Brussels, 25/09/2014 (Agence Europe) - On Thursday 25 September, the European Commission opened infringement proceedings against Bulgaria for its incorrect transposition of a provision of the “DGS” directive on the national deposit guarantee systems.
The Bulgarian legislation does not allow the country's deposit guarantee system to pay out on claims by depositors against a given bank unless the Bulgarian central bank has withdrawn its banking accreditation from that bank. However, such a condition is not included in the directive, which stipulates that the unavailability of deposits is enough to activate the deposit guarantee system.
In the case which is the subject of the complaint, deposits made into the Corporate Commercial Bank and the Commercial Bank Victoria have been unavailable for the last three months and, according to the Bulgarian National Bank, no decisions will be made until the end of November (see EUROPE 11106). Given the “severe consequences” of the situation for households and companies alike, the Commission reports that it is in close contact with the Bulgarian authorities to assist them in finding an “adequate” solution. As EU law takes precedence over national law, it argues that individuals and businesses can enforce their rights under the “DGS” directive against the relevant bodies before a national court in order to have their savings repaid to them.
Additionally, the Commission takes the view that the conservatorship imposed by the Bulgarian authorities on the two banks in question appears to constitute a non-justified restriction to the free movement of capital. Corporate Commercial Bank and Commercial Bank Victoria, which are under conservatorship, have been obliged to fully suspend their payments and banking activities, even though domestic law allows less intrusive measures, such as a partial suspension of payments and limitation of certain activities. (MB)