Opinion of the European Central Bank of 22 November 2021 on the designation of the Central Bank of Cyprus as an Emergency Civil Planning Agency (CON/2021/35)
Date: 2021-11-22
Institutions: European Central Bank
Subjects: legal basis

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 22 November 2021  

on the designation of the Central Bank of Cyprus as an Emergency Civil Planning Agency 

(CON/2021/35) 

Introduction and legal basis 

On 30 September 2021 the European Central Bank (ECB) received a request from the Minister for Defence 

of the Republic of Cyprus for an opinion on a draft decree on the designation of the Central Bank of Cyprus 

(CBC) as an Emergency Civil Planning Agency (ECPA) of 20211 (hereinafter the ‘draft decree’).  

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/EC 2, as 

the draft decree relates to the CBC. 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 decree 

1.1 

The draft decree designates the CBC as an Emergency Civil Planning Agency (ECPA) and calls on 

the Governor of the CBC to draw up, in consultation with the Minister for Defence or the Central 

Emergency Civil Planning Authority (CECPA), a detailed emergency plan in accordance with the 

principles to be included in the general emergency civil planning strategy. 

1.2 

The explanatory memorandum submitted by the Ministry of Defence states that the main purpose 

of  the  draft  decree  is  to  enable  the  CBC  to  develop  the  necessary  mechanisms  for  the  smooth 

continuation of its operational functions if the Republic of Cyprus declares a state of emergency, 

thus enabling the Republic both to continue carrying out, through the CBC, its domestic and foreign 

payments, and to maintain or increase its defence capabilities. In addition, in order for the CBC to 

effectively comply with its legal obligations, it will have to examine the procedures regarding the 

carrying out of critical transactions 3 or payments, as well as the safeguarding of its own assets and 

subsequently the assets of the Republic of Cyprus. 

1.3 

The draft decree is to be read together with the relevant legislation currently in force, comprising 

the  Law  on  Emergency  Civil  Planning  of  20004  (hereinafter  the  ‘Law’)  and  the  Regulations  on 

1  

2  

3  
4  

Το  περί  της  Κεντρικής  Τράπεζας  της  Κύπρου,  ως  Υπηρεσίας  Πολιτικής  Σχεδίασης  Εκτάκτων  Αναγκών  (ΥΠΣΕΑ) 
Διάταγμα του 2021. 

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). 
These are not specified in the explanatory memorandum or draft decree. 
Ο περί Πολιτικής Σχεδίασης Έκτακτων Αναγκών Νόμος του 2000 (Ν. 44(I)/2000). 

 
 
 
 
 
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Emergency Civil Planning (General) of 2011 5 (hereinafter the ‘Regulations’).  

1.4 

According to the Law, the Council of Ministers must take all measures it deems appropriate from 

time to time for the purpose of strengthening the defence capacity of the Republic of Cyprus in the 

face of any hostile actions against it. The Council of Ministers is also granted the power to proclaim, 

by  issuing  a  decree,  any  ministry  or  independent  service  of  the  Republic,  or  any  department  or 

agency thereof, and any public or private law body, or any department or agency thereof, as an 

ECPA, and to call on the relevant minister, director, supervisor or manager, as the case may be, in 

consultation with the Minister for Defence or the CECPA, to draw up a detailed emergency plan and 

to undertake the organisation, self-protection and training of the staff of that ECPA in order to be 

able to apply the plan in a state of emergency. The Law further provides that, notwithstanding the 

provisions of any other law or regulation or employment contract relating to the terms of service of 

employees,  the  staff  members  of  any  ECPA  and  their  employers,  supervisors  or  directors  must 

comply with the provisions of the decree issued by the Minister for Defence. 

1.5 

The Law defines ‘state of emergency’ as a state declared by the Council of Ministers in the event 

of war or the threat  of war in line with Article 183(1)  the  Constitution of the Republic of Cyprus. 

According to the latter, in the event of war or any other public danger threatening the existence of 

the Republic or any part thereof, the Council of Ministers has the power, by a decision taken in this 

respect, to declare a state of emergency, subject to the right of veto against any such decision that 

may be exercised, jointly or severally, by the President and the Vice-President of the Republic within 

forty-eight hours of the date of that decision.  

1.6 

In addition, the Law provides that the Minister for Defence must prepare and submit to the Council 

of Ministers for approval a general plan for emergency planning, the purpose of which is to define 

the basic principles on the basis of which the detailed emergency plans of the ECPAs are drawn 

up regarding: (a) their organisation and training in peacetime; and (b) their action and self-protection 

in a period in which there is a valid state of emergency. 

