Δικαστική απόφαση-σταθμός: Δεν θα πληρώσουν οι λαοί τις τράπεζες.
Του Ερίκ Τουσέν
Με ικανοποίηση χαιρετίζουμε την απόφαση του δικαστηρίου της ΕΖΕΣ (Ευρωπαϊκή Ζώνη Ελεύθερων Συναλλαγών), η οποία απορρίπτει όλες τις καταγγελίες που κατατέθηκαν από τις Κάτω Χώρες και το Ηνωμένο Βασίλειο κατά της Ισλανδίας στην υπόθεση «Icesave» | 1 |, σημειώνει σε άρθρο του ο Ερίκ Τουσέν, της οργάνωσης CADTM, (Επιτροπή για την κατάργηση του χρέους του Τρίτου Κόσμου)
Η απόφαση καθιστά σαφές ότι δεν είναι ευθύνη της χώρας στην οποία μια τραπεζική εταιρεία έχει την έδρα της να καλύπτει τα έξοδα των εγγυήσεων του τραπεζικού της συστήματος, καθώς και ότι ο μηχανισμός του δίχτυ ασφαλείας πρέπει να χρηματοδοτείται από τις ίδιες τις τράπεζες.
Αυτό επιβεβαιώνει εμμέσως ότι η διαδικασία της κανονικής εκκαθάρισης, όπως αυτή εφαρμόστηκε στη περίπτωση της «Landsbanki» (μητρική της Icesave) είναι τελείως ορθή, όταν μια τράπεζα, ακόμα και χαρακτηρισμένη ως «TBTF» (too big to fail, πολύ μεγάλη για να πέσει ), έχει περισσότερα χρέη από τα περιουσιακά στοιχεία της.
Όμοια πρέπει να είναι η περίπτωση των περισσότερων μεγάλων ευρωπαϊκών τραπεζών, αν τα τοξικά στοιχεία ενεργητικού στους ισολογισμούς τους καταγράφονταν στην πραγματική τους αξία.
Είναι το αντίθετο από αυτό που έχει καθιερωθεί, από το 2007 και την αρχή των επαναλαμβανόμενων χρηματοπιστωτικών κρίσεων, για να σωθούν οι μεγαλομέτοχοι των τραπεζών με τις πλάτες της κοινότητας.
Οι κυβερνήσεις των βιομηχανικών χωρών έδωσαν την εγγύηση τους προς τις τράπεζες στο χείλος της χρεοκοπίας των χωρών τους, χωρίς αιτιολόγηση, χρησιμοποιώντας δημόσια κονδύλια για τη διευκόλυνση των ταμειακών ροών των τραπεζών.
Την ίδια στιγμή, οι κυβερνώντες άρχισαν να σφυρηλατήσουν την ιδέα ότι το φταίξιμο άνηκε στο πληθυσμό. Αυτή η εκστρατεία είχε και έχει ως στόχο να πείσει τους πολίτες ότι πρέπει να αποδέχονται τις μειώσεις στους μισθούς τους, την υποβάθμιση της κοινωνικής κάλυψης, την αύξηση της ανασφάλειας και την επιδείνωση των συνθηκών εργασίας.
Οι λαοί δεν ευθύνονται και δεν συμφωνούν με τα μέτρα λιτότητας που τους επιβάλλονται.
Η απόφαση αυτή αποδεικνύει τη νομιμότητα της γνώμης των λαών και ως εκ τούτου αποδείχνει τον μη νομιμοποιημένο χαρακτήρα αυτών των μέτρων λιτότητας.
Το ευρωπαϊκό τραπεζικό σύστημα εξακολουθεί να κρατά την αναπνοή του, περιμένοντας την ημέρα που τα τοξικά στοιχεία του ενεργητικού του θα ωριμάσουν και δεν θα μπορεί πλέον να κρυφτούν.
Τότε, θα ζητηθεί (ή μάλλον διαταχθεί) από τον πληθυσμό να το διασώσει και πάλι.
Οι κυβερνήσεις, μέσω των δομών που έχουν εφαρμοστεί έκτοτε, θα αναζητήσουν από τις χρηματοπιστωτικές αγορές να δανειστούν τα ίδια τα δικά τους χρήματά και να τα δώσουν πίσω στις τράπεζες που κατέχουν τα τοξικά στοιχεία ενεργητικού.
Με την απόφαση της ΕΖΕΣ, γνωρίζουμε τώρα ότι δεν είναι οι λαοί (Ελληνικός, Ιρλανδικός, Πορτογαλικός ή άλλοι) που πρέπει να πληρώσουν και ότι η προθυμία των κυβερνήσεων να πράξουν με τον τρόπο που πράττουν αποδείχνει τη συνενοχή τους με τις τράπεζες.
Οι οικονομικές κρίσεις θα συνεχιστούν, εκτός εάν οι τράπεζες απαλλοτριωθούν χωρίς αποζημίωση, κοινωνικοποιηθούν με λαϊκό και δημοκρατικό έλεγχο και τίθενται στην υπηρεσία των αναγκών του πληθυσμού παρά των χρηματοπιστωτικών αγορών.
Είναι επίσης απαραίτητο να εντοπιστούν μέσω του λογιστικού ελέγχου του δημόσιου χρέους όλα τα παράνομα η μη-νομημοποιμένα χρέη, συμπεριλαμβανομένων εκείνων που προέρχονται από την διάσωση των τραπεζών, για να ακυρωθούν.
