In a ruling handed down on Wednesday 29 May (Case T-395/22), the General Court of the European Union ruled that the calculation of the ex ante contributions to the ‘Single Resolution Fund’ (SRF) for 2022 by the ‘Single Resolution Board’ (SRB) was unlawful.
Hypo Vorarlberg Bank has challenged before the General Court the legality of the decision (SRB/ES/2022/18) of the SRB, the European authority responsible for the resolution of large failing banks in the euro area, which sets the ex ante contributions for 2022 to the SRF applicable to it. According to the Austrian bank, this decision is unlawful because it is based on legal provisions which, in turn, are unlawful. In addition, the SRB is said to have exceeded an annual ceiling that it should have respected.
In its judgment, the General Court annulled the contested decision of the European authority insofar as it concerned the complainant.
According to the European Court, in order to calculate the ex ante contributions for 2022, the SRB applied an implementing regulation (2015/81) that is unlawful because it was adopted on an enabling legislative basis (Article 70 of Regulation 806/2014) that is also unlawful. That latter unlawfulness stems from the fact that the European legislature failed to comply with its obligation to state the reasons why it empowered the Council, rather than the Commission, to adopt the implementing act in question.
The General Court added that the Council had exceeded its implementing powers by altering the actual basis of the method of calculating ex ante contributions to the SRF provided for in the enabling legislative act. It only took into account national data instead of using data from authorised banking institutions in the EU.
Secondly, as found in a previous case (T-411/22 - see EUROPE 13388/33), the SRB failed to observe the requirement that the amount of the ex ante contributions due by all the authorised institutions does not exceed 12.5% of the forecast final target level.
Nevertheless, the General Court is maintaining the effects of the contested decision until the necessary measures have been taken to implement its judgment, which must occur within a reasonable period that cannot exceed 12 months from the date on which that judgment becomes final. The aim is to not deprive the SRF of the means necessary to ensure the stability of the euro area needed to guarantee financial stability in the event of the failure of a major bank within the banking union.
See the Court’s judgment: https://aeur.eu/f/cf7 (Original version in French by Mathieu Bion)