text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Regulation (EU) 2019/2152

text: of the European Parliament and of the Council of 27 November 2019 on European business statistics, repealing 10 legal acts in the field of business statistics (OJ L 327, 17.12.2019, p. 1). See also Opinion

text: . All ECB opinions are available on EUR-Lex.

text: Regulation (EC) No 2533/98 of 23 November 1998

text: concerning the collection of statistical information by the European Central Bank (OJ L 318, 27.11.1998, p. 8). 8 Section 16 of the draft law on external trade statistics.

text: See Opinion

text: , paragraphs 1.1, 1.5 and 1.6. 10 Section 3(6) of the draft law and Section 16(4) of the draft law on external trade statistics.

title: Opinion of the European Central Bank of 12 March 2021 on the auditing of data from multinational enterprise groups to ensure the quality of national accounts and economic statistics (CON/2021/10)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 12 March 2021 on the auditing of data from multinational enterprise groups to ensure the quality of national accounts and economic statistics (

text: ) Introduction and legal basis

text: On 10 February 2021 the European Central Bank (ECB) received a request from the German Federal Ministry for Economy and Energy for an opinion on a draft law on the auditing of data from multinational enterprise groups to ensure the quality of national accounts and economic statistics (the ‘draft law’). The draft law is part of an omnibus law which also includes a draft law on external trade statistics. 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 and fourth indents of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law relates to Deutsche Bundesbank and balance of payment statistics. 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.

text: 1. The purpose of the provisions of the draft law

text: 1.1 The draft law forms part of the omnibus law which aims at harmonising national law with

text: Regulation (EU) 2019/2152

text: of the European Parliament and of the Council . The purpose of the draft law is to ensure the quality of national accounts and economic statistics and that the activities of multinational enterprise groups are accurately recorded in German and European statistics. The draft law also aims to improve the regulation of the mutual exchange of micro data relevant for the German balance of payments statistics compiled by Deutsche Bundesbank and for the national accounts and economic statistics compiled by the Statistisches Bundesamt (the Federal Statistical Office). 1.2 Under the draft law, Deutsche Bundesbank transmits to the Statistisches Bundesamt individual data for the compilation of its statistics upon request . The draft law also provides that the Statistisches Bundesamt and the statistical offices of the federal states may exchange data with Deutsche Bundesbank in order to clarify any inconsistencies in the relevant data records. It stipulates that such data must be processed by organisational units of Deutsche Bundesbank which are separate from

text: other areas of responsibility of Deutsche Bundesbank in terms of physical location, organisation and staff. 1.3 The draft law also requires cooperation between the Statistisches Bundesamt, the statistical offices of the federal states and Deutsche Bundesbank to ensure the quality of national accounts and economic statistics . In particular, in view of the need to survey the decision-making unit of a multinational enterprise group, the Statistisches Bundesamt must cooperate with Deutsche Bundesbank in order to clarify any inconsistencies related to the balance of payments statistics . Under the draft law, the Statistisches Bundesamt must transmit data received in the context of such surveys to Deutsche Bundesbank that relate to Deutsche Bundesbank’s data records. 1.4 The draft law stipulates that the Statistisches Bundesamt may also transmit data to national statistical authorities of the Member States and to members of the European System of Central Banks (ESCB), to the extent necessary to check and ensure the quality of the treatment of multinational enterprise groups in the national accounts and external economic statistics of Member States in accordance with Union law . The draft law also clarifies that any transmission of data deriving from Deutsche Bundesbank requires that Deutsche Bundesbank grants prior consent to such transmission in accordance with

text: Article 8

text: a of

text: Council Regulation (EC) No 2533/98

text: 2. The purpose of the provisions of the omnibus law on external trade statistics

text: The omnibus law contains in the draft law on external trade statistics a provision dealing with the exchange of data between Deutsche Bundesbank and the Statistisches Bundesamt on external trade statistics and balance of payments . It obliges Deutsche Bundesbank and the Statistisches Bundesamt to exchange individual data and stipulates that such statistical information must be used solely for statistical purposes and must be accessible only to individuals who deal with statistical matters within their specific field of work, which is separate from other areas of responsibility of the Deutsche Bundesbank in terms of physical location, organisation and staff.

text: 3. General observations

text: 3.1 The ECB welcomes the draft law and the draft law on external trade statistics which regulate data exchange with Deutsche Bundesbank. Moreover, the ECB welcomes the provisions of the draft law which deal with the transmission of statistical information to members of the ESCB to the extent necessary to check and ensure the quality of the treatment of multinational enterprise groups in the national accounts and external economic statistics of the Member States of the EU in accordance with Union law. The regulation of this transmission of statistical information enhances legal certainty. The ECB also notes the clarification in the draft law that any transmission of data deriving from

text: Deutsche Bundesbank requires its prior consent in accordance with the directly applicable

text: Article 8

text: a of

text: Regulation (EC) No 2533/98

text: . 3.2 Furthermore, the ECB welcomes the draft law in that it aims at improving the quality, consistency, harmonisation and compatibility of national and European statistics . It is in the interest of the overall usability of statistics that their consistency is preserved by the cooperation of the relevant national statistical authorities involved, including national central banks, and by the exchange of statistical information between the relevant stakeholders. The contribution of the draft law in this regard is particularly relevant in view of the increasingly globalised economy and the relevant role of multinational enterprise groups in economic developments. The improved data quality achieved through international exchange of statistical information will assist European and international efforts to meet the statistical challenges posed by globalisation. 3.3 Multinational enterprise groups’ activities may have a considerable impact on the ESCB’s tasks under the Treaty, namely defining and implementing monetary policy and contributing to the financial stability of the Union. The availability of high quality economic and financial statistics is crucial for the fulfilment of these tasks. 3.4 Finally, the ECB notes that the processing or use of statistical information received under the draft law and the draft law on external trade statistics must be carried out by organisational units which are separate from other areas of responsibility of Deutsche Bundesbank in terms of physical location, organisation and staff . The ECB understands that this requirement refers to the processing of the data received in a dedicated statistical unit to enable its use by the statistical systems to the extent legally feasible.

