News

20.05.2016

Bank crisis in Cyprus ? EU institutions could not be held responsible

1.Opinion of Advocate General Wathelet, delivered on 21 April 2016 in Joined Cases C‑105/15 P to C‑109/15 P (Konstantinos Mallis and Elli Konstantinou Malli (C‑105/15 P), Tameio Pronoias Prosopikou Trapezis Kyprou (C‑106/15 P), Petros Chatzithoma and Elenitsa Chatzithoma (C‑107/15 P), Lella Chatziioannou (C‑108/15 P), Marinos Nikolaou (C‑109/15 P) v European Commission, European Central Bank)

http://eur-lex.europa.eu/legal-content/FR/TXT/?qid=1463406337569&uri=CELEX:62015CC0008

2.Opinion of Advocate General Wahl, delivered on 21 April 2016 in Joined Cases C‑8/15 P, C‑9/15 P and C‑10/15 P (Ledra Advertising Ltd (C8/15 P), Andreas Eleftheriou (C9/15 P), Eleni Eleftheriou (C9/15 P), Lilia Papachristofi (C9/15 P), Christos Theophilou (C10/15 P), Eleni Theophilou (C10/15 P) v European Commission, European Central Bank)

http://eur-lex.europa.eu/legal-content/FR/TXT/?qid=1463406612152&uri=CELEX:62015CC0105

……..

On 21st April 2016, Advocates General Melchior WATHLET and Nils WAHL delivered their opinion on the “Cypriot Bank Crisis” case dismissing the actions for annulment and damages claims lodged against the EU Commission and EU Central Bank as finding that the bank-saving measures in Cyprus were decided by the Euro Group and the International Monetary Fund and not by the defendant EU institutions.

BACKGROUND:

In 2012 Cyprus faced bank crisis. The Eurogroup (informal meeting of the Ministers of Finance of the European Euro Area) and the International Monetary Fund decided to grant financial aid and required bank restructuration in Cyprus. For that purpose, a Memorandum of Understanding was concluded with the Cypriot authorities, which lead to devaluation of bank deposits. Consequently, in 2003 several banks and individuals lodged claims before the General Court seeking compensation and annulment of the harmful measures. By eight Orders of 16th and 17th October 2014 the General Court found the actions to be inadmissible as they did not concern acts taken by the EU institutions (cases T-327/13, T-328/13, T-329/13, T-330/13, T-331/13, T-289/13, T-291/13 and T-293/13). The claimants lodged an appeal before the Court of Justice, which appointed two Advocates General to deliver opinions.

THE OPINIONS OF THE TWO ADVOCATES GENERAL:

Concerning the actions for annulment against the Eurogroup statement and the Memorandum of Understanding, Advocate Generals considered that Eurogroup was not an EU institution and, consequently, the Court of Justice had no jurisdiction to review its acts. They found that although the political weight of the Eurogroupe’s decisions and the active role played by the EU Commission and the EU Central bank during the negotiation procedure, the Eurogroup had simply acted as an international forum or as agents of the European Stability Mechanism without having received any delegation of powers. As consequence, the actions lodged against the EU institutions did not fulfil the requirements of Article 263 TFEU and the General Court had lawfully declared them inadmissible.

Concerning the actions for damages resulting from the Memorandum of Understanding, Advocate Generals considered that its author was not an EU institution and therefore, neither the EU Commission nor the EU Central Bank were at the origin of the harm suffered by Cypriote bank clients in the sense of Article 340 TFEU. Additionally, Advocates General examined the legal nature of the Memorandum of understanding finding that it had no biding effects. In this way, Advocate Generals highlighted the difference between, on the one hand, the EU institutions which belong to the EU legal order and, on the other hand, the European Stability fund and even the International Monetary Fund, which obey the traditional international public law rules.

CONTINUATION

If the Court of Justice fallows the opinions of its Advocates General, it will dismiss the actions. Claimants can also address claims to Greek courts or to courts in any other State from the Eurozone. The right to seise the Court of Justice will only arise in a case where an EU institution enacts rules based on the contested Memorandum.