Η ΑΠΟΦΑΣΗ ΤΟΥ ΔΙΚΑΣΤΗΡΙΟΥ ΤΗΣ ΕΖΕΣ, 28.01.2013
JUDGMENT OF THE COURT
28 January 2013
(Directive 94/19/EC on deposit-guarantee schemes – Obligation of result –
Emanation of the State – Discrimination)
In Case E-16/11,
EFTA Surveillance Authority, represented by Xavier Lewis, Director, and
Gjermund Mathisen, Officer, Department of Legal & Executive Affairs, acting as
supported by the
European Commission, represented by its Agents Enrico Traversa, Albert
Nijenhuis and Karl-Philipp Wojcik,
Iceland, represented by Kristján Andri Stefánsson, Agent, Tim Ward QC, Lead
counsel, Jóhannes Karl Sveinsson, Co-counsel,
APPLICATION for a declaration that by failing to ensure payment of the
minimum amount of compensation to Icesave depositors in the Netherlands and
in the United Kingdom provided for in Article 7(1) of the Act referred to at point
19a of Annex IX to the Agreement on the European Economic Area (Directive
94/19/EC of the European Parliament and of the Council of 30 May 1994 on
deposit-guarantee schemes) within the time limits laid down in Article 10 of the
Act, Iceland has failed to comply with the obligations resulting from that Act, in
particular its Articles 3, 4, 7 and 10, and/or Article 4 of the Agreement on the
European Economic Area.
– 2 –
composed of: Carl Baudenbacher, President and Judge Rapporteur, Páll Hreinsson,
and Ola Mestad (ad hoc), Judges,
Registrar: Gunnar Selvik,
- having regard to the written pleadings of the parties and the intervener and
the written observations of the Principality of Liechtenstein, represented by
Dr Andrea Entner-Koch, Director of the EEA Coordination Unit, and by
Frederique Lambrecht, Legal Officer at the EEA Coordination Unit, acting
- the Kingdom of the Netherlands, represented by Corinna Wissels, Mielle
Bulterman and Charlotte Schillemans, Head and members of the European
Law Division of the Legal Affairs Department of the Ministry of Foreign
Affairs, acting as Agents;
- the Kingdom of Norway, represented by Kaja Moe Winther, Senior Adviser,
Ministry of Foreign Affairs, and Torje Sunde, advokat, Office of the
Attorney General (Civil Affairs), acting as Agents;
- the United Kingdom of Great Britain and Northern Ireland, represented by
Heather Walker of the Treasury Solicitor’s Department, acting as Agent, and
Mark Hoskins QC,
having regard to the Report for the Hearing,
having heard oral argument of the applicant, represented by its Agents Xavier
Lewis and Gjermund Mathisen; the defendant, represented by its Agent Kristján
Andri Stefánsson, Lead counsel Tim Ward QC, and Co-counsel and Supreme
Court Attorney Jóhannes Karl Sveinsson, assisted by Professor Miguel Poiares
Maduro, State Attorney General Einar Karl Hallvarðsson, Supreme Court
Attorney Reimar Pétursson, Dóra Guðmundsdóttir, Kristín Haraldsdóttir and
Þóra M. Hjaltested, advisers; the intervener, represented by its Agents Enrico
Traversa and Albert Nijenhuis; Liechtenstein, represented by its Agent Dr Andrea
Entner-Koch; the Netherlands, represented by its Agents Corinna Wissels and
Charlotte Schillemans, and Gerald Enting, Ministry of Finance, and Sander
Timmerman, Netherlands Central Bank; Norway, represented by its Agents Kaja
Moe Winther, Senior Adviser, and Kristin Nordland Hansen, Higher Executive
Officer, Ministry of Foreign Affairs; the United Kingdom, represented by its
Agent Heather Walker, and Mark Hoskins QC; at the hearing on 18 September
gives the following
– 3 –
I Legal context
1 Article 4 EEA provides:
Within the scope of application of this Agreement, and without prejudice to any
special provisions contained therein, any discrimination on grounds of
nationality shall be prohibited.
2 The Act referred to at point 19a of Annex IX to the EEA Agreement (Directive
94/19/EC of the European Parliament and of the Council of 30 May 1994 on
deposit-guarantee schemes, OJ 1994 L 135, p. 5), as amended, provides for
minimum harmonised rules as regards deposit-guarantee schemes.
3 Recital 1 in the preamble to Directive 94/19 reads:
Whereas, in accordance with the objectives of the Treaty, the harmonious
development of the activities of credit institutions throughout the Community
should be promoted through the elimination of all restrictions on the right of
establishment and the freedom to provide services, while increasing the stability
of the banking system and protection for savers;
4 Recital 2 in the preamble to Directive 94/19 reads:
Whereas, when restrictions on the activities of credit institutions are eliminated,
consideration should be given to the situation which might arise if deposits in a
credit institution that has branches in other Member States become unavailable;
whereas it is indispensable to ensure a harmonized minimum level of deposit
protection wherever deposits are located in the Community; whereas such
deposit protection is as essential as the prudential rules for the completion of the
single banking market;
5 Recital 3 in the preamble to Directive 94/19 reads:
Whereas in the event of the closure of an insolvent credit institution the
depositors at any branches situated in a Member State other than that in which
the credit institution has its head office must be protected by the same guarantee
scheme as the institution's other depositors;
6 Recital 4 in the preamble to Directive 94/19 reads:
Whereas the cost to credit institutions of participating in a guarantee scheme
bears no relation to the cost that would result from a massive withdrawal of
bank deposits not only from a credit institution in difficulties but also from
– 4 –
healthy institutions following a loss of depositor confidence in the soundness of
the banking system;
7 Recital 7 in the preamble to Directive 94/19 reads:
Whereas a branch no longer requires authorization in any host Member State,
because the single authorization is valid throughout the Community, and its
solvency will be monitored by the competent authorities of its home Member
State; whereas that situation justifies covering all the branches of the same
credit institution set up in the Community by means of a single guarantee
scheme; whereas that scheme can only be that which exists for that category of
institution in the State in which that institution's head office is situated, in
particular because of the link which exists between the supervision of a branch’s
solvency and its membership of a deposit-guarantee scheme;
8 Recital 16 in the preamble to Directive 94/19 reads:
Whereas, on the one hand, the minimum guarantee level prescribed in this
Directive should not leave too great a proportion of deposits without protection
in the interest both of consumer protection and of the stability of the financial
system; whereas, on the other hand, it would not be appropriate to impose
throughout the Community a level of protection which might in certain cases
have the effect of encouraging the unsound management of credit institutions;
whereas the cost of funding schemes should be taken into account; whereas it
would appear reasonable to set the harmonized minimum guarantee level at
ECU 20 000; whereas limited transitional arrangements might be necessary to
enable schemes to comply with that figure;
9 Recital 23 in the preamble to Directive 94/10 reads:
Whereas it is not indispensable, in this Directive, to harmonize the methods of
financing schemes guaranteeing deposits or credit institutions themselves, given,
on the one hand, that the cost of financing such schemes must be borne, in
principle, by credit institutions themselves and, on the other hand, that the
financing capacity of such schemes must be in proportion to their liabilities;
whereas this must not, however, jeopardize the stability of the banking system of
the Member State concerned;
10 Recital 24 in the preamble to Directive 94/19 reads:
Whereas this Directive may not result in the Member States’ or their competent
authorities’ being made liable in respect of depositors if they have ensured that
one or more schemes guaranteeing deposits or credit institutions themselves and
ensuring the compensation or protection of depositors under the conditions
prescribed in this Directive have been introduced and officially recognized;
11 Recital 25 in the preamble to Directive 94/19 reads:
Whereas deposit protection is an essential element in the completion of the
internal market and an indispensable supplement to the system of supervision of
– 5 –
credit institutions on account of the solidarity it creates amongst all the
institutions in a given financial market in the event of the failure of any of them,
12 Article 1 of Directive 94/19 reads:
1. “deposit” shall mean any credit balance which results from funds left in an
account or from temporary situations deriving from normal banking
transactions and which a credit institution must repay under the legal and
contractual conditions applicable, and any debt evidenced by a certificate issued
by a credit institution.