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 12 March 2021.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 17 March 2021 on the operating and technical requirements and the general terms and conditions for payment system operators (CON/2021/11)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 March 2021 on the operating and technical requirements and the general terms and conditions for payment system operators (

text: ) Introduction and legal basis

type: rubrik

text: On 14 January 2021, the European Central Bank (ECB) received a request from the Magyar Nemzeti Bank (MNB) for an opinion on a draft decree on the detailed requirements for operating a payment system and a draft decree on the requirements relating to the general terms and conditions and specific regulations for organisations operating a payment system (hereinafter the ‘draft decrees’). 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 and fifth indents of

text: , as the draft decrees relate to the MNB and payment and settlement systems. 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.

type: stycke

text: 1. Purpose of the draft decrees

text: 1.1 According to the Law CXXXIX of 2013 on the Magyar Nemzeti Bank (hereinafter the ‘Law on the MNB’), one of the basic tasks of the MNB is to develop and regulate payment and settlement systems, and to oversee and monitor these systems . Under the Law on credit institutions and financial enterprises , operating a payment system qualifies as an auxiliary financial service and is subject to the granting of a licence by the MNB. The Law on the MNB further stipulates that the entry into force of the general terms and conditions of the organisation operating the payment system, and any amendment thereof, is subject to the licence granted by the MNB. When granting the licence the MNB examines whether the general terms and conditions comply with the corresponding regulations . The Law on the MNB mandates the MNB with regulating the detailed rules for operating payment systems and the requirements regarding the general terms and conditions for payment system operators, by issuing decrees . In line with this mandate, the MNB Decree No. 35 of 2009 (XII. 28.) lays down the rules on the material, technical and security requirements for operating payment systems and for business continuity, and the MNB Decree No. 34 of 2009 (XII. 28.) lays

text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). down the requirements regarding the general terms and conditions for payment system operators (hereinafter jointly referred to as the ‘existing decrees’). 1.2 The MNB intends to repeal the existing decrees and replace them with the draft decrees. According to the MNB, the reasons for these amendments are twofold. First, the MNB intends to harmonise the existing decrees with the new principles and requirements set out in the Principles for Financial Market Infrastructures issued by the Committee on Payment and Settlement Systems and the Technical Committee of the International Organizations of Securities Commissions (hereinafter the ‘PFMIs’) and – although it does not apply in Hungary – in

text: Regulation (EU) No 795/2014

text: of the European Central Bank (ECB/2014/28) (hereinafter, the ‘ECB SIPS Regulation’) . Second, on the basis of an assessment carried out in recent years on the application of the existing decrees, the MNB intends to strengthen its oversight power. 1.3 The draft decrees do not affect the current scope of the existing decrees. In particular, the draft decrees would cover both the large-value payment system (i.e. VIBER, the Hungarian real-time gross settlement system operated by the MNB) and the retail payment system (ICS operated by GIRO Ltd.). 1.4 The draft decrees contain a set of technical requirements regarding the operation of payment systems. Apart from these rules of a rather technical nature, the draft decrees propose to introduce general conditions for operating payment systems. Among these general conditions, the draft decrees require payment system operators to have effective and documented governance arrangements and to make these available to the MNB. The draft decrees also state that these governance arrangements must clearly specify the roles and responsibilities of the members of the governance body and of the system’s management. The draft decrees also stipulate that payment system operators must establish comprehensive risk management frameworks to identify, measure, monitor and manage credit risk, liquidity risk, general business risk, custody and investment risk, operational and cyber security risk. While certain provisions of the draft decrees apply to the MNB as a payment system operator, the MNB is exempted from certain requirements , e.g. requirements in relation to effective governance arrangements, the responsibilities and roles of the governance body, the management and control system for the identification, monitoring and managing of business risk, the conditions applicable to the custodian with whom the system operator must hold its assets, and requirements regarding investment policies. 1.5 The draft decrees define the mandatory content of the general terms and conditions for payment system operators. The draft decrees also provide rules on the content and format of the policies of

text: 6 Available on the website of the Bank for International Settlements at www.bis.org.

text: 7 Regulation of the European Central Bank

text: (EU) No 795/2014

text: of 3 July 2014 on oversight requirements for systemically important payment systems (ECB/2014/28) (OJ L 217, 23.7.2014, p.16).

text: 8 See, in particular, the draft decree on the detailed requirements for operating a payment system.

text: 9 See, in particular, Article 3 of the draft decree on the detailed requirements for operating a payment system.

text: 10 See, in particular, Article 3 of the draft decree on the detailed requirements for operating a payment system.

text: 11 See, in particular, Article 4 of the draft decree on the detailed requirements for operating a payment system.

text: 13 See, in particular,

text: Articles 3

text: to 16 of the draft decree on the requirements relating to the general terms and conditions and specific regulations for organisations operating a payment system. the payment system operator in relation to managing contingency situations and to managing fees, charges and commissions applied by the system operator.

text: 2. General observations

text: Article 139(2)

text: (c) of the Treaty stipulates, inter alia, that the basic objectives and tasks of the European System of Central Banks (ESCB) as listed in Article 127(2) of the Treaty, including promoting the smooth operation of payment systems, will not apply to Member States with a derogation, such as Hungary. The ECB would like to emphasise that, although Member States with a derogation, including Hungary, do not yet participate in the third stage of economic and monetary union, their legislative reforms, in particular when they refer to the national central bank, as the present reform does, should aim to gradually achieve consistency and legal convergence with ESCB standards, in accordance with the convergence process obligations enshrined in the Treaty . 2.2 The draft decrees establish requirements for the operation of payment systems in Hungary in order to ensure their efficient, smooth and sound operation in line with international standards, in particular the PFMIs. The ECB welcomes the MNB’s intention of harmonising the rules on payment system operators with the principles established under the PFMIs, and also – even though it does not apply in Hungary – the ECB SIPS Regulation. The ECB also welcomes the MNB’s intention of strengthening its oversight powers by establishing requirements on governance arrangements, a clear definition of the responsibilities and roles of both the system’s governance body and management, and on risk management.