1.7 

Any violation or non-compliance with any provision of a regulation, decree or directive issued under 

the  Law  is  an  offence  punishable  by  imprisonment  of  not  more  than  six  months  or  a  fine  not 

exceeding five hundred pounds or both. 

1.8 

The  Regulations  set  out  the  details  regarding  the  establishment,  operation  and  staffing  of  the 

ECPAs and are applicable to all ECPAs and their personnel. The Regulations grant the Minister for 

Defence, by way of issuing instructions, the power to exercise general oversight and control over 

the ECPAs and the duty of coordinating and providing the ECPAs with guidance when regulating 

any matters that need clarification regarding the implementation of the Law and Regulations and 

the  relevant  decisions  of  the  Council  of  Ministers.  The  Minister  for  Defence  may  also  monitor 

whether  the  ECPAs:  (a)  have  taken  all  necessary  measures  for  their  organisation,  staffing, 

preparation and readiness, as well as the training of their staff, for the purpose of carrying out their 

mission;  (b)  have  created  and  operate  suitable  and  equipped  infrastructures;  (c)  coordinate  and 

cooperate with the CECPA; and (d) are supplied with, store and maintain the necessary materials, 

supplies and other means required to implement their emergency plans. 

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Οι περί Πολιτικής Σχεδίασης Έκτακτων Αναγκών (Γενικοί) Κανονισμοί του 2011. 

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1.9 

Moreover, each ECPA must: (a) comply with the instructions issued by the Minister for Defence; (b) 

prepare an emergency plan in consultation with the CECPA, within six months of its designation as 

an ECPA; (c) take any measure it deems expedient or necessary to implement the provisions of 

the Law and Regulations, the relevant instructions of the Minister for Defence and its emergency 

plan. This  includes  measures on: (i)  its organisation,  staffing,  preparation  and readiness; (ii) the 

training  of  its  staff;  and  (iii)  securing  the  means,  supplies,  materials  or  resources  necessary  to 

accomplish  its  mission;  (d)  participate,  when  requested,  in  emergency  planning  exercises  as 

designated by the Minister for Defence; and (e) notify the CECPA of any change in the official status 

of any member of its staff in its employment, as well as of any change in the means and material 

resources  at  its  disposal,  provided  that  the  implementation  of  its  emergency  plan  is  directly  or 

indirectly affected, and immediately take appropriate measures, including modifying or revising that 

plan, in cooperation with the CECPA. 

1.10  The Regulations further provide that each ECPA must establish a dedicated department which will 

be responsible for coordinating the work and fulfilling the assignments of the ECPA in a state of 

emergency. The head of the department is given a number of responsibilities, including submitting 

to the manager of the ECPA any measures deemed necessary to better implement, inter alia, the 

Law,  the  Regulations,  the  general  civil  emergency  and  the  specific  emergency  plans  and  the 

maintenance of a registry listing the personnel of the ECPA and any other relevant information.  

1.11  The  ECPA’s  personnel  comprises  staff  members  of  the  ECPA,  as  well  as  any  other  individuals 

called into service or for training by the Minister for the Interior, such as National Guard reservists 

or individuals with a reserve duty to the Civil Defence, or others deemed suitable on the basis of 

their specialised education, skills or experience. The ECPA’s personnel is obliged, inter alia: (a) to 

comply with the provisions of the Law, the Regulations and the instructions issued thereunder, as 

well as their obligations stemming from the applicable emergency plan; (b) to maintain professional 

secrecy;  (c)  to  notify  the  dedicated  department  of  any  temporary  or  permanent  change  to  their 

residence; and (d) to carry with them any device or equipment given to them for the exercise of their 

duties  and  not  to  give  access  to  them  to  any  other  person.  In  the  event  of  a  declaration  by  the 

Cypriot government of a state of emergency, the ECPA’s personnel may be called into service by 

the  Minister  for  the  Interior,  following  the  approval  of  the  Council  of  Ministers.  The  regular 

employment of any person called into service or for training is suspended for the duration of the 

service or training. 

1.12 

In addition, the dependents of any member of the ECPA’s personnel who dies during training or 

service,  and  any  member  of  ECPA’s  personnel  who  becomes  incapable  of  performing  their 

employment due to an injury or illness caused while performing their service or training, are entitled 

to  compensation.  The  members  of  the  ECPA’s  personnel  are  also  not  to  be  held  liable  for  any 

damage caused by any action or omission during the exercise of their duties, provided that such 

damage was reasonably necessary for the exercise of their duties, except in the event of negligence 

or fault on their part. 

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2. 

