non-extendable  intra-day  credits),  Article  5  (crediting,  under  specified  conditions,  the  public  sector’s 
account with cheques issued by third parties) and Article 6 (holding, within specified limits, coins issued by and credited 
to the public sector). 
See  the  ECB’s  Convergence  Report  of  May  2008,  p. 233,  which  states  that  provision  by  Česká  národní  banka  of 
administrative  support  to  the  Financial  Arbitrator,  an  administrative  body  entirely  independent  from  the  central  bank, 
‘constitutes a form of central bank financing of the public sector’s obligations’. 
See ECB Opinion CON/2003/27, paragraph 9 and ECB Opinion CON/2009/59, paragraph 2.2(b). 

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considers in this context that provision by NBP of the fiscal agent services foreseen by the draft law does 

not raise concerns as regards its compliance with the monetary financing prohibition.  

Conclusion 

The ECB has no objections to the draft law. 

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

Done at Frankfurt am Main, 20 August 2009. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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