3. “unavailable deposit” shall mean a deposit that is due and payable but has
not been paid by a credit institution under the legal and contractual conditions
applicable thereto, where either:
(i) the relevant competent authorities have determined that in their view the
credit institution concerned appears to be unable for the time being, for reasons
which are directly related to its financial circumstances, to repay the deposit
and to have no current prospect of being able to do so.
The competent authorities shall make that determination as soon as possible and
at the latest 21 days after first becoming satisfied that a credit institution has
failed to repay deposits which are due and payable;
(ii) a judicial authority has made a ruling for reasons which are directly related
to the credit institution's financial circumstances which has the effect of
suspending depositors' ability to make claims against it, should that occur
before the aforementioned determination has been made;
4. “credit institution” shall mean an undertaking the business of which is to
receive deposits or other repayable funds from the public and to grant credits
for its own account;
5. “branch” shall mean a place of business which forms a legally dependent
part of a credit institution and which conducts directly all or some of the
operations inherent in the business of credit institutions; any number of
branches set up in the same Member State by a credit institution which has its
head office in another Member State shall be regarded as a single branch.
13 Article 3 of Directive 94/19 reads:
1. Each Member State shall ensure that within its territory one or more depositguarantee
schemes are introduced and officially recognized. ...
14 Article 4 of Directive 94/19 reads:
1. Deposit-guarantee schemes introduced and officially recognized in a Member
State in accordance with Article 3(1) shall cover the depositors at branches set
up by credit institutions in other Member States. ...
– 6 –
15 Article 7 of Directive 94/19 reads:
1. Deposit-guarantee schemes shall stipulate that the aggregate deposits of each
depositor must be covered up to ECU 20 000 in the event of deposits’ being
6. Member States shall ensure that the depositor’s rights to compensation may
be the subject of an action by the depositor against the deposit-guarantee
16 Article 8 of Directive 94/19 reads:
1. The limits referred to in Article 7(1), (3) and (4) shall apply to the aggregate
deposits placed with the same credit institution irrespective of the number of
deposits, the currency and the location within the Community.
17 Article 9 of Directive 94/19 reads:
1. Member States shall ensure that credit institutions make available to actual
and intending depositors the information necessary for the identification of the
deposit-guarantee scheme of which the institution and its branches are members
within the Community or any alternative arrangement provided for in Article
3(1), second subparagraph, or Article 3(4). The depositors shall be informed of
the provisions of the deposit-guarantee scheme or any alternative arrangement
applicable, including the amount and scope of the cover offered by the
guarantee scheme. That information shall be made available in a readily
Information shall also be given on request on the conditions for compensation
and the formalities which must be completed to obtain compensation.
2. The information provided for in paragraph 1 shall be made available in the
manner prescribed by national law in the official language or languages of the
Member State in which the branch is established.
3. Member States shall establish rules limiting the use in advertising of the
information referred to in paragraph 1 in order to prevent such use from
affecting the stability of the banking system or depositor confidence. In
particular, Member States may restrict such advertising to a factual reference to
the scheme to which a credit institution belongs.
18 Article 10 of Directive 94/19 reads:
1. Deposit-guarantee schemes shall be in a position to pay duly verified claims
by depositors in respect of unavailable deposits within three months of the date
on which the competent authorities make the determination described in Article
1(3)(i) or the judicial authority makes the ruling described in Article 1(3)(ii).
– 7 –
2. In wholly exceptional circumstances and in special cases a guarantee scheme
may apply to the competent authorities for an extension of the time limit. No
such extension shall exceed three months. The competent authorities may, at the
request of the guarantee scheme, grant no more than two further extensions,
neither of which shall exceed three months.
19 Directive 94/19 was implemented into Icelandic law by Act No 98/1999 on a
Deposit Guarantee and Investor Compensation Scheme (lög um
innstæðutryggingar og tryggingakerfi fyrir fjárfesta).
20 Article 1 of Act No 98/1999 reads:
The objective of this Act is to guarantee a minimum level of protection to
depositors in commercial banks and savings banks, and to customers of
companies engaging in securities trading pursuant to law, in the event of
difficulties of a given company in meeting its obligations to its customers
according to the provisions of this Act.
21 Article 2 of Act No 98/1999 reads:
Guarantees under this Act are entrusted to a special institute named the
Depositors’ and Investors’ Guarantee Fund, hereinafter referred to as the
“Fund”. The Fund is a private foundation operating in two independent
departments, the Deposit Department and the Securities Department, with
separate finances and accounting, cf. however the provisions of Article 12.
