Case T868/16

(Publication in extract form)

QI and Others

v

European Commission

and

European Central Bank

 Judgment of the General Court (Third Chamber), 9 February 2022

(Non-contractual liability – Economic and monetary policy – Restructuring of Greek public debt – Bond exchange agreement for the sole benefit of the Eurosystem central banks – Private sector involvement – Collective action clauses – Private creditors – Official sector creditors – Attributability – Sufficiently serious infringement of a rule of law conferring rights on individuals – Article 63(1) TFEU – Articles 120 to 127 and Article 352(1) TFEU – Right to property – Equal treatment )

1.      Actions for damages – Subject matter – Application seeking compensation for damage caused by Eurogroup or by the Heads of State or Government of the euro area – Informality of intergovernmental bodies – No competence of its own – Not a body, office or agency of the EU – Inadmissibility

(Arts 13(1) and 16(6) TEU; Arts 137, 268 and 340, second paragraph, TFEU; Protocol (No 14) annexed to the EU and FEU Treaties; Art. 1 of Council Decision 2009/937)

(see paragraphs 72-77, 86)

2.      Actions for damages – Subject matter – Application seeking compensation for damage caused by the measures or conduct of institutions, bodies, offices or agencies of the European Union adopted following intergovernmental or political agreements with the participation of the European Central Bank (ECB), the Commission and the Eurogroup – Failure on the part of the Commission to check that certain political agreements concluded within the Eurogroup were in conformity with EU law – Admissibility – Not binding in nature – Irrelevant

(Arts 13(1), 15 and 17(1) TEU; Arts 268 and 340, second paragraph, TFEU)

(see paragraphs 78-81, 83, 84)

3.      Economic and monetary policy – Monetary policy – Implementation – Opinion addressed to national authorities by the European Central Bank (ECB) on draft legislative provisions within its field of competence – Binding nature – None

(Arts 127(4) and 282(5) TFEU; Protocol (No 14) annexed to the EU and FEU Treaties, Art. 1; Protocol on the Statute of the European System of Central Banks and of the European Central Bank, Art. 18; Council Decision 98/415)

(see paragraph 82)

4.      Non-contractual liability – Conditions – Unlawfulness – Sufficiently serious infringement of a rule of law conferring rights on individuals – Rule of law conferring rights on individuals – Concept – Provisions concerning the definition and implementation of EU economic and monetary policy – Obligation on Member States to avoid excessive public deficits – Objective of maintaining the economic and financial stability of the European Union – Exclusion

(Arts 120 to 127, 282(2), 340, second paragraph, and 352(1) TFEU; Council Regulation No 3603/93, Recital 7)

(see paragraphs 90-100, 104, 105)

5.      Non-contractual liability – Conditions – Unlawfulness – Sufficiently serious infringement of EU law – Requirement that the institutions manifestly and seriously disregard the limits of their discretion – Assessment concerning the measures adopted by the European Central Bank (ECB) in the exercise of its competence in monetary policy matters

(Arts 120 to 127 and 282(2) TFEU; Protocol on the Statute of the European System of Central Banks and of the European Central Bank, Art. 18)

(see paragraphs 102, 103)

6.      Non-contractual liability – Conditions – Unlawfulness – Sufficiently serious infringement of a rule of law conferring rights on individuals – Rule of law conferring rights on individuals – Concept – Right to property – Included

(Art. 13(1) TEU; Art 340, second and third paragraphs, TFEU; Charter of Fundamental Rights of the European Union, Arts 17(1) and 51)

(see paragraphs 115-118)

7.      EU law – Principles – Fundamental rights – Right to property – Restrictions – Whether permissible – Conditions

(European Union Charter of Fundamental Rights, Arts 17(1) and 52(1))

(see paragraphs 119, 120)

8.      Economic and monetary policy – Monetary policy – Implementation – Opinion addressed to national authorities by the European Central Bank (ECB) on draft legislative provisions within its field of competence – Adoption by a Member State of a law limiting the value of certain bonds with the aim of protecting the national economy and the euro area against the risk of the default of the Member State concerned – Exclusion of the Eurosystem’s involvement in the restructuring of the public debt of that State – Disproportionate restriction on the right to property – None

(Arts 123 and 127(4) TFEU; Charter of Fundamental Rights of the European Union, Art. 17(1); Protocol on the Statute of the European System of Central Banks and of the European Central Bank, Art. 18)

(see paragraphs 125, 127-136)

