Opinion of the European Central Bank of 5 April 2012 on the recapitalisation and resolution of credit institutions in Greece (CON/2012/25)
Date: 2012-04-05
Institutions: European Central Bank
Subjects: Greece, claim, credit institution, financial stability, guarantee, liquidation, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

5 April 2012 

on the recapitalisation and resolution of credit institutions in Greece 

(CON/2012/25) 

Introduction and legal basis 

On 25 February 2012, the European Central Bank (ECB) received a request from the Greek Ministry of 

Finance  for  an  opinion  on  a  draft  law  amending  the  legal  framework  for  the  recapitalisation  and 

resolution of credit institutions in Greece (hereinafter the ‘draft law’), on which the ECB issued Opinion 

CON/2012/14 on 28 February 2012. On the same date the ECB received a supplementary request from 

the  Ministry  for  an  opinion  on  draft  provisions  introducing  further  amendments  to  the  draft  law 

(hereinafter the ‘first amending provisions’). The Greek Parliament adopted them on 28 February 2012 as 
Law  4051/20121.  Furthermore,  on  7  March  2012  the  ECB  received  a  request  for  an  opinion  on  draft 

provisions  amending  Law  4051/2012  (hereinafter  the  ‘second  amending  provisions’).  The  Greek 
Parliament adopted them on 8 March 2012 as Law 4056/20122. 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of  the  European  Union  and  the  third  and  sixth  indents  of  Article  2(1) 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 draft law relates to the Bank of Greece and to rules applicable to financial 

institutions  insofar  as  they  materially  influence  the  stability  of  financial  institutions  and  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. 

1.  

Purpose of the draft provisions 

1.1   The  draft  provisions  will  further  align  the  Greek  legal  framework  for  the  recapitalisation  and 
resolution  of  credit  institutions  with  the  financial  sector  and  other  objectives3  set  out  in  the 
Memorandum of Economic and Financial Policies4 (MEFP), by amending Law 3864/2010 on the 

Hellenic Financial Stability Fund (hereinafter the ‘Law on the HFSF’), Law 3601/2007 (hereinafter 

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3  

4  

FEK Α 40/29.02.2012. 
FEK A 52/12.03.2012. 
See  paragraphs  1  and  2  of  ECB  opinion  CON/2012/14.  All  ECB  opinions  are  available  on  the  ECB’s  website  at 
www.ecb.europa.eu. 
Annex V to Law 4046/2012. FEK A 28/14.2.2012.  

 
 
 
 
                                                 
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referred  to  as  the  ‘Banking  Law)  and  Law  3746/2009  on  the  Hellenic  Deposits  and  Insurance 

Guarantee Fund (hereinafter referred to as the ‘Law on the HDIGF’).  

1.2  The purpose of the first amending provisions is mainly to: (i) further specify aspects of the Law on 

the  HFSF,  with  a  view  to  fostering  best  practice  in  decision-making  transparency  and 

accountability within the HFSF’s General Council and Executive Board. They set out more detailed 

rules  on  their  modus  operandi  and  the  HFSF’s  tasks;  (ii)  further  specify  transitional  credit 

institutions and the ranking of creditors’ claims against credit institutions under special liquidation; 

and (iii) further specify the contributions of credit institutions to the HDIGF Resolution Branch, the 

ranking of claims of HDIGF branches against credit institutions under special liquidation and the 

ranking of depositor claims. 

1.3  The second amending provisions: (i) further specify the scope of the HDIGF’s investment authority 

to  ensure  adequate  diversification  of  investments;  (ii)  clarify  certain  governance  aspects  for  the 

HFSF  and  the  HDIGF;  and  (iii)  in  view  of  financial  developments,  increase  the  total  amount  of 

State guarantees to the Bank of Greece by 50%.  

2. 

General observations 

2.1  The ECB received the additional consultation requests on 28 February and 7 March 2012, while the 

respective  draft  legislation  was  adopted  by  the  Greek  Parliament  on  28  February  and  8  March 
2012,  respectively.  As  underlined  in  several  ECB  opinions5,  even  in  cases  of  extreme  urgency 

national authorities are not relieved from their duty to consult the ECB and to allow sufficient time 

to  take  the  ECB’s  views  into  account  as  laid  down  in  Articles  127(4)  and  282(5)  of  the  Treaty. 