text: 3. Specific observations

text: 3.1 Definitions There are some inconsistencies between the definitions used in the draft decrees, e.g. the definitions of ‘direct participant’, ‘settlement’ or ‘settlement agent’. Since the scope of each of the draft decrees is identical, it would be useful to align these definitions. The concept of ‘legal, credit, liquidity and operational risks’ are not defined in the draft decrees , leaving room for individual assessments of these risks by system operators. 3.2 Comprehensive risk management control The draft decrees set out a comprehensive and detailed framework with the aim of ensuring the efficiency of risk management controls. 3.3 Requirements related to liquidity risk It is important that payment system operators and the participants of the payment system have a comprehensive liquidity risk management framework in which settlement and funding flow are identified, measured and monitored. Where payment systems are subject to the draft decrees, it is

text: 14 See paragraph 3.4 of Opinion

text: and paragraphs 2.1 and 2.6 of Opinion

text: . All ECB opinions are published on EUR-Lex.

text: 15 See Article 7 of the draft decree on the requirements relating to the general terms and conditions and specific not the payment system operator but the participants of the payment system who provide liquidity. Taking this into account, the ECB understands that it is not necessary that the draft decrees contain requirements vis-á-vis the payment system operator in respect of liquidity risk management. Nevertheless, the payment system operator should ensure that participants hold sufficient liquid resources at all times, from the moment financial obligations are established, in all currencies in which it operates, to ensure same-day settlement of financial obligations in a wide range of potential stress scenarios. The draft decrees contain requirements regarding comprehensive risk management . The draft decrees also require that the payment system operator shall specify the tools provided to cooperating parties in order to ensure same-day, and where possible intraday, liquidity for settlement. In this respect, it should be ensured that participants are required to hold sufficient liquid resources in all potential stress scenarios. 3.4 Requirements relating to participant default The draft decrees do not contain a definition of situations which constitute cases of participant default. However, the ECB understands that the draft decrees sufficiently set out the scenarios as a result of which a participant default may arise. This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 17 March 2021. [signed] The President of the ECB Christine LAGARDE

type: vagledning

utgivare: ecb


text: A Magyar Nemzeti Bankról szóló 2013. évi CXXXIX. törvény.

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: ‘MNB introduces a green preferential capital requirement programme’, press releases 2019, available on the MNB’s website at www.mnb.hu

text: See Christine Lagarde, ‘Climate change and central banking’, ILF conference on Green Banking and Green Central Banking, Frankfurt am Main, 25 January 2021, available on the ECB’s website at www.ecb.europa.eu.

text: See Isabel Schnabel, ‘Never waste a crisis: COVID-19, climate change and monetary policy’, virtual roundtable on ‘Sustainable Crisis Responses in Europe’, INSPIRE Research Network, 17 July 2020, available on the ECB’s website at www.ecb.europa.eu.

text: See ‘Climate change and monetary policy: initial takeaways, technical document, June 2020, available on the Network of Central Banks and Supervisors for Greening the Financial System’s website at www.ngfs.net. f

text: Council Regulation (EC) No 3603/93 of 13 December 1993

text: specifying definitions for the application of the prohibitions referred to in Articles

text: and

text: b (1) of the Treaty (OJ L 332, 31.12.1993, p. 1).

text: For example, in Austria, financial subsidies for housing projects are granted and administered by competent departments of the regional governments. In France, the Ministry of Finance in collaboration with the Agency for Environment and Energy Management (ADEME) promotes an eco-loan to facilitate energy renovation, granted by commercial banks with a financial ceiling, but regardless of income conditions.

text: For example, in Germany, depending on the financial support chosen, either the state-owned promotional bank KfW provides a subsidised loan at favourable conditions or the Federal Office for Economic Affairs and Export Control (Bundesamt für Ausfuhrkontrolle BAFA) pays State subsidies. In Greece, such financial support in connection with energy-efficient housing projects is granted through the Hellenic Development Bank (HDB). In Latvia, a state-owned development finance institution ALTUM is mandated to provide financial aid for energy efficiency improvement measures.

text: For example, in Croatia the 2003 Law on the Fund for Environmental Protection and Energy Efficiency set up the Environmental Protection and Energy Efficiency Fund as a legal entity with public authority for collecting and investing extra budgetary resources in programmes and projects supporting environmental and nature protection, energy efficiency and the use of renewable energy sources.

text: For example, in Estonia the KredEx foundation was set up by the Ministry of Economic Affairs and Communications inter alia with the aim of increasing the energy performance of residential buildings in Estonia.

text: For example, in Ireland the Better Energy Warmer Homes Scheme (BEWHS) is operated by the Sustainable Energy Authority of Ireland (SEAI) and co-funded by the Irish Government and the Union through the European Regional Development Fund.

text: See the ECB’s 2016 Convergence Report, p. 25.

title: Opinion of the European Central Bank of 19 March 2021 on the mandate and tasks of the Magyar Nemzeti Bank relating to environmental sustainability (CON/2021/12)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 19 March 2021 on the mandate and tasks of the Magyar Nemzeti Bank relating to environmental sustainability (

text: ) Introduction and legal basis

text: On 18 December 2020, the European Central Bank (ECB) received a request from the Hungarian Ministry of Finance for an opinion on a draft law amending the Law on the Magyar Nemzeti Bank (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

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law concerns the Magyar Nemzeti Bank (hereinafter the ‘MNB’). 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.

text: 1. Purpose of the draft law

text: 1.1 According to the explanatory memorandum accompanying the draft law, which has been prepared by the MNB for the Hungarian Ministry of Finance, the draft law was conceived by the MNB in line with its vision of a green central bank. 1.2 The draft law would amend the Law on the MNB in three respects. 1.3 First, the draft law provides that, without prejudice to its primary objective of achieving and maintaining price stability, as a secondary objective, the MNB supports the government’s economic policy and its policy related to environmental sustainability, using instruments at its disposal. 1.4 The explanatory memorandum emphasises that environmental sustainability concerns are expected to have a fundamental impact on price and financial stability, and, therefore, greater emphasis must be placed on these issues by central banks. The explanatory memorandum notes that integrating environmental sustainability considerations has been added to a growing range of central bank activities, including incorporating risks arising from climate change into the various aspects of financial stability, taking into account the risk exposures of financial market participants identified in relation to climate change, and minimising the ecological footprint of central bank operations. Environmental sustainability also has an effect on monetary policy: environmental and