9.      Free movement of capital – Restrictions on the movements of capital – National legislation limiting the value of bonds issued or guaranteed by the Member State concerned – Justification based on the need to protect the national economy and the euro area against the risk of that Member State’s insolvency – Whether permissible

(Art. 63 TFEU)

(see paragraphs 142-146)

10.    Economic and monetary policy – Monetary policy – Implementation – Restructuring of Greek public debt by a programme of buying State bonds – Conclusion of a bond exchange agreement solely for the benefit of central banks of the Eurosystem – Exclusion of the involvement of the central banks of the Eurosystem as holders of such bonds – Breach of the principle of equal treatment – None

(Arts 127(1) and (2) and 282(1) TFEU; Protocol on the Statute of the European System of Central Banks and of the European Central Bank, Art. 18; Decision 2010/281 of the European Central Bank)

(see paragraphs 168-172)

11.    Economic and monetary policy – Monetary policy – Scope – Programme for the purchase of State bonds on the secondary bond market by the European System of Central Banks – Included – Programme generating favourable consequences for the realisation of economic policy objectives – Irrelevant

(Arts 119(2), 123(1), 127(1) and (2) and 282(1) and (2) TFEU; Protocol on the Statute of the European System of Central Banks and of the European Central Bank, Art. 18)

(see paragraphs 173-179)

12.    Economic and monetary policy – Monetary policy – Implementation – Restructuring of Greek public debt by a programme of buying State bonds – Conclusion of a bond exchange agreement solely for the benefit of central banks of the Eurosystem – Exclusion of the involvement of the European Investment Bank (EIB) and the Commission as holders of such bonds – Breach of the principle of equal treatment – None

(Arts 309, 317, 321, second paragraph, 322(1)(a) and 340, second paragraph, TFEU; Protocol (No 5) annexed to the EU and FEU Treaties, Arts 18(1), 21(1) to (3) and 26(2); Council Regulations No 1605/2002 and No 480/2009)

(see paragraphs 180-186)


Résumé

In their application seeking compensation for the damage they allegedly suffered as a result of the implementation of a mandatory exchange of State bonds in the context of the restructuring of the Greek public debt in 2012, QI and the other applicants (‘the applicants’) claimed that the European Union and the European Central Bank (ECB) were liable.

On 2 February 2012, the Hellenic Republic submitted to the ECB a request for an opinion (1) on a draft law introducing rules amending the terms applicable to marketable securities issued or guaranteed by the Greek State under agreements with their holders for the purpose of restructuring Greek public debt, based, in particular, on the application of ‘collective action clauses’ (‘the CACs’).

On 23 February 2012, after having received a positive opinion from the ECB, (2) the Greek Parliament adopted Law No 4050/2012 (3) on the amendment of bonds issued or guaranteed by the Greek State with the consent of their holders and introducing the CACs mechanism. Under that mechanism, the proposed amendments to the bonds concerned would become legally binding on any holders of bonds governed by Greek law issued before 31 December 2011, as identified in the act of the Greek Ministerial Council approving invitations to Private Sector Involvement (PSI), if the proposed amendments were approved by a quorum of bondholders representing at least two thirds by face value of those bonds. Since the quorum and the majority required for the planned bond exchange to go ahead were reached, all holders of Greek bonds, including those who opposed the exchange, had their bonds exchanged pursuant to that law, with the result that the value of those bonds fell.

After refusing the offer to exchange their bonds, the applicants, as holders of Greek bonds, were involved in the restructuring of Greek public debt, under the PSI and the CACs implemented pursuant to Law No 4050/2012. By their action, the applicants claimed that the European Union or the ECB were liable for the damage the applicants allegedly suffered as a result, first, of their forced involvement in that restructuring and, second, of the absence of involvement by the Eurosystem and the Hellenic Republic’s official sector creditors in that restructuring.

The General Court dismisses the action for damages brought by the applicants in its entirety.

Findings of the Court

In the first place, the Court declares that it has no jurisdiction to rule on the lawfulness of the measures, conduct or failures to act of the Eurogroup and the Heads of State or Government of the euro area, emphasising, with regard to the Eurogroup statements of 20 June 2011 and 21 February 2012, that the Eurogroup was created as an intergovernmental body, outside the institutional framework of the European Union, which cannot be treated as a configuration of the Council, or be classified as a body, office or agency of the European Union. The Court notes that, because of the intergovernmental nature, those findings apply mutatis mutandis to the joint statement by the Heads of State or Government of the euro area at their summit of 26 October 2011. Accordingly, those statements cannot be treated as an EU measure or as a measure attributable to it.