22 Article 3 of Act No 98/1999 reads:
Commercial banks, savings banks, companies providing investment services,
and other parties engaging in securities trading pursuant to law and established
in Iceland shall be members of the Fund. The same shall apply to any branches
of such parties within the European Economic Area within the States parties to
the EFTA Convention or in the Faroe Islands. Such parties, hereinafter referred
to as Member Companies, shall not be liable for any commitments entered into
by the Fund beyond their statutory contributions to the Fund, cf. the provisions
of Articles 6 and 7. The Financial Supervisory Authority shall maintain a record
of Member Companies.
23 Article 6 of Act No 98/1999 reads:
The total assets of the Deposit Department of the Fund shall amount to a
minimum of 1% of the average amount of guaranteed deposits in commercial
banks and savings banks during the preceding year.
– 8 –
24 Article 9 of Act No 98/1999 reads:
If, in the opinion of the Financial Supervisory Authority, a Member Company is
unable to render payment of the amount of deposits, securities or cash upon a
customer’s demand for refunding or return thereof in accordance with
applicable terms, the Fund shall pay to the customer of the Member Company
the amount of his deposit from the Deposit Department and the value of his
securities and cash in connection with securities trading from the Securities
Department. The obligation of the Fund to render payment also takes effect if
the estate of a Member Company is subjected to bankruptcy proceedings in
accordance with the Act on Commercial Banks and Savings Banks and the Act
on Securities Trading.
The opinion of the Financial Supervisory Authority shall have been made
available no later than three weeks after the Authority first obtains confirmation
that the relevant Member Company has not rendered payment to its customer or
accounted for his securities in accordance with its obligations. …
Further specifications regarding payments from the Fund shall be included in a
25 Article 10 of Act No 98/1999 reads:
In the event that the assets of either department of the Fund are insufficient to
pay the total amount of guaranteed deposits, securities and cash in the Member
Companies concerned, payments from each Department [i.e. the Fund’s
deposits department and the Fund’s securities department] shall be divided
among the claimants as follows: each claim up to ISK 1.7 million shall be paid
in full, and any amount in excess of that shall be paid in equal proportions
depending on the extent of each Department’s assets. This amount shall be
linked to the EUR exchange rate of 5 January 1999. No further claims can be
made against the Fund at a later stage even if losses suffered by the claimants
have not been compensated in full. Should the total assets of the Fund prove
insufficient, the Board of Directors may, if it sees compelling reasons to do so,
take out a loan in order to compensate losses suffered by claimants.
In the event that payment is effected from the Fund, the claims made on the
relevant Member Company or bankruptcy estate will be taken over by the Fund.
26 On 1 January 2000, Iceland implemented Directive 94/19 (hereinafter “the
Directive”) through the enactment of Act No 98/1999 on a Deposit Guarantee
and Investor Compensation Scheme. Act No 98/1999 set up the Depositors’ and
Investors’ Guarantee Fund which started operating on the same day.
27 In October 2006, Landsbanki Íslands hf (hereinafter “Landsbanki”) launched a
branch in the United Kingdom which provided online savings accounts under the
brand name “Icesave”. A similar Icesave online deposit branch was launched in
the Netherlands which began accepting deposits in Amsterdam on 29 May 2008.
– 9 –
The Icesave accounts drew in substantial deposits both from private and public
28 As a part of a worldwide financial crisis, there was a run on Icesave accounts in
the United Kingdom from February to April 2008.
29 In accordance with the division of responsibility laid down under the Directive,
deposits at the British and Netherlands branches of Landsbanki were under the
responsibility of Iceland’s Depositors’ and Investors’ Guarantee Fund
(hereinafter “TIF”), which offered a minimum guarantee of ISK 1 700 000 per
depositor pursuant to Article 10 of Act No 98/1999. Iceland did not make use of
the option provided for in Article 7(2) of the Directive to exclude certain
categories of depositors from the guarantee scheme.
30 From May 2008, Landsbanki opted to take part in the Netherlands depositguarantee
scheme to supplement its home scheme. At that time, the minimum
amount guaranteed under the Netherlands scheme was EUR 40 000 per depositor
which was later raised to EUR 100 000 per depositor. Similarly, the Landsbanki
branch in the United Kingdom joined the UK deposit-guarantee scheme for
additional coverage. Deposits at the British branch of Landsbanki in excess of the
minimum amount guaranteed by the Icelandic TIF were later guaranteed by the
UK scheme to a maximum of GBP 50 000 for each retail depositor.
31 On 3 October 2008, the UK’s Financial Supervisory Authority issued a
Supervisory Notice which required Landsbanki to take certain actions with
regard to its London branch. The practical effect was to freeze the assets of the
32 On 6 October 2008, Landsbanki’s Icesave websites in the Netherlands and in the
United Kingdom ceased to work and depositors at those branches lost access to
33 On the same day, Althingi, the Icelandic Parliament, adopted Emergency Act No
125/2008. The Emergency Act provided for the creation of new banks and the
granting of priority status in the bankruptcy to depositors with claims upon the
34 On 7 October 2008, Landsbanki collapsed and the Icelandic Financial
Supervisory Authority (“Fjármálaeftirlitið”, hereinafter “FME”) assumed the
powers of the meeting of Landsbanki’s shareholders and immediately suspended
the bank’s board of directors. The FME appointed a winding-up committee
which, with immediate effect, assumed the full authority of the board.
35 On the same day, the Netherlands Central Bank submitted a petition to the
District Court of Amsterdam asking for a ruling that certain emergency
regulations of Netherlands law applied.
– 10 –
36 Between 6 and 9 October 2008, the Icelandic Minister of Finance established
new banks under the Emergency Act.
37 On 8 October 2008, the UK Government took action under its Anti-Terrorism,
Crime and Security Act of 2001 to formally freeze the assets of Landsbanki, and
initially also funds relating to Landsbanki owned, held or controlled by the FME
and the Central Bank of Iceland (hereinafter “CBI”) in the UK.
