Opinion of the European Central Bank of 2 April 2014 on crisis management (CON/2014/24)
Date: 2014-04-02
Institutions: European Central Bank
Subjects: Lithuania, crisis management, monetary policy, national law, public safety

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 2 April 2014 

on crisis management 

(CON/2014/24) 

Introduction and legal basis 

On  26  February  2014,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Office  of  the 

Lithuanian Government for an opinion on a draft law on crisis management (hereinafter the ‘draft law’). 

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 indent of Article 2(1) of Council Decision 98/415/EC1, 

as  the  draft  law  relates  to  Lietuvos  bankas.  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  draft  law  establishes  a  general  legal  framework  for  crisis  management  in  Lithuania.  In 

particular, the draft law (a) defines the aims and objectives of crisis prevention and management, 

(b) lists the entities involved in crisis management, their respective competence and arrangements 

for  cooperation,  and  (c)  provides  for  international  cooperation  with  the  Union  and  the  North 

Atlantic Treaty Organisation in the field of crisis prevention and management.  

1.2  The draft law defines ‘crisis’  very broadly as ‘any situation  threatening the national security  and 

caused by a national or international event or process, the prevention of potential, or elimination of 

actual  effects  of  which  necessitates  recourse  to  crisis  management  measures’.  It  therefore  covers 

situations which go beyond the competence of a single national institution and require coordinated 

action. According to the draft law, it is for the  Lithuanian  government to announce and revoke a 

state of crisis, and to decide which crisis management measures should be applied. 

1.3  The  draft  law  also  designates  Lietuvos  bankas  as  one  of  the  institutions  responsible,  ‘within  its 

remit’, for the prevention and management of crises.  

1  

Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

 
 
 
 
 
                                                      
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2. 

General observations 

2.1  Under the Treaty, exclusive competence for monetary policy is conferred on the Union for Member 
States whose currency is the euro2 and such Member States may not adopt unilateral measures in 

this  field.  Therefore,  in  adopting  the  euro  a  Member  State  irreversibly  transfers  to  the  Union 

monetary  policy  and  other  powers  enumerated  in  the  Treaty  and  the  Statute  of  the  European 

System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’) 

with  regard  to  ESCB  tasks.  In  these  fields  (i.e.  setting  reference  rates,  injecting  or  withdrawing 

liquidity  in  the  market,  ensuring  efficient  and  sound  clearing  and  payment  systems,  managing 

foreign  reserves,  issuing  banknotes,  contributing  to  the  stability  of  the  financial  system),  certain 

policy-making and legislative powers belong exclusively, under Articles 8 and 12 of the Statute of 
the ESCB, to the decision-making bodies of the ECB3. 

2.2  Article  347  of  the  Treaty,  however,  envisages  that  a  Member  State  may  be  called  upon  to  take 

action in the event of serious internal disturbances affecting the maintenance of law and order, war, 

serious international tension constituting a threat of war, or in order to carry out obligations it has 

accepted for the purpose of maintaining peace and international security. Accordingly, in the event 

of emergency conditions under Article 347, national authorities may be justified in exercising, on a 
temporary basis, powers that fall within the exclusive competence of the ESCB4. 

2.3  Since  Lithuania  is  a  Member  State  with  a  derogation  pursuant  to  Article  139  of  the  Treaty,  the 

above requirements will apply once Lithuania adopts the euro and Lietuvos bankas becomes a fully 

integrated member of the Eurosystem. 

3. 

Specific observations 

3.1  Article 10 of the draft law defines the duties of Lietuvos bankas in crisis situations, providing that, 

‘within its remit’, Lietuvos bankas is to: (1) carry out analysis of risk factors in the financial sector 

as  well  as  analysis  of  information  on  the  potential  or  actual  crisis;  (2)  submit  proposals  to  the 

government on measures for crisis prevention and crisis management in the financial sector as well 

as on the announcement or revocation of a state of crisis in the financial sector; (3) apply measures 

for  crisis  prevention  and  crisis  management  in  accordance  with  laws  and  other  legal  acts;  and 

(4) perform other functions related to crisis prevention and crisis management in accordance with 

the draft law and other legal acts. 

The ECB understands the expression that Lietuvos bankas is acting ‘within its remit’ to imply that 

Lietuvos bankas will act within its competence under the Law on Lietuvos bankas, as well as under 

the Treaty and the Statute of the ESCB, and recommends clarifying the draft law accordingly. 

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4  

See Article 3(1)(c) of the Treaty.  
See Opinion CON/2006/6, paragraph 8 and Opinion CON/2002/27, paragraph 9. All ECB opinions are published on the 
ECB’s website at www.ecb.europa.eu. 
See Opinion CON/2006/6, paragraph 14.  

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3.2  The  ECB  further  understands  that  the  list  of  tasks  to  be  performed  by  Lietuvos  bankas  in  crisis 

situations is not exhaustive and that Lietuvos bankas may be required to apply other measures and 

perform other functions, within its competence, which are laid down in other relevant legislation. 

Moreover,  whilst  Article  14  of  the  draft  law  lists  potential  crisis  management  measures  without 

specifying any measure to be taken by Lietuvos bankas, it includes ‘any other measures necessary 

for  the  prevention  of  potential  effects  of  the  crisis  or  elimination  of  the  effects  thereof’.  It  is 

therefore not clear whether Article 14 of the draft law assigns any tasks to Lietuvos bankas, and the 

ECB recommends clarifying the draft law in this regard.  

3.3  When implementing crisis prevention and management measures and performing functions under 

the draft law, any involvement of Lietuvos bankas should be fully compatible with its institutional 

and financial independence to safeguard the proper performance of  its tasks under the Treaty and 

the  Statute  of  the  ESCB.  The  principle  of  central  bank  independence  requires,  inter  alia,  that 

Member  States  do  not  put their  national  central  banks  in  a  position  where  they  have  insufficient 

financial  resources  and  inadequate  net  equity  to  carry  out  their  tasks  related  to  the  ESCB  or  the 
Eurosystem5. 

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

Done at Frankfurt am Main, 2 April 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI 

5  

See Opinion CON/2012/63, paragraph 6.1. 

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