The Court notes, on the other hand, that the conclusions of the European Council of 23 and 24 June 2011 and the ECB’s opinion of 17 February 2012, although non-binding in nature in the sense of obliging the Hellenic Republic to implement the contested measures, are capable of giving rise to non-contractual liability on the part of the European Union or the ECB under the second and third paragraphs of Article 340 TFEU. As regards the potential liability of the European Union for breach of the European Commission’s duty to oversee under Article 17(1) TEU, the Court notes that that institution retains, in the context of its participation in the activities of the Eurogroup, its role as guardian of the Treaties. It follows that any failure on its part to check that the political agreements concluded within the Eurogroup are in conformity with EU law is liable to result in non-contractual liability of the European Union being invoked under the second paragraph of Article 340 TFEU. In the second place, the Court finds that the ECB’s conduct to which the applicants take exception, in particular the conclusion and implementation of the exchange agreement of 15 February 2012 with the aim of avoiding the application of the CACs to Greek bonds held by the Eurosystem central banks, formed part of the exercise of the powers and basic tasks conferred on it for the purposes of defining and implementing the EU monetary policy. In that regard, the Court notes that none of the provisions relied on by the applicants under Articles 120 to 127, Article 282(2) and Article 352(1) TFEU in support of the complaint alleging that the institutions acted ultra vires confers on them specific rights the infringement of which is such as to give rise to non-contractual liability on the part of either the European Union or the ECB.

In the third place, the Court rejects the argument alleging a sufficiently serious breach of the right to property guaranteed by Article 17(1) of the Charter of Fundamental Rights of the European Union (‘the Charter’), finding that, although the adoption and implementation of Law No 4050/2012 gave rise to an interference with the applicants’ right to property, that law met general interest objectives, including that of ensuring the stability of the banking system of the euro area as a whole. Furthermore, according to the Court, given the nature of the property title in question, the scale and severe and virulent nature of the Greek public debt crisis, the endorsement by the Greek State and by the majority of holders of Greek bonds of an exchange incorporating devaluation of those bonds, and the magnitude of the losses sustained, neither the reduction in the value of the Greek bonds at issue implemented by the contested measures, nor the exclusion of Eurosystem involvement in the restructuring of Greek public debt constituted, in the light of the aim pursued, a disproportionate and intolerable interference which would undermine the very substance of the applicants’ right to property under that provision of the Charter.

In the fourth place, as regards the argument alleging a sufficiently serious breach of the applicants’ rights under Article 63(1) TFEU, which prohibits all restrictions on the movement of capital between Member States and between Member States and third countries, the Court finds that the applicants have not established that the contested measures and the exclusion of Eurosystem involvement in the restructuring of the Greek public debt were disproportionate. Those measures served to restore the stability of the banking system of the euro area as a whole and it has not been demonstrated that they went beyond what was necessary to restore that stability.

In the fifth and last place, the Court rejects the argument alleging a sufficiently serious breach of the right to equal treatment laid down in Article 20 of the Charter, stating that, in the light of the objective of the contested measures, namely that of ensuring the restructuring of the Greek public debt in order to make it viable, the applicants failed to establish to the requisite legal standard that they were in a situation different from that of other private holders of Greek bonds, including institutional or professional investors. For the purposes of that objective, those persons were, a priori, in identical or comparable situations, given that they had acquired Greek bonds solely in their private pecuniary interest, or even for profit or speculative purposes, and given that they had accepted the associated risk of loss while being aware of the financial crisis that the Hellenic Republic was facing at that time. Furthermore, according to the Court, the applicants are not justified in claiming that the private holders who invested in Greek bonds solely in their private pecuniary interests were in a situation comparable to that of the Eurosystem, including the ECB, the European Investment Bank and European Union, as holders of Greek bonds for the sole purpose of implementing their policies and tasks in the public interest.


1      Pursuant to Article 127(4) TFEU, read in conjunction with Article 282(5) TFEU.


2      Opinion of the ECB of 17 February 2012 on the terms of securities issued or guaranteed by the Greek State (CON/2012/12).


3      Nomos 4050/2012, Kanones tropopoiiseos titlon, ekdoseos i engyiseos tou Ellinikou Dimosiou me symfonia ton Omologiouchon of 23 February 2012 (FEK A’ 36, p. 1075; ‘Law No 4050/2012’).