Key facts of the case:

1. A financial crisis of the magnitude of that which started in 2007, and quickly spread globally after the collapse of Lehman Brothers in September 2008, is often defined as a ‘multidimensional event’, driven by several concomitant factors. Politicians and economists do not always share the same views on the deeper causes of such crises, but they mostly agree on the possible consequences flowing from them: collapse of financial institutions, drop in stock markets, failure of both large and small businesses, decline in consumer wealth and increase in unemployment.
2. It is generally accepted that, in order to combat a financial crisis, different forms of public intervention may be needed, in particular to ensure the stability of the financial markets. To that end, during the recent financial crisis, several States both in the European Union and in the rest of the world had recourse to a variety of ‘bail-in’ measures to restore the viability of banks.
3. The present case — the first reference for a preliminary ruling from the Ustavno sodišče (Constitutional Court) — concerns, in fact, ‘bail-in’ measures of the sort referred to in points 40 to 46 of the latest Banking Communication (3) (referred to as ‘burden-sharing measures’), issued by the Commission to provide a framework for the assessment of the compatibility of State aid to banks during the crisis. The referring court, in particular, seeks guidance from the Court on the validity and interpretation of the provisions of that communication, raising a number of important legal issues which I will address in this Opinion.

Results (sanctions) and key consequences of the case:

145. In conclusion, I propose that the Court answer the questions referred for a preliminary ruling by the Ustavno sodišče (Constitutional Court) as follows:

– the Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis (‘the Banking Communication’) is not binding on the Member States;

– points 40 to 46 of that communication do not exceed the competence devolved to the Commission under Articles 107 to 109 TFEU; the Commission does not misinterpret or misapply the State aid rules by considering that, in the situations governed by the Banking Communication, aid to banks in distress normally requires burden-sharing measures to be compatible with Article 107(3)(b) TFEU;

– points 40 to 46 of that communication are compatible with the principle of the protection of legitimate expectations and the right to property; it is for the national courts to verify that, when aid measures adopted in accordance with the Banking Communication are executed, those rights have not been infringed;

– points 40 to 46 of the Banking Communication do not infringe the provisions of Directive 2012/30/EU of the European Parliament and of the Council of 25 October 2012; national provisions which entrust the adoption of the burden-sharing measures to the national central bank in a situation such as that at issue in the main proceedings are not incompatible with Directive 2012/30/EU;

– conversion or writing down of hybrid capital and subordinated debt instruments, provided for in points 40 to 46 of the Banking Communication, is not an essential precondition for the granting of State aid and is not required when it would lead to disproportionate results; it is for the national courts to verify that, when aid measures adopted in accordance with the Banking Communication are executed, the principle of proportionality has been observed;

– the burden-sharing measures referred to in points 40 to 46 of that communication may, depending on the circumstances, fall within the definition of reorganisation measures in Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001.