38 Between 9 and 22 October 2008, domestic deposits in Landsbanki were
transferred to the new bank “New Landsbanki” which was established by the
Icelandic Government. The transfer was based on a decision of the FME of 9
October 2008 that exercised its powers under the Emergency Act to achieve a
restructuring of the Icelandic banks.
39 On 13 October 2008, at the request of the Netherlands Central Bank, the District
Court of Amsterdam declared certain emergency regulations of Netherlands law
applicable and appointed administrators to handle the affairs of the branch,
including all assets and dealings with customers of the branch.
40 On 27 October 2008 and thereafter, the FME made statements that triggered an
obligation for the TIF to make payments in accordance with Article 9 of Act No
98/1999 on a Deposit Guarantee and Investor Compensation Scheme to
customers of Landsbanki’s branches in the UK and the Netherlands. The original
three-month time limit for payments was extended in accordance with Article
10(2) of the Directive to 23 October 2009.
41 On 19 November 2008, the IMF approved a two-year Stand-By Arrangement of
USD 2.1 billion to Iceland. Under the Arrangement, USD 827 million was made
available immediately, with eight further instalments of USD 155 million to
follow. An important feature of the IMF Arrangement was the requirement to
introduce stringent capital controls to prevent further devaluation of the Icelandic
króna. The IMF Arrangement was based upon certain projections as to the
balance of payments and sustainability of debt.
42 In late 2008, compensation to depositors was paid under the Netherlands and
British deposit-guarantee schemes. All retail account holders in the United
Kingdom received (or in a very small number of cases, declined) compensation
payments from the UK Government, to the full value of their deposits. In the
Netherlands, the Netherlands Government paid all private and wholesale account
holders to a maximum of EUR 100 000 per depositor.
43 On 28 November 2008, temporary capital account restrictions were imposed to
prevent further depreciation of the Icelandic króna, as an important part of the
economic programme Iceland followed during its cooperation with the IMF. The
capital controls restricted, in general, all transnational foreign currency
movements except those for the purchase of goods and services. A very limited
range of other transactions, including those related to emigration, were also
exempted from the controls.
– 11 –
44 On the same day, the Icelandic Government presented the EFTA Standing
Committee and the EEA Joint Committee with notifications of protective
measures under Article 43 EEA. Neither committee reacted unfavourably to the
45 In December 2008, the Icelandic Parliament established a Special Investigation
Commission (hereinafter “SIC”) to investigate and analyse the processes leading
to the collapse of the three main banks in Iceland. The report was delivered on 12
46 By March 2009, 93% of the commercial banking sector in Iceland had failed.
The FME estimates that since October 2008 in total banks representing 99% of
the Icelandic banking market became subject to either winding up or financial
47 On 1 April 2009, the EFTA Standing Committee and the EEA Joint Committee
were notified of developments regarding the protective measures.
48 On 9 June 2009, the freezing order in the UK was lifted.
49 On 4 October 2009, the TIF published a notice in the Icelandic Legal Gazette
calling for claims to be submitted within two months. The Netherlands and UK
Governments submitted claims, as did a small number of other depositors,
including four institutional investors. Later the TIF wrote to all institutional
investors to inform them that it was beginning to pay compensation under Act No
98/1999, and seeking an assignment of any claim against the banks themselves.
50 On 23 October 2009, the final deadline for payments expired.
51 In the autumn of 2009, controls on capital inflows in Iceland were removed.
Other capital controls remained in place. Meanwhile, a strategy for gradual
capital account liberalisation was introduced. These controls were in force when
the facts relevant to these proceedings took place.
52 On 30 October 2009, 16 June 2010, and 1 July 2010, the EFTA Standing
Committee and the EEA Joint Committee were further notified of amendments to
the protective measures. None of these notifications resulted in any criticism
from the committees.
53 In March 2010, the District Court of Amsterdam lifted the restrictions on the
Netherlands branch of Landsbanki.
54 On 14 December 2011, in Case E-3/11 Sigmarsson  EFTA Ct. Rep. 432,
the Court held that “a national measure which prevents inbound transfer into
Iceland of Icelandic krónur purchased on the offshore market is compatible with
Article 43(2) and (4) of the EEA Agreement in circumstances such as those in the
case before the referring court”. Paragraph 50 of that judgment states that “[t]he
substantive conditions laid down in Article 43(2) and (4) EEA call for a complex
assessment of various macroeconomic factors. EFTA States must therefore enjoy
– 12 –
a wide margin of discretion, both in determining whether the conditions are
fulfilled, and the choice of measures taken, as those measures in many cases
concern fundamental choices of economic policy.”
III Pre-litigation procedure and procedure before the Court
55 On 26 May 2010, ESA issued a letter of formal notice to Iceland alleging a
failure to ensure that Icesave depositors in the Netherlands and the United
Kingdom received payment of the minimum amount of compensation provided
for in Article 7(1) of the Directive, as amended, within the time limits laid down
in Article 10 of the Directive, in breach of the obligations resulting from the
Directive and/or Article 4 EEA.
56 Iceland was requested to submit its observations within two months of the receipt
of that letter. At the request of the Icelandic Government, ESA granted
extensions to that deadline, first until 8 September 2010, then until 7 December
2010 and finally until 2 May 2011.
57 On 2 May 2011, the Icelandic Government replied to the letter of formal notice.
In its reply, the Icelandic Government maintained that it was not in breach of its
obligations under the Directive or Article 4 EEA.
58 On 10 June 2011, unconvinced by Iceland’s reply to the letter of formal notice,
ESA delivered its reasoned opinion to Iceland.
59 On 30 September 2011, Iceland replied to the reasoned opinion.
60 On 13 December 2011, Iceland submitted an additional letter which contained
further information on the winding up of the Landsbanki estate including
summaries of recent Icelandic Supreme Court judgments concerning the
reordering of the priority of creditors in that winding up.
