Opinion of the European Central Bank of 29 May 2013 on the Hellenic Financial Stability Fund (CON/2013/38)
Date: 2013-05-29
Institutions: European Central Bank
Subjects: Greece, financial stability, institutional activity, national law, public institution

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

29 May 2013 

on the Hellenic Financial Stability Fund 

(CON/2013/38) 

Introduction and legal basis 

On  24  April  2013,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Greek  Ministry  of 

Finance for an opinion on certain draft legislative provisions amending the Law on the Hellenic Financial 
Stability  Fund  (hereinafter  the  ‘HFSF  Law’)1.  The  draft  provisions  were  submitted  to  the  Hellenic 
Parliament on 26 April 2013 and adopted on 28 April 20132. 

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  (TFEU)  and  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  provisions3,  as  the  draft  provisions  relate  to  the  representation  of  the  ECB  in  the  Hellenic 

Financial Stability Fund’s (HFSF) governing bodies and to the strengthening of the HFSF’s governance 

structure  in  view  of its  crucial role in the  process  of the recapitalisation  and restructuring  of the  Greek 

banking  sector.  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 aim at implementing the commitments undertaken by the Greek government 

in the context of the second review of the second economic adjustment programme for Greece to 

(a)  strengthen  the  HFSF’s  governance  structure;  (b)  rationalise  the  division  of  tasks  between  the 

HFSF’s General Council and Executive Board; and (c) strengthen the HFSF’s independence. 

1.2  The draft provisions, inter alia, alter the composition of the HFSF’s General Council by increasing 

its members from five to seven; amend the rules relating to the competences of the HFSF’s General 

Council  and  Executive  Board;  and  enhance  the  tasks  of  the  HFSF’s  Managing  Director. 

Furthermore, the draft provisions amend the rules relating to the convocation of the meetings and 

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3  

Law No 3864/2010 on the establishment of the Hellenic Financial Stability Fund, FEK A 119/21.07.2010. 
See  Article  1  subparagraph  D.3 of  Law  4152/2013  on  urgent  measures  implementing  laws  4046/2012, 4093/2012  and 
4127/2013, FEK A 107/09.05.2013. 
OJ L 189, 3.7.1998, p. 42. 

 
 
 
 
                                                 
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the  validity  of  the  decisions  of  the  HFSF’s  General  Council  and  Executive  Board,  and  to  the 

quorum required for the meetings of the HFSF's General Council. 

1.3  Finally,  the  draft  provisions  amend  the  rules  relating  to  the  representation  of  the  ECB  and  the 

European  Commission  in  the  HFSF,  by  clarifying  that  the  ECB  and  Commission  representatives 

may:  (a)  participate  as  observers  in  the  committee  selecting  members  of  the  HFSF’s  General 

Council  and  Executive  Board;  and  (b)  attend  the  meetings  of  the  HFSF’s  General  Council  and 

Executive Board as observers without voting rights. 

2.   Appropriate time to consult the ECB 

According to Article 4 of Decision 98/415/EC, the ECB must be consulted ‘at an appropriate stage’ in the 

legislative  process  in  order  to  afford  the  ECB  sufficient  time  to  adopt  its  opinion.  In  certain  cases,  the 

consulting  authority  may  invoke  reasons  of  extreme  urgency  and  request  that  the  ECB  might  adopt  its 

opinion within a shorter time frame. 

In the present case, the consulting authority did not provide the ECB with a specific time frame within 

which  to  adopt  its  opinion.  Furthermore,  the  draft  provisions  were  adopted  by  the  Greek  Parliament 

within days of requesting the ECB’s opinion. 

The ECB stresses that even cases of particular urgency do not relieve national authorities of their duty to 

consult the ECB at an appropriate stage in the legislative process and to allow sufficient time to take into 

account its views in accordance with Decision 98/415/EC. 

3. 

General observations 

The ECB welcomes the draft provisions, to the extent that they aim to amend the HFSF framework in line 

with the financial sector objectives outlined by the Greek authorities in the Memorandum of Economic 
and  Financial  Policies,  as  applicable  from  time  to  time4.  In  relation  to  the  evolution  of  the 

abovementioned  legal  framework,  the  ECB  refers  the  consulting  authority  to  its  previous,  relevant 
opinions5. Without prejudice to this general observation, the ECB has the following specific observations. 

4. 