General observations  

2.1 

As previously noted by the ECB 6, under the Treaty the Union has exclusive competence in the area 

of  monetary  policy  for  Member  States  whose  currency  is  the  euro 7.  Therefore,  a  Member  State 

whose currency is the euro transfers to the Union its powers in the area of monetary policy and the 

tasks of the European System of Central Banks (ESCB) 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’). In these fields, Member States whose currency is the euro may not adopt 

unilateral measures as it is for the decision-making bodies of the ECB alone to take the measures 

necessary to ensure the performance of the tasks entrusted to the ESCB under the Treaty and the 

Statute of the ESCB 8, including contingency planning with respect to the continued performance of 

these tasks. Furthermore, when exercising their powers and carrying out their ESCB tasks, the ECB 

and the national central banks (NCBs) act independently, which means that they may not seek or 

take  instructions  from  any  government  of  a  Member  State  when  performing  their  tasks.  The 

governments  of  the Member States have undertaken to respect this principle9.  Moreover, under 

Article 127(6) of the Treaty and Council Regulation (EU) No 1024/201310 specific tasks concerning 

the  prudential  supervision  of  credit  institutions  have  also  been  conferred  upon  the  ECB.  As 

previously noted by the ECB, pursuant to the principle of sincere cooperation under Article 4(3) of 

the Treaty on European Union, the Member States are obliged to assist the ECB in carrying out 

tasks which flow from the Treaties. This implies that Member States should refrain from taking any 

measures which could jeopardise the ECB’s or the ESCB’s objectives 11. 

2.2 

Article 347 of the Treaty 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, in the event of 

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.  However,  any 

reliance on Article 347 of the Treaty must take place strictly in the exceptional cases laid down in 

the  Treaty  itself,  as  interpreted  by  the  Court  of  Justice  of  the  European  Union  (CJEU)12,  in  a 

restrictive manner,  and  it can therefore  be understood only as a ‘hedging clause’ and not as an 

expression of any residual Member State competence13. Moreover, the CJEU has held that, when 

acting due to urgency in areas of exclusive Union competence, Member States may act only as 

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8  
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10  

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12 

13  

See  paragraph  9  of  Opinion  CON/2002/27,  paragraph  8  of  Opinion  CON/2006/6,  paragraph  2.1  of 
Opinion CON/2014/24 and paragraph 2.1 of Opinion CON/2020/2, each available on www.eur-lex.europa.eu.  
See Article 3(1)(c) of the Treaty. 

See Article 282(2) and (4) of the Treaty and Articles 8 and 12 of the Statute of the ESCB.  
See Article 130 of the Treaty and Article 7 of the Statute of the ESCB. 
Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63). 
See paragraph 2.1 of Opinions CON/2018/46 and CON/2020/2, and paragraph 10.2.2 of Opinion CON/2020/13. 

See judgment of the Court of Justice of 19 December 1968, Salgoil, 13/68, ECLI:EU:C:1968:54; judgment of the Court 
of  Justice  of  5  May  1981,  Commission  v  UK,  804/79,  ECLI:EU:C:1981:93;  paragraph  13  of  Opinion  CON/2006/6; 
paragraph 2.3 of Opinion CON/2020/2; Gilsdorfer and Brandtner, ‘Vorbem. zu den Artikeln 296 bis 298 EG’, Nos. 3 to 
5, in Bardenhewer-Rating, Grill, Jakob and Woelker (eds.), EG- und EU-Kommentar, 6th ed. (2004), p. 1534; Zilioli, 
C., ‘National Emergency Powers and Exclusive Community Competences – A Crack in the Dam?’ Legal Aspects of 
the European System of Central Banks, ECB, 2005, pp. 115 to 133, at pp. 131 to 132. 

Judgment of the Court of Justice of 19 December 1968, Salgoil, 13/68, ECLI:EU:C:1968:54; Gilsdorfer and Brandtner, 
‘Vorbem. zu den Artikeln 296 bis 298 EG’, Nos. 3 to 5, in Bardenhewer-Rating, Grill, Jakob and Woelker (eds.), EG- 
und  EU-Kommentar,  6th  ed.  (2004),  p.  1534;  paragraph  13  of  Opinion  CON/2006/6;  paragraph  2.3  of  Opinion 
CON/2020/2. 

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‘trustees of the common interest’ and may not bring into force any interim measures except as part 

of  a  process  of  collaboration  with  the  Union14.  Accordingly,  only  where  the  conditions  under 

Article 347 of the Treaty are met, may national authorities be justified in exercising, on a temporary 

and exceptional basis, powers that fall within the exclusive competence of the ESCB15. Due to the 

exceptional  nature  of  Article  347  of  the  Treaty,  Member  States  should  refrain  from  adopting 

preventive legislation in the absence of the conditions prescribed by Article 347 of the Treaty 16. If 

the national legislature wishes to rely on this provision, it is for the Member State to ensure that the 

conditions for applying Article 347 of the Treaty are specifically fulfilled at the time of adopting the 

measure that conflicts with that Member State’s Treaty obligations. 

