Opinion of the European Central Bank of 3 November 2022 on the Slovenian scheme for the conversion into euro of hryvnia banknotes held by displaced persons from Ukraine (CON/2022/39)
Date: 2022-11-03
Institutions: European Central Bank
Subjects: legal basis

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 3 November 2022  

on the Slovenian scheme for the conversion into euro of hryvnia banknotes held by displaced 

persons from Ukraine 

(CON/2022/39) 

Introduction and legal basis 

On 16 September 2022 the European Central Bank (ECB) received a request from the National Assembly 

of the Republic of Slovenia for an opinion on a draft law on intervention measures for the comprehensive 

regulation of the situation of displaced persons from Ukraine and for assistance to the Slovenian economy 

due to the consequences of the current crisis in Ukraine (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  (TFEU)  and  the  third  indent  of  Article 2(1)  of  Council  Decision 

98/415/EC1, as the draft law relates to Banka Slovenije. 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 aim of the draft law is to mitigate the consequences of the humanitarian crisis resulting from the 

military invasion of Ukraine and the associated mass influx into Slovenia of displaced persons from Ukraine. 

The draft law amends various national laws concerning the temporary protection of displaced persons and 

introduces  additional  rights  and  protections 

for  displaced  persons 

in  the  fields  of  education, 

accommodation, health and social security. The draft law also aims to mitigate the consequences of the 
crisis in Ukraine for the Slovenian economy, in particular by facilitating the provision of convenient loans to 

local companies via the competent public fund. 

1.2 

In  consideration  of  Council  Recommendation  2022/C  166/01 2,  the  draft  law  provides  for  the 

establishment of a national scheme enabling displaced persons from Ukraine who are entitled to temporary 

protection (hereinafter ‘displaced persons from Ukraine’) to convert their (Ukrainian) hryvnia banknotes into 

euro. Under the draft law, Banka Slovenije is required to set up and implement such a scheme3. For that 

purpose,  Banka  Slovenije  is  to  purchase  hryvnia  banknotes  either  directly  from  displaced  persons  from 

Ukraine, or from the individual local banks and branches of banks (hereinafter the ‘banks’) that agree to 

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3  

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). 
Council Recommendation 2022/C 166/01 of 19 April 2022 on the conversion of hryvnia banknotes into the currency of 
the host Member States for the benefit of displaced persons from Ukraine (OJ C 166, 20.4.2022, p. 1). 
See Article 57 of the draft law. 

 
 
 
 
 
 
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exchange  hryvnia  banknotes  for  such  displaced  persons.  In  the  latter  case,  Banka  Slovenije  and  those 

banks  are  to  enter  into  an  agreement  whereby  the  banks  undertake  to  conduct  the  currency  exchange 

transactions with the displaced persons from Ukraine and Banka Slovenije undertakes to buy the hryvnia 

banknotes from the banks. The agreement is to provide that: (a) the banks may exchange banknotes up to 

the limit of 10 000 hryvnia per displaced person; (b) the rate to be used in currency exchange transactions 

is to be the official exchange rate published by the National Bank of Ukraine, or the exchange rate agreed 

between Banka Slovenije and the National Bank of Ukraine; (c) the currency exchange transactions are to 

be free of commission and other charges; (d) the identity of displaced persons from Ukraine is to be verified 

in the manner agreed between the parties, in order to ensure compliance with the exchange limit of 10 000 

hryvnia  per  displaced  person;  and  (e)  the  currency  exchange  transactions  of  hryvnia  for  euro  are  to  be 

carried out during the period of three months following the conclusion of the agreement between Banka 

Slovenije and the banks. The Slovenian government may extend this period for a further three months. 

1.3  Under the draft law,  Banka Slovenije is also to conclude an agreement with the  National Bank of 

Ukraine, or another central bank, for the purchase by the National Bank of Ukraine or such other central 

bank from Banka Slovenije, of the hryvnia banknotes obtained in the course of the implementation of the 

national scheme for their conversion into euro4.  

2. 

General observations  

2.1  The establishment and implementation of a national scheme to facilitate the conversion into euro of 

hryvnia  banknotes  by  displaced  persons  from  Ukraine  entitled  to  temporary  protection  or  adequate 

protection under national law, such as the scheme provided for in the draft law, does not constitute a task 

incumbent on the European System of Central Banks. The provisions of the draft law regarding the national 

scheme enabling displaced persons from Ukraine in Slovenia to convert their Ukrainian banknotes into euro 

implement  the  protection  measure  laid  down  in  Council  Recommendation  2022/C  166/01  which  was 

adopted on the basis of Article 78(2)(c) TFEU and the competences of the Union in the field of asylum, with 

a view to offering appropriate protection to war refugees.  