HFSF’s governance structure 

4.1  The  ECB  understands  that  the  proposed  amendments  to  the  HFSF’s  governance  structure  aim  at 

clarifying the competences and responsibilities of the HFSF’s governing bodies and optimising the 

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5  

Annex  V  to  Law  No  4046/2012  on  the  approval  of  the  draft  financing  agreements  between  the  European  Financial 
Stability Fund, the Hellenic Republic and the Bank of Greece and of the draft Memorandum of Understanding between 
the Hellenic Republic, the European Commission and the Bank of Greece and other provisions of utmost importance for 
reducing the public debt and saving the national economy (FEK A 28/14.12.2012). 
See,  in  particular,  Opinions  CON/2010/54,  CON/2012/14,  CON/2012/90  and  CON/2013/17.  All  ECB  opinions  are 
published on the ECB’s website at www.ecb.europa.eu. 

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HFSF’s  operation  in  order  to  support  it  in  its  efforts  for  an  ambitious  and  swift  operational 

restructuring of all banks in which it has a significant stake. 

4.2  The ECB emphasises that the enhancement of the HFSF’s governance structure has been pursued 

since the agreement on the second economic adjustment programme for Greece in March 2012, on 

account of the very substantial amount of official financing that is being channelled to Greek banks 
through  the  HFSF6.  Moreover,  the  ECB  notes  that  the  Greek  authorities  have  already,  since  the 

time of the agreement on the first economic adjustment programme for Greece in 2010, undertaken 

to  ensure  that  the  HFSF  will  be  governed  by  private  law,  that  it  will  enjoy  administrative  and 

financial independence, and that it will operate purely in accordance with private economic activity 
standards7. 

4.3  The  ECB  considers  that  any  amendment  to  the  HFSF’s  governance  structure  should  take  into 

consideration  all  the  commitments  undertaken  by  the  Greek  government  under  the  economic 

adjustment programme for Greece and aim at enabling the HFSF to pursue effectively its critical 

mandate, which is to maintain the stability of the Greek banking system and to minimise costs for 

the  taxpayer.  Against  this  background,  the  ECB  considers  that,  although  the  draft  provisions 

improve to some extent the HFSF’s operation, they do not contribute substantially to enhancing the 

independent and effective fulfilment of the HFSF’s mandate. In particular, the ECB welcomes the 

fact that the independence of the HFSF’s General Council is enhanced by means of the addition of 

two  independent  members.  At  the  same  time,  the  ECB  is  of  the  view  that  the  competences  and 

responsibilities  of  the  HFSF’s  governing  bodies  should  be  clarified  further  in  order  to  facilitate 

more  effective  practical  decision-making.  More  specifically,  the  ECB  understands  that,  although 

the HFSF’s General Council has the status of a supervisory body, it exercises significant decision-
making powers upon proposal from the Executive Board8. The HFSF framework should ensure that 

the two governing bodies of the HFSF bear adequate responsibility for the HFSF’s decisions, that 

they  cooperate  efficiently,  that  the  boundaries of their  respective  competences  are  clear,  and  that 

these boundaries are also reflected in the internal rules of procedure of the HFSF. 

5. 

Representation of the ECB in the HFSF 

5.1  The ECB welcomes the draft provisions relating to the ECB’s representation in the HFSF, as these 

are broadly in line with the ECB representative’s mandate within the HFSF, which has always been 
limited to that of an observer, without decision-making authority9. 

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7  
8  
9  

The Second Economic  Adjustment Programme  for  Greece - March 2012’,  European Economy-Occasional Papers, 94, 
p. 3. 
See, in particular, ECB opinion CON/2010/54, paragraph 1.2.1. See, also, Article 1 of Law 3864/2010. 
See Article 4(9) of the HFSF Law. 
See Opinion CON/2012/90, paragraph 8. 

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5.2  The  ECB  nevertheless  wishes  to  reiterate  its  position  that  the  provision  in  Article 4(13)  of  the 

HFSF  Law  entitling  the  ECB’s  representative  to  request  the  convocation  of  a  meeting  of  the 

General Council should be deleted, given that this goes beyond mere observer status of the ECB 
representative10. 

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

Done at Frankfurt am Main, 29 May 2013. 

[signed] 

The President of the ECB 

Mario DRAGHI 

10  

See Opinion CON/2012/90, paragraph 8. 

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