text: weather processes can lead to an increase in the volatility of food prices, and the structural transformation of the economy can have an influence on inflation over the longer term. Reference is made in this context to the assessment of inter-relationships between climate change and monetary policy as part of the ECB’s strategy review. According to the explanatory memorandum, the MNB is not explicitly entitled by current law to take action in relation to environmental sustainability in the context of monetary policy. Thus, the Hungarian legislator considers it necessary to prescribe in the Law on the MNB that the MNB shall support environmental sustainability with the means at its disposal, without prejudice to its primary objective of achieving and maintaining price stability. 1.5 Second, the draft law enables the MNB to use the revenues from supervisory fees, fines imposed by the MNB and administrative service fees to offset the impact of its activities on the environment, in order to facilitate and support the implementation of environmental objectives. The explanatory memorandum clarifies in this respect that the MNB would like to provide a positive example in the field of environmental protection to institutions under its supervision and other domestic organisations. 1.6 Third, the draft law provides that, as instruments of its monetary policy, the MNB will provide energy efficiency consumer loans and, in relation to this task, the MNB will manage Hungarian forint accounts for consumers. The explanatory memorandum explains that in Hungary residential buildings are responsible for nearly 25 % of the national primary energy consumption, and energy consumption per dwelling is high compared to the European Union average. In addition, the renewal rate of the housing stock is lower than the regional average. The MNB introduced a Green Preferential Capital Requirement Programme in 2019. The programme ensures that credit institutions receive a Pillar II capital requirement reduction on consumer loans serving energyefficient home purposes if consumers receive an interest rate subsidy. However, up to now banks have not incorporated the beneficial features of green mortgage loans into their lending standards and prices. According to the explanatory memorandum, as the current business models of banks do not incorporate the positive externalities relating to energy efficient mortgages, a central bank programme that enables direct lending to retail clients would be needed. This could spur green residential real estate constructions and renovations, help renew the domestic residential real estate stock, and therefore support cutting greenhouse gas emissions. The programme would also incentivise market participants to provide new green housing loans.

text: 2. Explicit reference in the MNB’s objectives to support of environmental sustainability

text: 2.1 The ECB welcomes the proposed amendment of the MNB’s mandate, which provides that, without prejudice to its primary objective of achieving and maintaining price stability, the MNB shall support, as a secondary objective, the government’s policy related to environmental sustainability. The ECB understands that the purpose of the draft law is to emphasise the role of environmental sustainability amongst the MNB’s secondary objectives.

text: 2.2 The ECB notes that supporting the general economic policies of the government, without prejudice to its primary objective of achieving and maintaining price stability, is already part of the mandate of the MNB. Policies contributing to a high level of environmental protection that have an economic dimension or qualify as general economic policies of the government are implicitly covered by the current mandate of the MNB. Hence, the ECB understands that the draft law does not aim at introducing a substantial reform of the MNB’s mandate, but rather at clarifying the MNB’s existing mandate by explicitly specifying environmental sustainability as a secondary objective of the MNB. 2.3 The proposed change to the MNB’s mandate provided for in the draft law is compatible with the Treaties. In accordance with Articles 119(2), 127(1) and 282(2) of the TFEU the primary objective of the European System of Central Banks (ESCB) is to maintain price stability. Without prejudice to the objective of price stability, the ESCB supports the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on the European Union (TEU). The ESCB acts in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in

text: Article 119

text: TFEU.

text: Article 3(3)

text: TEU in turn provides that the Union must, inter alia, work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. In addition,

text: Article 11

text: TFEU provides that environmental protection requirements must be integrated into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development. In the same vein, Article 37 of the Charter of Fundamental Rights of the European Union stipulates that a high level of environmental protection and the improvement of the quality of the environment must be integrated into the policies of the Union and ensured in accordance with the principle of sustainable development. 2.4 Climate change can specifically impact central banks, and the manner in which they discharge their mandates. Physical risks and transition risks associated with climate change can potentially cause abrupt changes in prices and thereby threaten price stability . Although methodologies to assess the magnitude of climate-related risks for banks and financial stability are still being developed, available estimates suggest that the impact of these risks is likely to be significant . This, in turn, could impair the transmission mechanism of monetary policy. The Network of Central Banks and Supervisors for Greening the Financial System (hereinafter the ‘NGFS’), an international group of 87 central banks and supervisors, including most ESCB central banks, recommends, therefore, that central banks consider the possible effects of climate change on the economy. The NGFS argues that these effects may be relevant to monetary policy even if they only materialise beyond the conventional three- to five-year policy horizon .

text: 3. Offsetting the MNB’s carbon footprint

text: The ECB welcomes the MNB’s initiative to offset its carbon footprint as a complementary measure to the accomplishment of its other institutional environmental objectives. While many central banks in the ESCB seek to offset their carbon footprint as part of good corporate governance, it is relatively rare for central banks’ activities in this area to be specifically mandated by law. In this respect, the ECB understands that this specific provision in the draft law is introduced to make the MNB’s spending on the offsetting of its carbon footprint transparent, and that the draft law does not authorise the MNB to use its revenues to facilitate and support the implementation of environmental objectives generally, but rather only to avoid, reduce and offset the impact of the MNB’s own activities on the environment.