61 By application lodged at the Court on 15 December 2011, ESA brought an action
under the second paragraph of Article 31 of the Agreement between the EFTA
States on the Establishment of a Surveillance Authority and a Court of Justice
(hereinafter “SCA”) seeking a declaration that by failing to ensure payment of
the minimum amount of compensation to Icesave depositors in the Netherlands
and the United Kingdom provided for in Article 7(1) of the Act referred to at
point 19a of Annex IX to the Agreement on the European Economic Area within
the time limits laid down in Article 10 of the Act, Iceland had failed to comply
with the obligations resulting from that Act, in particular its Articles 3, 4, 7 and
10 and/or Article 4 EEA and ordering the defendant to bear the costs of the
62 On 3 February 2012, Iceland requested an extension of the period in which to
submit its defence. That request was granted by the President on 6 February
2012, setting a time limit for the submission of the defence of 8 March 2012.
– 13 –
63 In its defence, lodged at the Court on 8 March 2012, Iceland contends that the
Court should dismiss the application and seeks an order that ESA pay its costs.
64 On 28 March 2012, the European Commission requested leave to intervene in
support of ESA.
65 On 10 April 2012, ESA submitted its reply to the defence.
66 On 23 April 2012, following observations submitted by the parties, the European
Commission was granted leave to intervene by Order of the President.
67 On 7 May 2012, the Samstaða þjóðar (National Unity Coalition), an association
registered in Iceland, sought leave to intervene pursuant to Article 36 of Protocol
5 to the SCA on the Statute of the EFTA Court in support of the form of order
sought by Iceland.
68 On 9 May 2012, the Government of the United Kingdom submitted written
69 On 11 May 2012, Iceland submitted its rejoinder. On the same date, the
Government of Liechtenstein submitted written observations.
70 On 15 May 2012, the Government of the Netherlands and the Government of
Norway submitted written observations. Further, Iceland submitted an urgent
request to receive the written observations. This request was granted by the
Registrar on 16 May 2012.
71 On 23 May 2012, the European Commission submitted its statement in
72 On 15 June 2012, the application for leave to intervene by Samstaða þjóðar was
dismissed as manifestly inadmissible by Order of the President.
73 On 20 June 2012, Iceland submitted its reply to the statement in intervention by
the European Commission.
74 Reference is made to the Report for the Hearing for a fuller account of the facts,
the procedure, the pleas and arguments of the parties, which are mentioned or
discussed hereinafter only in so far as is necessary for the reasoning of the Court.
– 14 –
IV The action
First plea: Obligation of result
Arguments of the parties and of the intervener
75 The applicant’s first plea is that, in failing to ensure payment of compensation to
Icesave depositors holding deposits in Landsbanki’s branches in the UK and the
Netherlands within the time limits laid down in the Directive, the defendant has
breached its obligations under Articles 3, 4, 7 and 10 of the Directive.
76 ESA submits that the Directive imposes an obligation of result on EEA States to
ensure that a deposit-guarantee scheme is set up capable of guaranteeing that, in
the event of deposits being unavailable, the aggregate deposits of each depositor
are covered in all circumstances to the amount laid down in Article 7(1) of the
Directive. Further, the obligation of result requires States to ensure that duly
verified claims by depositors are paid within the deadline laid down in Article 10
of the Directive.
77 The applicant contends that Iceland has not fulfilled all its obligations simply by
transposing the Directive into national law and setting up and recognising a
deposit-guarantee scheme without any regard to whether the compensation of
depositors is, in fact, ensured under the conditions prescribed in the Directive.
78 According to ESA, this interpretation of the Directive is in line with the case law
of the Court of Justice of the European Union (hereinafter “ECJ”). In ESA’s
view, it follows from Case C-222/02 Paul and Others  ECR I-9425,
paragraphs 26, 27 and 30, that the ECJ considers Articles 7 and 10 of the
Directive to require a clear and precise result to be achieved.
79 The applicant argues further that it is for the national authorities to determine
how to achieve the result aimed at by a directive, in the manner which they deem
most appropriate. In the present case, if all else fails, in order to discharge its
duties under the Directive, the EEA State itself may be held responsible for the
compensation of depositors to the amount provided for in Article 7 of the
80 In this regard, ESA notes that in the Impact Assessment of 12 July 2010 (see
Commission Staff Working Document - Impact Assessment of 12 July 2010,
SEC(2010) 834/2; hereinafter “Impact Assessment”), the Commission services
set out various means of funding a deposit-guarantee fund, including ex ante
contributions, ex post contributions, State loans and direct state interventions.
However, the Directive itself does not specify how deposit-guarantee funds
should be financed.
81 Moreover, ESA argues that exceptional circumstances, such as a financial crisis
of the magnitude experienced in Iceland, cannot alter the obligation to
– 15 –
compensate depositors in accordance with Article 7(1) of the Directive. By
contrast, Article 10(2) of the Directive expressly mentions “exceptional
circumstances” as allowing for certain extensions of the deadline for payment of
compensation. Thus, in ESA’s view, the effect of “exceptional circumstances” is
limited to justifying certain payment delays.
82 ESA submits further that the TIF is an emanation of the Icelandic State within
the meaning of the EEA Agreement and, consequently, any default of that
institution is directly attributable to the State both in law and in fact.
83 In the applicant’s view, the doctrine of force majeure does not apply in the
present case and, in any event, does not release Iceland from its obligations under
84 The applicant accepts that a State injection of capital to refinance a depositguarantee
scheme may constitute State aid within the meaning of Article 61
EEA. In its view, however, this would appear to be compatible with the State aid
rules. The applicant observes further that the Icelandic authorities never
approached it to discuss the compatibility of any form of State intervention in
this case. Furthermore, it contends that the State aid rules did not constrain the
defendant from transferring national deposits to New Landsbanki.
85 The Commission emphasises that the Directive is binding upon the EEA States
and not on bodies that are created by the Member States in order to comply with
their obligations under the directives concerned.
86 In this case, the Directive imposes obligations of result on the EEA States on the
basis of the wording of Articles 3, 4, 7 and 10 of the Directive.
87 The intervener asserts that, following the introduction of a scheme, obligations of
result include the obligation to ensure that the deposit-guarantee scheme is
capable of ensuring the repayment of the covered deposits. In the event of a bank
collapse, depositors are covered to a maximum of EUR 20 000. In the view of the
intervener, if a deposit-guarantee scheme does not have sufficient funding, the
Member State concerned must be regarded as having infringed the Directive.
