Opinion of the European Central Bank of 15 April 2013 on the framework for State guarantees and on State guarantees for Dexia SA and Dexia Crédit Local SA (CON/2013/27)
Date: 2013-04-15
Institutions: European Central Bank
Subjects: Belgium, State aid, financial institution, financial stability, guarantee, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 15 April 2013 

on the framework for State guarantees and on State guarantees for  

Dexia SA and Dexia Crédit Local SA 

(CON/2013/27) 

Introduction and legal basis 

On  9  April  2013,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Nationale  Bank  van 

België/Banque Nationale de Belgique (NBB), acting on behalf of the Belgian Ministry of Finance, for an 

opinion  on  a  draft  law  amending  the  Law  of  22  February  1998  establishing  the  Organic  Statute  of  the 

Nationale  Bank  van  België/Banque  Nationale  de  Belgique  (hereinafter  the  ‘draft  law’).  The  ECB  was 

requested to deliver an opinion as a matter of extreme urgency. 

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

Functioning of the European Union and the sixth 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,  since  the  draft  law  relates  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 law 

1.1   The changes introduced by the draft law are twofold: (i) it will introduce a ceiling on the amount in 

respect  of  which  the  King  may  establish  a  guarantee  of  the  State  by  royal  decree  under 

Article 36/24 § 1 of the Law of 22 February 1998; and (ii) it will confer statutory law status on the 

Royal Decrees establishing a State guarantee for Dexia SA and Dexia Crédit Local SA (hereinafter 
the ‘Royal Decrees establishing a State guarantee for Dexia’)2. 

1  
2  

OJ L 189, 3.7.1998, p. 42. 
These Royal Decrees are: (i) the Royal Decree of 18 October 2011 granting a State guarantee covering certain liabilities 
of  Dexia  Crédit  Local  SA;  and  (ii)  the  Royal  Decree  of  19  December  2012  amending  the  Royal  Decree  of 
18 October 2011 granting a State guarantee covering certain loans granted to Dexia SA and Dexia Crédit Local SA. The 
ECB opined on an early draft of these decrees in its Opinions CON/2011/79 and CON/2012/100. All ECB Opinions are 
available  on  the  ECB’s  website  at  www.ecb.europa.eu.  According  to  the  Explanatory  Memorandum,  the  annulment  of 
these Royal Decrees is currently being sought before the Belgian Administrative Court (Raad van State/Conseil d’État). 

 
 
 
 
                                                 
ECB-PUBLIC 

1.2  Article  36/24  § 1  of  the  Law  of  22  February  1998  empowers  the  King,  in  the  event  of  a  sudden 

crisis in the financial markets or a serious threat of a systemic crisis, and on the advice of the NBB, 

to adopt by royal decree certain measures aimed at limiting the scale or the consequences of such 

crisis. This provision, originally adopted in 2008 by the Belgian legislator, empowers the King to 

adopt by royal decree derogations to certain specified existing laws, or to establish a framework for 

establishing  a  State  guarantee  covering  defined  types  of  liabilities  or  assets  of  financial 
institutions3.  Under  the  draft  law,  the  power  of  the  King  to  establish  a  guarantee  of  the  Belgian 
State  will  be  limited  to  EUR 25  billion4  in  total.  This  limit  applies  at  group  level  (i.e.  to  related 

institutions within the meaning of the Belgian Companies Code), but not to institutions which are 

linked as a result of the exercise of control over them by the State. The ceiling only applies to the 

principal  amount  of  the  guarantee,  but  not  the  interest  and  incidental  costs  beyond  that  amount, 
which  may  also  be  covered5.  In  addition,  the  draft  law  clarifies  that  subsequent  exchange  rate 

developments  which  would  bring  the  amounts  guaranteed  above  the  threshold  will  not  affect  the 

validity of the guarantee. Furthermore, the ceiling applies only to State guarantees established by 

the King under Article 36/24 § 1 of the Law of 22 February 1998, and is without prejudice to the 

powers of the Belgian Parliament to establish a guarantee of the Belgian State for a higher amount. 

1.3  The draft law will confer statutory law status on the Royal Decrees establishing a State guarantee 

for  Dexia,  through  a  legislative  mechanism  called  ‘ratification’  in  Belgian  law.  Following  their 

ratification by the draft law, the Royal Decrees establishing a State guarantee for Dexia will acquire 

the  same  legal  status  as  statutory  legislation  enacted  by  Parliament,  with  effect  from  their 
respective  dates  of  entry  into  force6.  This  ratification  will  only  modify  the  position  of  the  Royal 

Decrees establishing a State guarantee for Dexia in the hierarchy of legal acts in the Belgian legal 

system,  and  will  not  affect  the  substance  of  these  Royal  Decrees,  whose  provisions  will  remain 

unchanged. 

2.   General observation 

The ECB understands that the draft law aims at reinforcing legal certainty with regard to State guarantees 

granted  by  the  King  in  the  event  of  a  financial  crisis.  The  ECB  generally  takes  a  favourable  view  of 

initiatives of national authorities aimed at enhancing legal certainty and financial stability. It is, however, 

primarily for national authorities to assess the legal soundness of the instruments used to achieve this aim, 

in the context of their specific domestic constitutional order. 

3  

4  
5  
6  

These  include:  (i)  liabilities  entered  into  by  certain  supervised  institutions,  including  direct  or  indirect  subsidiaries,  or 
certain  claims  held  by  these  institutions;  (ii)  losses  incurred  on  certain  assets  or  financial  instruments  by  certain 
supervised  institutions;  and  (iii)  liabilities  entered  into  by  entities  whose  activity  consists  of  acquiring  and  managing 
certain  assets  held  by  supervised  institutions  (respectively,  Article  36/24,  § 1,  2°,  4°  and  5°  of  the  Law  of 
22 February 1998). 
New Article 36/24, § 3, of the Law of 22 February 1998, introduced by Article A of the draft law. 
See Explanatory Memorandum. 
Article B of the draft law; Explanatory Memorandum. 

2 

 
                                                 
ECB-PUBLIC 

3.  

Specific observation 

The Royal Decrees establishing a State guarantee for Dexia will not be subject to the ceiling introduced 

by the draft law, as they will be given statutory law status. The ECB understands that, in any event, the 

ceiling  to  be  introduced  by  the  draft  law  will  not  apply  to  State  guarantees  that  have  been  established 
prior to its entry into force7. From the perspective of legal clarity, the ECB notes that the draft law itself 

does  not  specify  the  date  of  entry  into  force  of  the  ceiling  and  its  effect  with  regard  to  existing  State 

guarantees. 

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

Done at Frankfurt am Main, 15 April 2013. 

[signed] 

The President of the ECB 

Mario DRAGHI 

7  

See Explanatory Memorandum. 

3