text: 4. The MNB’s new task to provide energy efficiency loans to consumers

text: 4.1 The draft law confers a new task on the MNB by requiring the MNB, as part of the instruments of its monetary policy, to provide energy efficiency loans directly to consumers in order to support green residential real estate developments. 4.2 In accordance with Article 42.2 of the Statute of the ESCB, the central banks of Member States with a derogation, including Hungary, retain their powers in the field of monetary policy according to national law. This notwithstanding, the explanatory memorandum accompanying the draft law argues that the current business models of banks do not incorporate positive externalities relating to energy efficient mortgage loans and therefore a central bank programme that enables direct lending to retail clients is needed. In this respect, the explanatory memorandum does not convincingly reason that such lending is linked to the primary objective of monetary policy to maintain price stability, which would qualify such intervention as a monetary policy measure. Moreover, direct residential real estate lending to consumers is not expressly among the instruments of monetary policy envisaged for the ECB and the NCBs by the TFEU and the Statute of the ESCB. Monetary operations within the ESCB are typically conducted via the banking sector, by setting lending or borrowing conditions which are transmitted to consumers and businesses, or via open market operations that affect financing conditions. Such operations pursue a monetary policy objective, unlike the direct provision of energy efficiency loans to consumers, which pursue an objective that can be better served by government agencies or credit institutions. Against this backdrop, the ECB emphasises that a proposed conferral of new tasks on a national central bank (NCB) participating in the ESCB, including the MNB, must be assessed against the prohibition of monetary financing laid down in

text: Article 123(1)

text: TFEU. For the purposes of that prohibition,

text: Article 1(1)

text: (b)(ii) of

text: Council Regulation (EC) No 3603/93

text: defines ‘other type of credit facility’ as, inter alia, ‘any financing of the public sector’s obligations vis-à-vis third parties’. 4.3 Ensuring that Member States maintain a sound budgetary policy is one of the key objectives of the prohibition on monetary financing, which may not be circumvented. Therefore, the task of financing

text: 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 within the responsibility of the Member States. In other words, adequate safeguards must be in place to ensure that circumventions of the objective of the prohibition on monetary financing, which is to maintain sound budgetary policy by Member States, do not take place. 4.4 As part of its discretion in the exercise of its duty – on the basis of

text: Article 271

text: (d) TFEU and Article 35.6 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’) – to ensure that NCBs honour the obligations laid down by the TFEU, the Governing Council has endorsed safeguards in the form of criteria for determining what may be considered as falling within the scope of ‘the public sector’s obligations vis-à-vis third parties’ within the meaning of

text: Article 1(1)

text: (b)(ii) of

text: Regulation (EC) No 3603/93

text: 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 TFEU and the Statute of the ESCB. These tasks are mainly defined in

text: Article 127(2)

text: , (5) and (6), and

text: Article 128(1)

text: TFEU, as well as in Article 22 of the Statute of the ESCB. Second, as Article 14.4 of the Statute of the ESCB allows NCBs to perform ‘functions other than those specified in [the Statute of the ESCB]’, 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 of 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 its performance 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 existing central bank tasks should not be interpreted broadly so that it could lead to the creation of an indefinite chain of ancillary tasks. Such complementarity should be examined in relation to the financing of those tasks;

text: (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 properly perform 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 that 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. 4.5 Tasks related to the tasks conferred upon the ECB and the NCBs by the TFEU and the Statute of

text: the ESCB

text: As previously noted, direct residential real estate lending to consumers is not expressly among the instruments of monetary policy envisaged for the ECB and the NCBs by the TFEU and the Statute of the ESCB. Moreover, it is not clear from the explanatory memorandum that such lending is linked to the primary objective of monetary policy to maintain price stability. 4.6 Tasks which are atypical of central bank tasks Direct residential real estate lending to consumers is atypical of central bank tasks. With the exception of lending by some ESCB central banks to their staff, no central bank in the ESCB currently engages in direct lending to consumers. In certain Member States the provision of financial support to subsidise energy efficiency loans to consumers in order to support green residential real estate developments is conducted directly by the State, or State-owned entities 9 10 11 12 such as development banks , funds or foundations , also under co-funded Union schemes . As previously noted, monetary operations within the ESCB are typically conducted via the banking sector, by setting lending or borrowing conditions which are transmitted to consumers and businesses, or via open market operations that affect financing conditions. Such operations pursue

text: a monetary policy objective, unlike the direct provision of energy efficiency loans to consumers, which pursue an objective that can be better served by government agencies or credit institutions. 4.7 Tasks clearly discharged on behalf of and in the exclusive interest of the government As noted above, in those Member States where financial support is provided to subsidise energy efficiency loans to consumers in order to support green residential real estate developments, this support is provided directly by the State, or by State-owned entities such as development banks, funds or foundations. 4.8 Extent to which performance of the new tasks creates conflicts of interest with existing central bank

text: tasks

text: As indicated above, central bank operations in the ESCB are conducted with credit institutions and other market participants with a view to maintaining the primary objective of price stability. While the ESCB has a duty, without prejudice to the objective of price stability, to support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union, including working for a high level of protection and improvement of the quality of the environment, it may be questioned whether direct residential real estate lending to consumers to support green residential real estate developments would be in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, or if any interference with this principle could be justified by the central bank in accordance with proportionality standards. Mortgage lending to consumers is typically undertaken by credit institutions in an open market economy where credit institutions compete with one another for mortgage lending business, subject to supervision by the public authorities responsible for the prudential supervision of credit institutions (in Hungary, the MNB) and the protection of consumers. In principle, the entry by a central bank into this market would distort the market, and raise questions as to how the activities of the central bank would be overseen or supervised. It would seem that credit institutions would be better positioned than central banks to price mortgage loans. Moreover, given that central banks are not the primary actors when it comes to economic or environmental policies, if the Hungarian authorities perceive that there is a need for State intervention in the mortgage lending market for green residential real estate developments, it would seem incumbent on the authorities to explore options other than direct lending to consumers by central banks, such as government subsidies or appropriate lending arrangements financed through development or other State-owned banks. It would otherwise not be apparent that the departure from the principle of an open market economy could be justified by the central bank in accordance with proportionality standards. It should also be noted that an arrangement whereby the central bank is tasked by law to perform certain non-standard tasks stands in stark contrast to one where the central bank has the freedom to undertake operations, which could be seen as diminishing central bank independence. The MNB’s competence to independently decide on conducting operations with its monetary counterparts via regular instruments of monetary policy, which may support the Hungarian government’s policy relating to environmental sustainability, should not be prejudiced. 4.9 Extent to which the performance of the new tasks is disproportionate to MNB’s financial or