2.3 

The  ECB  understands  that  the  Law  and  the  Regulations  take  a  holistic  approach  to  national 

defence,  whereby  national  defence  includes  not  only  the  actions  of  specific  defence  authorities, 

such  as  the  Council  of  Ministers,  the  Minister  for  Defence,  the  CECPA  and  other  specifically 

designated authorities, but also includes within national defence the actions of other public bodies 

and private persons within their respective fields of competence. As part of such a national defence 

policy the functions fulfilled by public bodies in usual circumstances, including the central banking 

function, support the resolution of national defence situations. The ECB notes that this approach 

must not lead to a breach of the obligations of the Republic of Cyprus under the Treaty and the 

Statute of the ESCB highlighted above.  

2.4 

As noted in paragraph 1.8, the Minister for Defence has the power to oversee the ECPAs and issue 

instructions to the ECPAs, including the CBC, with which the ECPAs have a duty to comply. The 

rights  of  government  officials  to  give  instructions  to  NCBs,  their  decision-making  bodies  or  their 

members are incompatible with the Treaty and the  Statute  of the ESCB as far as ESCB-related 

tasks  are  concerned17.  Therefore,  while  the  ECB  understands  that  the  powers  attributed  to  the 

Minister  for  Defence  are  intended  to  ensure  compliance  with  the  applicable  legal  framework  on 

national  defence  preparedness,  it  recommends  that  it  should  be  explicitly  clarified  in  the  draft 

decree,  for  the  avoidance  of  any  doubt,  that  there  should  be  no  interference  with  the  tasks  and 

duties of the CBC as part of the ESCB 18.  

2.5 

Finally, it is understood that the exact defence tasks that the CBC will have to undertake are to be 

specified in the emergency plan to be drawn up by the CBC, in consultation with the Minister for 

Defence or the CECPA, after the issuance of the draft decree. 

14  

15 

16  

17  
18 

See  e.g.  judgment  of  the  Court  of  Justice  of  5  May  1981,  Commission  v  UK,  804/79,  ECLI:EU:C:1981:93, 
paragraph 30; paragraph 13 of Opinion CON/2006/6; paragraph 2.3 of Opinion CON/2020/2. 

See paragraph 2.2 of Opinion CON/2014/24, paragraph 2.2 of Opinion CON/2020/2 and paragraph 10.2.2 of Opinion 
CON/2020/13. 

See C. Zilioli, ‘National Emergency Powers and Exclusive Community Competences – A Crack in the Dam?’ Legal 
Aspects of the European System of Central Banks, ECB, 2005, pp. 115 to 133, at pp 131 to 132. 
See the ECB’s Convergence Report 2020, available on the ECB’s website. 

See paragraph 2.7 of Opinion CON/2020/2. 

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3. 

Specific observations – conferral of new tasks on the CBC 

3.1 

New tasks of the CBC 

3.1.1  By designating the CBC as an ECPA and by virtue of the Law and the Regulations, the draft decree 

confers  upon  the  CBC  a  number  of  tasks,  such  as  preparing  and  implementing  a  dedicated 

emergency  plan,  ensuring  that  it  is  organised,  prepared  and  has  the  necessary  means  and 

resources, and training its staff19. The proposed national defence preparedness tasks of the CBC 

would  differ  from  internal  contingency  planning  undertaken  by  ESCB  central  banks  such  as  the 

CBC. Contingency planning for the discharge of ESCB and other central banking tasks may take 

the form of an internally-driven process whereby the ESCB central banks evaluate for themselves 

which resources they would need and how they should prepare for various emergency situations, 

including situations that could be characterised as defence situations, based on their own targets 

and strategies. By contrast, the proposed national defence preparedness tasks of the CBC will be 

driven by external strategic plans and aims set by the Cypriot Government and would require the 

CBC to take into account considerations external to the CBC, most notably the overarching national 

defence framework. This could lead to the CBC acquiring resources it might not otherwise have 

considered relevant, participating in planning processes it would not otherwise have taken part in 

and/or developing processes it would not otherwise have introduced. This means, in effect, that the 

new tasks introduce, alongside any internal contingency planning process, an additional process 

driven  by  the  national  defence  framework.  As  such,  the  proposed  new  national  defence 

preparedness  tasks  would  differ  from  an  internal  contingency  planning  performed  by  the  CBC, 

including within the framework of the ESCB, and therefore involves the conferral of a new task on 

the CBC20.  