88 In its view, any other interpretation would render the provision ineffective to
ensure the objective of the Directive, that is, to provide a guarantee to depositors
when deposits become unavailable, as depositors would not be able to rely on
deposit-guarantee schemes. Such an interpretation would also fail to achieve the
purpose of ensuring last resort protection.
89 The intervener shares the applicant’s assessment, namely, that this interpretation
is in line with the case law of the ECJ. In the intervener’s view, an obligation of
result can be clearly inferred from Paul and Others (cited above).
– 16 –
90 The intervener emphasises that EEA States are free to decide how depositguarantee
schemes are funded in order to pay compensation in accordance with
the Directive. In its view, a State could determine, for example, that the
remaining banks, as well as newly created banks, be required to contribute to the
refinancing of the scheme to the extent necessary for ensuring the repayment of
depositors, or that the schemes take out long-term loans at market rates.
91 Such options would reflect the objective expressed in recital 23 in the preamble
to the Directive, namely, that the costs of the schemes must, in principle, be
borne by credit institutions.
92 According to the intervener, the possibility cannot be excluded, however, that an
EEA State has no other choice than to resort to State funding. It reiterates that
this is a matter which is within the discretion of the EEA State itself.
93 The intervener asserts that no provision of the Directive allows EEA States to
disregard its rules in exceptional circumstances, such as a financial crisis. In its
view, the Directive was devised precisely to deal with the exceptional occurrence
of a bank failure, including circumstances in which supervision has not proved
sufficient to save a bank. The European legislature did not include any additional
derogation over and above what is provided for in Article 10(2) of the Directive.
94 Moreover, the intervener considers that, also on the basis of case law, the
defendant’s force majeure plea must be rejected.
95 Finally, the Commission submits that the present case concerns the obligation of
an EEA State under the Directive to ensure the compensation prescribed by the
Directive. Any State liability vis-à-vis individual depositors for not having
ensured the compensation prescribed by the Directive is a different issue. Such
liability would have to be established by a national court.
96 The defendant submits that the Directive imposes no obligation of result on an
EEA State to use its own resources in order to guarantee the pay-out of a depositguarantee
scheme in the event that “all else fails”. The obligations incumbent
upon the State are limited to ensuring the proper establishment, recognition and a
certain supervision of a deposit-guarantee scheme.
97 Moreover, the defendant argues that no provision of the Directive suggests that
any form of State guarantee or State funding is required under the Directive, in
particular where a guarantee scheme is unable to pay compensation. It places an
obligation upon the State to set up and to supervise a deposit-guarantee scheme,
but there is no suggestion whatsoever that it must pay compensation.
98 Recitals 4, 23 and 25 in the preamble to the Directive make clear that the funding
for deposit-guarantee schemes will come from the banks. However, the
– 17 –
applicant’s case converts the Directive from a measure funded by the banks into
a measure that imposes huge potential liabilities on the State.
99 Article 7(6) of the Directive is the only operative provision that deals with the
scenario that a deposit-guarantee scheme might be unable to pay duly qualified
claims. However, the solution contemplated by this provision in the case of nonpayment
is an action against the scheme and not the EEA State.
100 The sole purpose of recital 24 in the preamble to the Directive is to exclude State
liability if the compensation of depositors is ensured, as confirmed by the ECJ’s
judgment in Paul and Others and in particular by the German version of said
101 With regard to the applicant’s claim that it is undisputed between the parties that
the TIF could not cope with the almost total failure of Iceland’s banks, in the
defendant’s view, this does not show any failure on its part to implement the
Directive properly. It contends – and claims to find particular support for its
argument in the Impact Assessment – that no deposit-guarantee scheme could
have coped with such a wide-scale banking failure.
102 The defendant submits that, if the obligation of result imposed by the Directive
were that the State must ensure the payment of compensation, in whatever
circumstances, then, if all else fails, the State would have to step in. That would
be the case no matter how many hypothetical choices a State has. The logic of the
applicant’s argument – so the defendant contends – is that the State is left with no
choice at all whether to use its resources to fund a deposit-guarantee scheme – at
least where all else fails.
103 The defendant contends that any attempt to underwrite a deposit-guarantee
scheme using the resources of the State creates its own problems. These include
huge costs for the State, moral hazard on the part of the banks, and a linkage
between the liabilities of the banks and the financial exposure of the State. That
kind of link can have very serious consequences. A severe financial crisis easily
turns to a possible sovereign default.
104 In the defendant’s view, where widespread banking failure takes place, other
policy tools are required. In that regard, it notes that the Commission is
considering a package of reforms to banking supervision in Europe that aims to
strengthen the measures available. State aid rules, in particular, would allow the
applicant to ensure that any injection of State funds into the banking system is no
more extensive than it needs to be, and that the single market is not detrimentally
105 The defendant observes that the interpretation of the Directive advanced by the
applicant is based on the goal of consumer protection. However, in its view,
consumer protection measures must always strike a balance between costs and
benefits. For this very reason, EEA law aims at a high level of consumer
protection, but not the highest possible. If the applicant’s approach were to
– 18 –
prevail, this could create serious risks and burdens for the EEA States, beyond
their contemplation when the Directive was adopted. Ultimately, that could be to
the detriment of consumers themselves.
106 The defendant contends that whether or not the TIF is an emanation of the State
is of no relevance for the present case.
107 The defendant infers from the Impact Assessment that an injection of State
resources into the banking system of the kind at issue in the present case amounts
to State aid. Consequently, were an EEA State under an obligation to make
payments of that kind as an automatic result of the Directive if “all else fails”, the
State guarantee would fall outside the scope of State aid supervision.
108 In this connection, the defendant notes that the Commission in its proposal for
the original Directive and its 2010 Impact Assessment recognised that public
sector funding would be subject to State aid rules and that there would be no
obligation to provide such. Moreover, it contends that there is obviously scope
for serious distortions of competition if a State bails out a deposit-guarantee
scheme – in effect subsidising its banks. In its view, State aid rules are there to
ensure that this kind of activity is regulated by the applicant.