text: organisational capacity

text: The principle of financial independence requires NCBs to have sufficient means to carry out not only their ESCB-related tasks but also their national tasks, both from an operational and financial perspective . To perform its new task under the draft law, the MNB would be obliged to dedicate substantial additional human and financial resources to manage its new consumer lending portfolios. Mortgage lending is a demanding commercial banking business, requiring extensive due diligence on the part of lenders, including assessing the creditworthiness of large numbers of individual borrowers in the general population, valuing real estate in different urban and rural locations, mobilising collateral in the form of security interests over residential real estate which may need to be foreclosed in the event of borrower default, ensuring that the borrower has appropriate life and property insurance arrangements in place, attending to any relevant consumer protection issues, and so on. Central banks do not have a particular operational expertise in this intricate business. The performance of these extensive new tasks would therefore appear to be disproportionate to the MNB’s existing financial and organisational capacity, in the absence of supplementary means being granted to the MNB. 4.10 Extent to which performance of the new tasks fits into the MNB’s institutional set-up, in the light of

text: Mortgage lending is a matter of great interest to the general public, as a mortgage loan counts among the most significant financial commitments undertaken by the individual citizen. The MNB would therefore assume the reputational risk of being held accountable by the general public and, indeed, the institutions of government for any perceived shortcomings in the performance of its new consumer lending activities. This new task, therefore, does not appear to smoothly fit into the MNB’s existing institutional set-up. 4.11 Extent to which the performance of tasks harbours substantial financial risks The MNB’s proposed lending activities would mean that the MNB would assume substantial credit risks on its balance sheet. Based on the nature of such loans, credit risks would remain on the balance sheet of the central bank for a prolonged period of time, possibly extending to decades. As with any mortgage lending portfolio, which is susceptible to fluctuations in real estate prices and general economic developments, this activity could potentially expose the MNB to substantial financial risks. This is different from central banks providing credit to their monetary policy counterparts against marketable mortgage-related collateral, where financial risks for the central bank are limited through adequate risk management measures such as minimum credit ratings, valuation haircuts which are marked to market and margin calls. Similar risk management measures would be impossible to implement for direct lending to consumers. Furthermore, while central bank credit through monetary policy operations is provided on the same conditions to all counterparties, for direct lending to consumers the creditworthiness of the individual borrowers would impact their eligibility to obtain a mortgage loan, the principal amount of the loan, and in some cases also the interest rate. 4.12 Conclusion

text: The ECB supports the provision of energy efficiency loans, which is a reality across the Union already and needs to be expanded. The ECB also understands the wish of the Hungarian authorities to reach an acceleration of this kind of lending in Hungary. However, the new task proposed to be conferred on the MNB to provide energy efficiency loans directly to consumers in order to support green residential real estate developments is a task which can be more appropriately performed by private or state-owned credit institutions or development banks, rather than central banks. Within the framework of the ESCB, direct residential real estate lending to consumers is not among the instruments of monetary policy expressly envisaged for the ECB and the NCBs by the TFEU and the Statute of the ESCB. This task is atypical of central bank tasks. With the exception of lending by some ESCB central banks to their staff, no central bank in the ESCB currently engages in direct lending to consumers. In certain Member States the provision of financial support to subsidise energy efficiency loans to consumers in order to support green residential real estate developments is conducted directly by the State, or state-owned banks or development banks. Against this backdrop, it is suggested that such a task would be discharged on behalf of and in the exclusive interest of the government. Given the substantial operational challenges of the mortgage lending business, this task would, in the absence of further means being granted to the MNB, be disproportionate to the MNB’s financial and organisational capacity, and could leave the MNB vulnerable to substantial financial risks. The performance of this task would also entail reputational risks for the MNB, and would not fit smoothly into the MNB’s institutional set-up. The performance of this task would therefore be classified as a government, rather than a central banking task for the purposes of the prohibition of monetary financing, and would, accordingly, have to be entirely conducted by the State, rather than with central bank resources. Also, the MNB’s competence to independently decide on conducting operations with its monetary counterparts via regular instruments of monetary policy should not be prejudiced. In conclusion, the ECB notes that central banks can independently decide on conducting operations with their monetary counterparts via regular instruments of monetary policy, which may support the government’s policy relating to environmental sustainability. However, for the reasons indicated above, the Hungarian authorities are strongly encouraged not to allocate to the MNB the task of providing energy efficiency loans directly to consumers.

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 19 March 2021.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


text: Projecto de Lei n.º 606/XIV/2ª – Aprova o regime jurídico da desclassificação de contratos ou outros documentos que comprometem o Estado ou outras entidades integradas no perímetro orçamental em sectores fundamentais; Projecto de Lei n.º 634/XIV/2ª – Aprova um regime jurídico de transparência dos contratos, acordos e outros documentos relativos a operações que determinem a utilização ou disponibilização de fundos públicos relativamente a entidades pertencentes a sectores estratégicos. 2

text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Directive

text: of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338).

text: Directive

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190). 5 See

text: Articles 5

text: to 9 and 27 to 30 of Directive

text: . 6 See

text: Article 4(1)

text: (i) of

text: Council Regulation (EU) No 1024/2013 of 15 October 2013

text: 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).

title: Opinion of the European Central Bank of 23 March 2021 on the creation of a transparency framework for contracts and related documents involving the use of public funds (CON/2021/13)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 23 March 2021 on the creation of a transparency framework for contracts and related documents involving the use of public funds (

text: ) Introduction and legal basis

text: On 5 February 2021, the European Central Bank (ECB) received a request from the Portuguese Assembly of the Republic for an opinion on two draft laws creating a transparency framework for contracts and related documents involving the use of public funds (hereinafter the ‘draft laws’) . 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

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft laws relate to the specific tasks conferred upon the ECB concerning the prudential supervision of credit institutions under Article 127(6) of the Treaty. 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.

text: 1. Purpose of the draft laws

text: 1.1 According to the explanatory memoranda accompanying the draft laws, their main objective is to reinforce the transparency and scrutiny of operations which involve the use of public funds by allowing the Assembly of the Republic to declassify certain contracts originally classified as confidential concluded by the State or other public entities which involve the use of public funds in several sectors if they are subject to confidentiality safeguards. The purpose is to increase transparency and allow these documents to be publicly available given their impact on public finances. 1.2 Both draft laws apply to contracts and agreements concluded by the State, or by any entities included within the scope of the State Budget, which involve the use of public funds in specific economic sectors, including the banking and financial sector. One of the draft laws expressly mentions that all operations involving the use of public funds in the context of the application of resolution measures, nationalisation, liquidation or capitalisation are included within this scope of application.