3.1.2  The  ECB  underlines  that  a  proposed  conferral  of  new  tasks  on  an  NCB  in  the  ESCB  must  be 

assessed  against  the  prohibition  on  monetary  financing  under  Article  123  of  the  Treaty.  For  the 

purposes  of  that  prohibition,  Article  1(1)(b)(ii)  of  Council  Regulation  (EC)  No 3603/9321  defines 

‘other type of credit facility’, inter alia, as ‘any financing of the public sector’s obligations vis-à-vis 

third parties’. 

3.1.3  Ensuring that Member States implement a sound budgetary policy is one of the key objectives of 

the monetary financing prohibition22. Therefore, the task of financing measures, which are normally 

the responsibility of the Member States, and which are financed from their budgetary sources rather 

than  by  the  NCBs,  must  not  be  entrusted  to  NCBs.  To  decide  what  constitutes  financing  of  the 

public sector’s obligations vis-à-vis third parties, which can be translated as the provision of central 

bank financing outside the scope of central bank tasks, it is necessary to carry out, on a case-by-

case basis, an assessment of whether the task to be undertaken by an NCB is a central bank task 

or a government task, i.e. a task that falls within the responsibilities of the Member States.  

19  
20  
21  

22  

See paragraph 3.1.1 of Opinion CON/2020/2. 
See paragraph 3.1.2 of Opinion CON/2020/2. 

Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions 
referred to in Articles 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1). 
Article  123  of  the  Treaty  also  serves  the  objective  of  maintaining  price  stability  and  reinforces  central  bank 
independence. 

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3.1.4  As part of its discretion in the exercise of its duty, on the basis of Article 271(d) of the Treaty and 

ECB-PUBLIC 

Article 35.6 of the Statute of the ESCB, to ensure that NCBs honour the obligations laid down by 

the Treaty, the Governing Council has endorsed criteria for determining what may be seen as falling 

within the scope of a public sector obligation within the meaning of Article 1(1)(b)(ii) of Regulation 

(EC) No 3603/93 or, in other words, what constitutes a government task as follows: 

First, central bank tasks are in particular those tasks that are related to the tasks that have been 

conferred upon the ECB and the NCBs by the Treaty and the Statute of the ESCB. These tasks are 

mainly defined in Articles 127(2), (5) and (6) and 128(1) of the Treaty, as well as Article 22 and 

Article 25.1 of the Statute of the ESCB. 

Second, as Article 14.4 of the Statute of the ESCB allows NCBs to perform ‘other functions’, new 

tasks, i.e. tasks that are not related to tasks that have been conferred upon the ECB and the NCBs, 

are  not  precluded  per  se.  However,  new  tasks  that  are  undertaken  by  an  NCB  and  which  are 

atypical of NCB tasks or which are clearly discharged on behalf of, and in the exclusive interest of, 

the government or other public sector entities should be considered government tasks. 

Third, an important criterion for qualifying a new task as atypical of an NCB task or as being clearly 

discharged  on  behalf  of,  and  in  the  exclusive  interest  of,  the  government  or  other  public  sector 

entities is the impact of the task on the institutional, financial and personal independence of that 

NCB. 

In particular, the following aspects should be taken into account: 

(a)  

whether the performance of the new task creates conflicts of interest with existing central 

bank  tasks  which  are  not  adequately  addressed  and  does  not  necessarily  complement 

those existing central bank tasks. If a conflict of interest arises between existing and new 

tasks, sufficient safeguards to mitigate that conflict should be in place. The complementarity 

between a new task and the existing central bank tasks should not be interpreted broadly, 

so as to lead to the creation of an indefinite chain of ancillary tasks. Such complementarity 

should be examined in relation to the financing of those tasks; 

(b) 

whether without new financial resources the performance of the new task is disproportionate 

to the NCB’s financial or organisational capacity, and may have a negative impact on the 

capacity to perform properly the existing central bank tasks; 

(c)  

whether the performance of the new task fits into the institutional set-up of the NCB in the 

light of central bank independence and accountability considerations; 

(d)  

whether the performance of the new task harbours substantial financial risks; 

(e)  

whether  the  performance  of  the  new  task  exposes  the  members  of  the  NCB  decision-

making bodies to political risks which are disproportionate and may also have an impact on 

their personal independence and, in particular, on the guarantee of term of office set out in 

Article 14.2 of the Statute of the ESCB. 

3.1.5  Based  on  the  criteria  set  out  above,  the  following  paragraphs  assess  whether  the  new  national 

defence preparedness tasks of the CBC are in line with the prohibition on monetary financing. 