2.2  Where  the  legislature  of  a  Member  State  chooses  to  assign  the  implementation  of  the  protection 

measure  laid  down  in  Council  Recommendation  2022/C  166/01  to  its  national  central  bank  (NCB)  in 

accordance with Article 14.4 of the Statute of the European System of Central Banks and of the European 

Central Bank, that function is performed on the responsibility and liability of that NCB. Nevertheless, when 

defining the responsibility and liability of NCBs in relation to the implementation of such a measure, Member 

States are required to comply with their obligations that derive from Union  law and, in particular,  Article 

123(1) TFEU5.   

3. 

Prohibition of monetary financing 

3.1  Article 123(1) TFEU prohibits the NCBs from granting overdraft facilities or any other type of credit 

facility  to  public  authorities  and  bodies  of  the  Member  States.  Article  1(1)(b)  of  Council  Regulation  No 

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5  

See Article 57 of the draft law. 
See, to that effect, Judgment of the Court of Justice of 13 September 2022, Banka Slovenije, C-45/21, EU:C:2022:670, 
paragraph 57. 

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3603/93 6 defines the term ‘other type of credit facility’ for the purposes of Article 123 TFEU as meaning, 

amongst others, any financing of the public sector’s obligations vis-à-vis third parties. Accordingly, for the 

draft law to be compatible with Article 123(1) TFEU, Banka Slovenije must not assume obligations vis-à-

vis third parties which could be incumbent on the public sector. This means not only that Banka Slovenije 

must not assume pre-existing obligations vis-à-vis third parties incumbent on other public authorities, but 

also that the effective financing of the obligations vis-à-vis third parties by Banka Slovenije must not result 

directly from the measures adopted by, or from the policy choices made by, other public authorities 7. 

3.2  Under the draft law, Banka Slovenije is to purchase, from its own funds, hryvnia banknotes either 

directly from displaced persons from Ukraine or from banks which have acquired hryvnia banknotes from 

such persons. The financial obligations attached to the purchase of hryvnia banknotes are inherent in the 

implementation of the protection measure consisting of the national scheme for the conversion of hryvnia 

banknotes into euro, with which Banka Slovenije is entrusted, and do not arise from the specific choices 

that Banka Slovenije would make in that context or the manner in which it carries out the task assigned to 

it. It follows, therefore, that the effective financing by Banka Slovenije of the obligations vis-à-vis displaced 

persons from Ukraine results directly from the protection measure and from the policy choices made by the 

Slovenian legislature. Consequently, the draft law is not compatible with Article 123(1) TFEU, as it requires 

Banka  Slovenije to assume obligations vis-à-vis third parties incumbent  on the  public sector. To ensure 

compatibility with the prohibition of monetary financing, the draft law should be amended to ensure that the 

purchase of hryvnia banknotes is financed from budgetary resources, and not from Banka Slovenije’s own 

funds. 

4. 

Practical implementation of the draft law 

4.1 

In addition to the above observations, the ECB understands that in the current circumstances the 

National Bank of Ukraine does not intend to enter into new agreements with foreign central banks for the 

exchange of hryvnia banknotes obtained from war refugees, beyond those agreements that it has already 

concluded  with  certain  foreign  central  banks.  This  stance  seems  highly  relevant  to  the  practical 

implementation of the draft law, which provides that Banka Slovenije is to conclude an agreement with the 

National  Bank  of  Ukraine,  or  another  central  bank,  which  would  then  purchase  the  hryvnia  banknotes 

obtained by Banka Slovenije in the course of the implementation of the national scheme for their conversion 

into euro. The impact that the National Bank of Ukraine’s current stance on new agreements with foreign 

central banks has on the implementation of the national conversion scheme should therefore be considered 

by the Slovenian legislator.    

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7 

Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions 
referred to in Article [123 TFEU] and [Article 125(1) TFEU] (OJ L 332, 31.12.1993, p. 1).  
See, to that effect, Judgment of the Court of Justice of 13 September 2022, Banka Slovenije, C-45/21, EU:C:2022:670, 
paragraphs 67 to 75 and 84. 

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This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 3 November 2022. 

[signed] 

The President of the ECB 

Christine LAGARDE 

ECB-PUBLIC 

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