text: 1.3 According to the draft laws, the Assembly of the Republic will be authorised to declassify such contracts stating the reasons for the declassification and weighing the reasons that justify confidentiality against taxpayer’s right of information. 1.4 Under both draft laws not only the contracts themselves, but also all documents and information considered to be connected or related to such contracts, are subject to the declassification decision by the Assembly of the Republic. Furthermore, the disclosure might also include the names of entities or individuals who have originated losses at the entity that is the beneficiary of public funds. 1.5 Non-compliance with the obligation to disclose after a decision to declassify is adopted by the Assembly of the Republic shall be subject to criminal liability. 1.6 Both draft laws provide that they will prevail over any other legal framework providing for banking or commercial confidentiality safeguards. 1.7 Finally, both draft laws expressly provide that they are to be applied not only to new contracts concluded by the State, or by the other public entities included within their scope of application, but also to all pre-existing contracts which have involved the use of public funds. One of the draft laws establishes a limitation for contracts which have been concluded more than 14 years ago, which would remain out of the scope of application of that draft law.

text: 2. Observations

text: 2.1 National legislation should be compatible with the obligation to maintain professional secrecy in respect of confidential prudential supervisory information under Union law, in particular

text: Article 53 of Directive 2013/36/EU

text: of the European Parliament and of the Council . Disclosure of such confidential information can only be permitted in the cases specified in

text: Article 53(1) of Directive 2013/36/EU

text: . 2.2 The ECB takes particular note that Banco de Portugal (‘BdP’), as the national competent authority responsible for the prudential supervision of credit institutions, is not included among the public entities to which the draft laws apply. However, while contracts concluded by the BdP as such would not be subject to public disclosure, contracts concluded with credit institutions by other public authorities, such as the Portuguese Resolution Fund, are included within the scope of application of the draft laws, as well as any contracts concluded between credit institutions and other public entities involving the use of public funds. In addition, both draft laws provide that all documents and information considered to be connected or related to such contracts are also subject to public disclosure. This means that these other documents and information, even if they do not form part of the contract itself, can still be subject to declassification and public disclosure. 2.3 The ECB understands that, because the BdP would not be subject to the draft laws, such documents or information would not include prudential supervisory documents in the possession of the authorities responsible for the prudential supervision of credit institutions, including the BdP and the ECB, even if those documents were related to contracts within the scope of application of

text: the draft laws. Any prudential supervisory documents and information would remain subject to confidentiality protections, as both the BdP and the ECB are – and will remain – outside the scope of the draft laws. Moreover, the documents or information to be disclosed under the draft laws due to their connection to the contracts involving the use of public funds, even if they are not formally prudential supervisory documents, could not include confidential supervisory information, since the public disclosure of such documents or information would clearly undermine the professional secrecy protected by

text: Article 53 of Directive 2013/36/EU

text: . Therefore, the public disclosure of such documents or information would inevitably contravene

text: Article 53 of Directive 2013/36/EU

text: . Any confidential supervisory information contained in such documents would therefore have to be redacted. 2.4 Both draft laws exclude from their scope of application other special frameworks, which remain applicable. One of the draft laws also excludes matters subject to State or judicial secrecy, which are not subject to declassification under the draft laws. However, both draft laws explicitly state that they prevail over any other legal framework providing for banking or commercial confidentiality safeguards. In order to establish a framework which safeguards both confidential information and the legitimate interest of the public in accessing the information, as well as the primacy of Union law over national law, the ECB understands that it would not be possible to declassify confidential supervisory documents and information under the draft laws, as such an interpretation would not be compatible with the protection of confidential supervisory information under Directive

text: . 2.5 Regarding the provisions for the disclosure of operations involving the use of public funds in the context of resolution, Directive

text: of the European Parliament and of the Council confers powers not only on resolution authorities but also on competent supervisory authorities. Notably, Directive

text: contains the only legal basis for the competent supervisory authorities’ powers in relation to recovery planning and early intervention measures , with respect to which competent supervisory authorities have a leading role. Both of these powers relate to prudential supervisory tasks, as recognised in

text: Council Regulation (EU) No 1024/2013

text: . In addition, while not in the lead, competent supervisory authorities are consulted by resolution authorities or cooperate with them in several other processes. In this regard, the ECB would like to recall that Directive

text: also establishes confidentiality obligations as a necessary counterpart reinforcing the professional secrecy obligations in Directive

text: . With regard to all the processes where competent authorities intervene (whether led by the competent supervisory authorities or by the resolution authorities) competent supervisory authorities have various obligations to disclose confidential supervisory information to resolution authorities (and in some cases to some other authorities mentioned). On their part, resolution authorities have even broader duties to disclose confidential information to other authorities. In particular, the ECB notes that the scope of the

text: confidentiality obligation of

text: Article 84 of Directive 2014/59/EU

text: applies to resolution authorities and other public institutions and private individuals, such as ministries, deposit guarantee funds or acquirers participating in competitive processes, some of which would potentially be compelled to disclose information under the draft laws. Since the competent supervisory authorities are an important source of information for resolution authorities, which only collect information directly from credit institutions to the extent that it is not yet available at the competent authorities, in various situations resolution authorities may be required to disclose onward to another authority confidential information collected by and received from the competent supervisory authority. From a prudential supervisory perspective, care must be taken to ensure that the public disclosure of such documents or information, in potential contravention of

text: Article 84 of Directive 2014/59/EU

text: , does not also lead to the disclosure of confidential supervisory information in breach of the professional secrecy protected by

text: Article 53 of Directive 2013/36/EU

text: . Any confidential supervisory information contained in such documents would therefore have to be redacted. 2.6 According to the draft laws, the declassification decision by the Assembly of the Republic might also include the disclosure of the names of entities or individuals who have originated losses at an entity that is a beneficiary of public funds. One of the draft laws also adds that the identification of shareholders and members of the management body of entities who have originated those losses would also be subject to such disclosure. Such information may constitute confidential supervisory information which must remain subject to professional secrecy requirements in order to comply with the confidentiality rules established in Directive

text: . 2.7 Finally, it is important to consider that any unintended disclosure of confidential supervisory information which might be facilitated under the draft laws could also have a negative impact on the possibility for prudential supervisory authorities to exchange information with other authorities, by limiting the amount of information that supervisory authorities can disclose to other entities. According to Articles

text: and

text: of Directive 2013/36/EU, the competent supervisory authority can exchange information with other authorities, such as national market authorities, oversight bodies and the central government. In all of these cases, the exchange of information can only occur if the information disclosed is subject to secrecy requirements at least equivalent to those referred to in

text: Article 53 of Directive 2013/36/EU

text: . This means that if the information in question to be shared by the competent supervisory authority is considered to be connected or related to a contract that could be made public according to the draft laws, then the competent supervisory authority could no longer disclose such information to the entities referred to in Directive

text: . Currently, in the absence of the draft laws, such information could be exchanged.