Article 3(4) of Decision 98/415/EC obliges Member States to suspend the process of adoption of 

draft legislative provisions pending receipt of the ECB’s opinion. Article 4 of Decision 98/415/EC 
provides  that  the  ECB  must  be  consulted  ‘at  an  appropriate  stage’  in  the  legislative  process6, 

‘enabling the authority initiating the draft legislative provision to take into consideration the ECB’s 

opinion  before  taking  its  decision  on  the  substance’.  Member  States  must  also  ensure  ‘that  the 

opinion received from the ECB is brought to the knowledge of the adopting authority if the latter is 

an authority other than that which has prepared the legislative provisions concerned’. 

2.2 

In  relation  to  the  recent  amendments  to  the  basic  legal  framework  underlying  the  resolution  and 

recapitalisation of credit institutions in Greece, the ECB refers to Opinion CON/2012/14. Overall 

the  ECB  welcomes  the  amending  provisions  which  appear  to  complement  this  basic  legal 

framework in line with the MEFP.  

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6  

See the most recent ECB opinions CON/2012/4, CON/2012/9 and CON/2012/13.
This implies that the consultation should take place at a point in the legislative process that affords the ECB sufficient 
time  to  examine  the  draft  legislative  provisions  and  to  adopt  its  opinion  in  all  required  language  versions,  and  also 
enables the relevant national authorities to take the ECB’s opinion into account before the provisions are adopted. 

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3. 

HDIGF’s status as privileged creditor 

Articles 13Α(4) and 4(16) of the Law on the HDIGF, respectively amended by paragraphs 45 and 46 of 

the  first  amending  provisions,  delimit  the  scope  of  the  priority  rule  for  the  claims  of  HDIGF  branches 

against  a  credit  institution  under  special  liquidation  and  for  depositor  claims,  by  reference  to  the 
provisions  of  the  Greek  Bankruptcy  Code  on  privileged  claims7.  Moreover,  paragraph  43  of  the  first 

amending provisions adds a new paragraph 4 to Article 68 of the Banking Law, to provide that where the 

special liquidation of a credit institution involves claims with a privilege over a certain thing or amount of 

money,  Article  156  of  the  Greek  Bankruptcy  Code  applies,  except  to  rights  resulting  from  financial 
collateral arrangements within the meaning of Article 2 of Law 3301/20048, in which case the collateral 

taker is satisfied from the collateral in full, to the exclusion of all other claims under Article 154 of the 

Bankruptcy  Code  and  Articles  13Α(4)  and  4(16)  of  the  Law  on  the  HDIGF.  The  ECB  welcomes  these 

draft provisions, as they clarify the scope of the priority rule by reference to the Greek bankruptcy code 

provisions on privileges and to the Greek legislation transposing Directive 2002/47/EC of the European 
Parliament and of the Council of 6 June 2002 on financial collateral arrangements9, for the purposes of 

insulating claims under financial collateral arrangements as defined in the Directive. In this context the 

ECB understands that the priority of the Bank of Greece’s claims, in accordance with the latter’s statutory 

provisions, is not affected by the priority arrangements set out in the draft provisions.  

4. 

Increased State guarantee to the Bank of Greece  

Paragraph 1 of the second amending provisions provides that the total amount of State guarantees under 
Decision of the Deputy Minister for Finance No 2/43219/0025/6.5.201110, as amended, will be increased 

by 50%. The ECB welcomes the increase of State guarantees to the Bank of Greece, on the basis of which 

liquidity may be disbursed by the Bank of Greece to solvent credit institutions with short term liquidity 

problems. 

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

Done at Frankfurt am Main, 5 April 2012. 

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Law 3588/2007 (FEK A 153/10.7.2007). 
FEK A 263/23.12.2004. 
OJ L 168, 27.6.2002, p. 43. 
FEK Β 1143/06.06.2011. 

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[signed] 

The President of the ECB 

Mario DRAGHI