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3.2 

Tasks related to the tasks conferred upon the ECB and the NCBs by the Treaty and the Statute of 

the ESCB 

3.2.1  The  purpose  of  the  Law  and,  by  consequence,  of  the  Regulations  and  the  draft  decree  is  to 

strengthen the defence capacity of the Republic of Cyprus in the face of any hostile actions against 

it. The functions of the NCBs under the Treaty and the Statute of the ESCB do not encompass this 

aim. The new tasks conferred on the CBC are not therefore related to the tasks that have been 

conferred upon the ECB and the NCBs by the Treaty and the Statute of the ESCB.  

3.3 

Tasks which are atypical of NCB tasks 

3.3.1  While the majority of NCBs of the ESCB do not appear to have been assigned national defence 

preparedness  tasks,  NCBs  in  several  Member  States  have  been  assigned  national  defence 

preparedness tasks which are similar to the new task assigned to the CBC23. Based on this the 

23  

In 10 Member States (Bulgaria, the Czech Republic, Finland, Greece, Hungary, Latvia, Lithuania, Poland, Slovakia 
and  Slovenia)  NCBs  have  been  assigned  some  type  of  national  defence  preparedness  obligations.  In  Bulgaria, 
pursuant to Article 42 of the Law on defence and armed forces of the Republic of Bulgaria, Българска народна банка 
(BNB, Bulgarian National Bank) must: (i) develop rules and norms for providing for the activity of the banking system 
during war time; (ii) in coordination with the Minister for Defence develop a plan enabling BNB to work in wartime; and 
(iii) manage  the  planning  process  to  enable  the  banking  system  to  work  during  wartime.  In  the  Czech  Republic 
preparedness for crisis situations is set out in Article 13 of the Law on crisis (No. 240/2000 Coll.) and in Article 23 of 
the Law on economic measures for crisis situations (No. 241/2000 Coll.), and includes, inter alia, an obligation of the 
central bank to cooperate with the government, to adopt a proper crisis plan and to establish and operate a crisis crew. 
In  Finland,  the  Law  on  emergency  powers  (2011/1552)  applies  to  public  organs  and  institutions  such  as  Suomen 
Pankki,  but  only  in  emergency  situations,  and  confers  specific  tasks  on  them.  Emergency  situations  are  explicitly 
defined  in  the  Law  on  emergency  powers.  The  Law  on  emergency  powers  also  sets  out  a  general  preparedness 
obligation.  In  Greece,  an  Emergency  Planning  Office  was  established  in  the  Bank  of  Greece  in  1975,  by 
Decision No 670/5/222984/24.9.1975 of the Minister for National Defence that was issued on the basis of Article 12 of 
Legislative Decree 17/1974 on emergency planning. The Emergency Planning Office deals with emergency planning 
policy issues including the design of emergency planning to the extent this is associated with the Bank of Greece’s 
competences, the measures to be taken during peacetime with a view to implementing emergency planning policy, 
and the monitoring of preparedness as regards the execution of emergency planning policy. In Hungary, according to 
Article 18(3) of Law CXIII of 2011 on national defence and the Hungarian armed forces and the measures adoptable 
under a special  legal  order  (Law  on  national defence),  Magyar  Nemzeti  Bank  will participate  in  the preparation  for 
national defence in the performance of its tasks, in its area of operations, but will be exempted from the requirement 
of economic and material service obligations. In Latvia, the functions of Latvijas Banka also apply in national defence 
situations and thus Latvijas Banka plans the preparedness for such situations, inter alia, within contingency planning. 
Latvijas Banka also participates in national defence planning at national level. In Lithuania, according to the Law on 
mobilisation  and  adoptive  country  support,  Lietuvos  bankas  is  a  civil  mobilisation  institution.  Paragraph  3.5  of  the 
Government resolution on the State mobilisation tasks for State municipal institutions and Authorities of the Republic 
of Lithuania determines the mobilisation tasks for Lietuvos bankas as follows: to ensure: (i) the supervision of activities 
of essential financial market participants supervised by Lietuvos bankas; (ii) the management and usage of the foreign 
financial assets of Lietuvos bankas; (iii) the delivery of cash for subjects of the mobilisation system who perform vital 
State functions; (iv) the performance of credit operations of Lietuvos bankas as well as the effective operation of the 
necessary  information  systems  and  databases;  (v)  the  functioning  of  the  necessary  payment  systems  of  Lietuvos 
bankas; (vi) international relations related to financial support for the Republic of Lithuania, as well as representation 
of the Republic of Lithuania in international institutions. In Poland, under point 2 of Article 11(5) of the Law on Narodowy 
Bank Polski, the President of Narodowy Bank Polski (NBP) must perform tasks resulting from the universal duty to 
defend  the  Republic  of  Poland.  Also,  on  the  basis  of  Articles  18(3)  and  22(1)  of  the  Law  on  the  general  defence 
obligation and point 2 of Article 11(5) of the Law on Narodowy Bank Polski (and in some cases on the basis of Council 
of Ministers’ regulations), the President of NBP has issued various defence related ordinances. In Slovakia, according 
to Article 23 of Law No 179/2011 Coll. on economic mobilisation, as amended, Národná banka Slovenska (NBS) will 
prepare  and  carry  out  measures  in  times  of  crisis  in  the  foreign  exchange  field,  including  the  protection  of  foreign 
reserve assets. NBS will also: (i) provide the cash banking services necessary for the activities of the armed forces of 
the  Slovak  Republic,  armed  security  corps,  the  Slovak  Intelligence  Service  and  the  Military  Police,  upon  written 
agreement concluded with the Ministry of Finance and the State Treasury; (ii) control, within its field of competence, 
the  performance  of  the  measures  of  economic  mobilisation;  (iii) process  and  update  information  necessary  for  the 
performance of the measures of economic mobilisation within the specific application program of the unified information 
software; (iv) process the emergency plan of economic mobilisation according to instructions provided by the Ministry 
of  Economy  and  determine  access  rights  for  other  users  within  the  specific  application  programme  of  the  unified 
information  software.  In  Slovenia,  Banka  Slovenije  is  engaged  in  national  defence  planning  during  peacetime. 
According to the Law on defence, the government, which adopts the country’s defence plan, prescribes in detail the 
process of drawing up and the content of defence plans and the planning of production and services during wartime. 