text: Done at Frankfurt am Main, 23 March 2021.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


title: Opinion of the European Central Bank of 20 April 2021 on rounding rules for payments denominated in euro (CON/2021/14)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 April 2021 on rounding rules for payments denominated in euro (

text: ) Introduction and legal basis

text: On 25 February 2021 the European Central Bank (ECB) received a request from the Minister for Finance of the Slovak Republic for an opinion on a draft Law amending Law No 18/1996 on prices, as amended (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 first and second indents of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law relates to currency matters and means of payment. 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.

text: 1. Purpose of the draft law

text: 1.1 The purpose of the draft law is to introduce the rounding of prices of goods and services which are paid in cash to the nearest 5 cent. Cash payments of 1 and 2 cent are to be rounded to 5 cent. For cash payments of other amounts, the non-rounded amount of less than half of the value of 5 cent is to be rounded down and the total remainder of non-rounded cash payments equal to or greater than half of the value of 5 cent are to be rounded up. When the purchase of several goods is paid for by a single cash payment, only the total (final) cash payment is rounded (i.e. the price of individual items contributing to the final cash amount to be paid is not rounded). 1.2 The explanatory memorandum explains that the purpose of the draft law is to minimise the need to use 1 and 2 cent coins, with the aim of (a) reducing costs for entrepreneurs and the public in relation to bank fees charged for depositing or processing 1 and 2 cent coins, (b) simplifying the issuance of coins for cash payments, and (c) reducing the use of packaging materials and transportation required for these coins, thus having a positive environmental effect.

text: 1 Návrh zákona ktorým sa mení zákon Národnej rady Slovenskej republiky č. 18/1996 Z. z. o cenách v znení neskorších predpisov.

text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: 2. General observations

text: 2.1 The draft law is not likely to have a real impact on inflation in Slovakia, particularly considering that, except for cash payments of 1 and 2 cent, the rounding of prices is symmetrical and confined to final cash amounts to be paid. 2.2 In accordance with Article 128(2) of the Treaty, the competence to adopt measures to harmonise the denomination and technical specifications of all euro coins intended for circulation to the extent necessary to permit their smooth circulation within the Union is vested in the Council of the European Union, on a proposal from the European Commission and after consulting the European Parliament and the ECB. The legal tender status of euro cent coins within the euro area is laid down in

text: Article 11 of Council Regulation (EC) No 974/98

text: . In addition,

text: Article 2 of Regulation (EC) No 974/98

text: provides that the euro, as the currency of the euro area, is divided into one hundred cent. The denomination structure of the euro coins (i.e. 1, 2, 5, 10, 50 euro cent, 1 euro and 2 euro coins) has remained unchanged since the introduction of the euro . However, the use of different denominations of euro coins, as currently devised, should be periodically and carefully examined by the competent institutions against the criteria of cost and public acceptability. In particular, the Commission should conduct an impact assessment on the continued issuance of 1 and 2 euro cent coins . In this regard, the Commission has performed a public consultation on uniform rounding rules for cash payments in euro, with the response period having closed on 11 January 2021. 2.3 With a view to preserving the unity and integrity of the single monetary area, and considering the abovementioned ongoing work of the Commission, the ECB recommends that any rounding rules are established in a harmonised manner at Union, rather than at national level . Accordingly, any mandatory rounding rules on euro coins would appear to call exclusively for Union rather than national legislation given that the euro coins are the only legal tender coins in the Members States whose currency is the euro. 2.4 The ECB also considers it important to stress that mandatory rounding legislation must not prevent the 1 and 2 euro cent coins from being accepted as a means of payment as they are de jure legal tender in the entire euro area. In this respect, Member States’ legislation must not lead to divergent treatment of euro legal tender. In this regard, the ECB understands that the provisions of

text: Article 17

text: a of the Law on Národná banka Slovenska will continue to require payees to accept 1 and 2 euro cent coins in cash payments even after the draft law introduces mandatory rounding. This means that 1 and 2 cent coins remain universally accepted legal tender in Slovakia. The ECB considers it crucial that 1 and 2 euro cent coins remain universally accepted legal tender for so long and insofar as they remain legal tender under Union law. 2.5 Finally, the ECB notes that the reduced use of 1 and 2 euro cent coins as a result of rounding would reduce resource consumption and be supportive of a more efficient use of cash. This is in

text: Council Regulation (EC) No 974/98 of 3 May 1998

text: on the introduction of the euro (OJ L 139, 11.5.1998, p. 1).

text: 4 See paragraph 2.1 of Opinion

text: . All ECB opinions are published on EUR-Lex.

text: 5 See

text: Recital 7

text: of

text: Regulation (EU) No 651/2012

text: of the European Parliament and of the Council of 4 July 2012 on the issuance of euro coins (OJ L 201, 27.7.2012, p. 135).

text: 6 See paragraph 2.4 of Opinion

text: and paragraph 2.4 of Opinion

text: 7 Zákon Národnej rady Slovenskej republiky č. 566/1992 Zb. o Národnej banke Slovenska. line with the goals of the Eurosystem’s Cash 2030 strategy to make the cash cycle as cost efficient as possible and to look at the environmental footprint of cash to identify opportunities to reduce its environmental impact. This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 20 April 2021. [signed] The President of the ECB Christine LAGARDE

text: 8 Available on the ECB’s website at https://www.ecb.europa.eu/euro/cash_strategy/html/index.en.html