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proposed national defence preparedness task of the CBC could be considered to be a task which 

is not atypical of NCB tasks. In several Member States the related costs for the NCBs are required 

to be reimbursed by the central government 24. 

3.4 

Tasks clearly discharged on behalf of and in the exclusive interest of the government 

3.4.1  As noted above, the purpose of the Law and, by consequence, of the Regulations and the draft 

decree is to strengthen the defence capacity of the Republic of Cyprus in the face of any hostile 

actions  against  it.  The  CBC’s  proposed  national  defence  preparedness  task  would  therefore  be 

clearly discharged on behalf of and in the exclusive interest of the Cypriot government 25.  

3.5 

Extent to which performance of the new tasks create conflicts of interest with existing central bank 

tasks 

3.5.1  The performance of the national defence preparedness task would be unlikely to give rise to any 

conflicts of interest with the CBC’s existing central bank tasks. However, it should be ensured that 

the  assignment  of  national  defence  tasks  to  the  CBC  does  not  conflict  with  Union  law  (see 

paragraph 2.1)26.  

3.6 

Extent  to  which  performance  of  the  new  tasks  are  disproportionate  to  the  CBC’s  financial  or 

organisational capacity  

3.6.1  As previously noted  by the ECB27, the principle of financial  independence requires that Member 

States may not put their NCBs in a position where they have insufficient resources to carry out both 

their  ESCB-related tasks and their national tasks, from an operational  and  financial perspective. 

Furthermore,  when  allocating  specific  new  tasks  to  NCBs,  each  NCB  concerned  should  have 

sufficient financial and human resources at its disposal to ensure that the tasks can be carried out 

without impacting on the NCB’s financial or operational capacity to perform its ESCB tasks. In order 

to ensure that the CBC’s capacity to perform its ESCB-related tasks is not impaired, the CBC must, 

therefore, be in a position to avail itself of the necessary resources to carry out its duties under the 

draft decree, together with the Law and the Regulations. At this stage, it is not possible for the ECB 

to assess what additional resources the CBC will require in order to perform its new tasks under 

the draft decree, together with the Law and the Regulations. Nevertheless, it is noted that the draft 

decree does not provide for the CBC being reimbursed for the costs of carrying out these new tasks 

as  is  the  case  in  at  least  three  Member  States  where  reimbursement  mechanisms  for  the 

performance  of  similar  tasks  have  been  included  in  the  relevant  national  legislation  (see 

paragraph 3.3.1). Although the ECB is not aware of whether the potential financial burden on the 

This is done by the Decree on defence planning, which defines the scope and content of the defence plan, and the 
responsibility for defence planning (the scope of tasks related to the functioning of the defence system in emergency 
situations, war or crises). 

In Bulgaria, Article 13 of the Law on defence and armed forces of the Republic of Bulgaria provides that the financial 
provision for defence activities must be borne by the State budget and other sources, provided for in a law or act of 
the Council of Ministers. In Lithuania, Article 31 of the Law on mobilisation and adoptive country support provides that 
the  Ministry of  Defence,  the  Mobilisation  Department,  the  Lithuanian  Army  and civil  mobilisation  institutions will be 
financed  from  the  State budget for  the  implementation of  the  mobilisation  system  tasks established by  the Law.  In 
Slovakia, according to Article 1(2) of the Decree of the Ministry of Economy of the Slovak Republic No 552/2011 Coll. 
all expenses incurred by NBS as a result of economic mobilisation will be reimbursed to the NBS from the State budget. 
See paragraph 3.4.1 of Opinion CON/2020/2. 
See paragraph 3.5.1 of Opinion CON/2020/2. 

See, for example, paragraph 4.6.1 of Opinion CON/2018/21. 

24  

25  
26  
27  

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CBC will be significant, the ECB invites the consulting authority to consider the impact of the draft 

decree, together with the Law and the Regulations, on the resources of the CBC, and include a 

reimbursement  mechanism  in  the  relevant  legislation  in  order  to  avoid  any  potential  breach  of 

Article 123 of the Treaty 28. 

3.7 

Extent to which performance of the new task fits into the institutional set-up of the CBC, in the light 

of central bank independence and accountability considerations 

3.7.1  The potential impact of the new tasks on the institutional, financial and personal independence of 

the CBC must also be taken into consideration. In particular, consideration is given to the power 

granted to the Minister for Defence to exercise general oversight and control over the fulfilment of 

the new tasks and to give the CBC instructions in this regard. While it is understood that this power 

is aimed at compliance with the national defence preparedness framework, it should be ensured 

that,  as  far  as  the  fulfilment  of  ESCB-related  tasks  is  concerned,  this  power  is  exercised  in 

accordance with Union law (see paragraph 2.2). 

3.8 

Extent to which the performance of tasks harbours substantial financial risks 

3.8.1  The Regulations provide that the members of an ECPA’s personnel are not to be held liable for any 

damage caused by any action or omission during the exercise of their duties, provided that such 

damage was reasonably necessary for the exercise of their duties, except in the event of negligence 

or fault. Furthermore, this task would seem to primarily require planning and coordination within the 

CBC  and  with  the  competent  national  authorities.  Hence,  the  ECB  is  not  aware  of  significant 

financial  liabilities  for  the  CBC  arising  out  of  this  task.  At  the  same  time,  the  ECB  invites  the 

consulting authority to consider introducing a provision on the liability of the CBC in relation to the 

tasks it undertakes in carrying out its role as an ECPA to bring it in line with other existing laws 

which attribute tasks to the CBC29. 

3.9 

Extent to which the performance of the new tasks expose members of the decision-making bodies 

of the CBC to disproportionate political risks and impact on their personal independence 

3.9.1  The ECB does not consider that the new tasks would either expose the members of the decision-

making  bodies  of  the  CBC  to  disproportionate  political  risks  or  impact  on  their  personal 

independence.  Moreover,  national  defence  preparations  and  planning  are  primarily  the  tasks  of 

other authorities and the additional involvement of the CBC in national defence preparations is not 

likely to be substantial. In such circumstances any impact on the members of the CBC’s decision-

making bodies should be limited30.  

3.10  Conclusion regarding the conferral of new tasks on the CBC 

3.10.1  Although the new tasks, including the national defence preparedness task of the CBC, could be 

considered to be tasks which are not atypical of NCBs’ tasks in the ESCB, these tasks would be 

clearly discharged on behalf of and in the exclusive interest of the Cypriot government, in order to 

ultimately  strengthen  the  defence  capacity  of  the  Republic  of  Cyprus  in  the  face  of  any  hostile 

28  
29  

30  

See paragraph 3.6.1 of Opinion CON/2020/2. 

See Article 32 of the Law on the business of credit institutions of 1997 (66(I)/1997), Article 47A 6(3) of the Law on the 
Central Bank of Cyprus of 2002 (138(I)/2002), and Article 52 of the Law on credit agreements for consumers relating 
to immovable property intended for residential use of 2017 (41(I)/2017). 

See paragraph 3.9.1 of Opinion CON/2020/2. 

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actions against it. Given that these tasks go beyond the internal contingency planning tasks of a 

central  bank,  they  are  government,  rather  than  central  banking  tasks.  Therefore,  similar  to  the 

arrangements existing in a number of Member States which have conferred comparable tasks on 

their NCBs, a mechanism for reimbursing the CBC for any costs incurred in the performance of this 

government task should be introduced in the relevant legislation.  

This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 22 November 2021. 

[signed] 

The President of the ECB 

Christine LAGARDE 

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