109 In the alternative, the defendant submits that, even if the Directive were to
impose strict obligations upon the State to fund the guarantee scheme in the event
of its collapse, it was prevented from doing so by force majeure.
Other participants submitting written observations
110 Liechtenstein interprets the wording of the proposal for a Council Directive on
deposit-guarantee schemes to indicate that the Directive was intended to deal
with the failure of individual banks; not with the collapse of an entire banking
system. Liechtenstein contends that it was not envisaged that a general and
automatic State responsibility covering the costs of the failure of the whole
banking system would arise from the Directive.
111 The Netherlands argues that the obligation to comply with the result sought by
the Directive follows both from the general obligations under EEA law and the
obligation of the State in relation to a directive. The Netherlands considers that
the defence of force majeure is not available to Iceland as it can only rely on
derogations provided by the Directive itself. But even if the Directive were to
allow for a force majeure defence, in the view of the Netherlands, Iceland cannot
rely on such as it failed to notify ESA of its difficulties and did not suggest
appropriate solutions. Furthermore, the Netherlands argues that financial
difficulties cannot be accepted as justification under EEA law, as to allow
– 19 –
financial difficulties as a defence would unjustly weaken the effectiveness of the
112 In the view of the Netherlands, Iceland failed in any event to prove a force
majeure defence on the merits as it submitted evidence which is largely general
in nature and based on assertion rather than proof. Moreover, Iceland also failed
to prove that there was an “absolute impossibility” of establishing any form of
deposit-guarantee scheme that would have been capable of ensuring the result
sought by the Directive.
113 Norway argues that a general and automatic State responsibility for
compensation of depositors as a last resort would impose an extensive financial
burden on EEA States. Without a clear and precise wording in the Directive, the
existence of such an obligation cannot be assumed. An obligation of such kind on
the part of the EEA States does not follow from the preamble to the Directive or
the preparatory works. Moreover, recital 24 in the preamble to the Directive
appears to exclude automatic State responsibility.
The United Kingdom
114 The United Kingdom interprets the Directive as imposing an obligation on EEA
States to ensure that the relevant deposit-guarantee schemes should pay a
prescribed compensation to each eligible investor within the applicable time limit
in the event of unavailability of deposits within the meaning of the Directive.
115 The United Kingdom asserts that arguments related to force majeure should be
dismissed as an EEA State may only rely on derogations provided in the
Directive itself. Were force majeure available as a defence, the defendant would
have to inform the applicant of its difficulties and suggest appropriate solutions.
116 The United Kingdom also argues that the defendant failed to prove its defence on
the merits in that it failed to show that it would have been absolutely impossible
for it to establish any form of deposit-guarantee scheme under the Directive. The
United Kingdom submits further that the evidence offered by the defendant in
support of its case was largely general in nature and based on assertions rather
Findings of the Court
117 For the purposes of the first plea, it has to be assessed whether in a systemic
crisis of the magnitude experienced in Iceland the Directive itself envisages that
the defendant should have ensured payment to depositors in the Icesave branches
in the Netherlands and the United Kingdom in accordance with Articles 3, 4, 7
and 10 of the Directive. Moreover, it must also be assessed whether the
defendant has infringed the alleged obligation of result.
– 20 –
118 The Court recalls at the outset that a failure to fulfil obligations can be found
only if there is, upon expiry of the period laid down in the reasoned opinion, a
situation contrary to EEA law which is objectively attributable to the EEA State
concerned (see, for example, Case E-8/11 ESA v Iceland  EFTA Ct. Rep.
467, paragraph 34).
119 Consequently, the nature of the result to be achieved is determined by the
substantive provisions of the individual directive in question.
120 As the first plea concerns the question whether the alleged obligation of result
follows directly from the Directive, it must be kept in mind that, as set out in
Article 7 EEA, one of the principal characteristics of directives is precisely that
they are intended to achieve a specific result whilst leaving it to the EEA States
and their national authorities how to achieve this objective. In any case, there is a
general obligation on the EEA States to ensure that the provisions of a directive
are fully effective.
121 European legislative practice shows that there may be great differences in the
types of obligations which directives impose upon EEA States and therefore in
the results which must be achieved. Some directives require legislative measures
to be adopted at national level and compliance with those measures to be the
subject of judicial or administrative review. Other directives lay down that the
EEA States are to take the necessary measures to ensure that certain objectives
formulated in general and unquantifiable terms are attained, whilst leaving them
some discretion as to the nature of the measures to be taken. Yet other directives
require the EEA States to obtain very precise and specific results after a certain
period (compare Case C-60/01 Commission v France  ECR I-5679,
paragraphs 26 to 28, and case law and examples cited).
122 It is recalled in this respect that, pursuant to Article 1 of Protocol 1 to the EEA
Agreement, preambles of the acts referred to in the Annexes are not adapted for
the purposes of the Agreement. They are relevant to the extent necessary for the
proper interpretation and application, within the framework of the EEA
Agreement, of the provisions contained in such acts (see, for example, Case
E-14/11 DB Schenker v ESA, judgment of 21 December 2012, not yet reported,
123 Moreover, it should be added that the question whether an EEA State is obliged
to provide for compensation for loss and damage caused to individuals as a result
of breaches of obligations under the EEA Agreement for which that State can be
held responsible (see, for example, Case E-9/97 Sveinbjörnsdóttir  EFTA
Ct. Rep. 95, paragraphs 62 and 63, and Case E-2/12 HOB-vín III, judgment of 11
December 2012, not yet reported, paragraph 117 et seq.) lies outside the scope of
the present proceedings.
– 21 –
124 At the outset, the Court notes that as a result of the crisis, the regulatory
framework of the financial system has been subject to revision and amendment in
order to enhance financial stability. As regards the Directive, those amendments
dealt, inter alia, with the improvement of depositor protection and the
maintenance of depositors’ confidence in the financial safety net (see Directive
2009/14/EC of the European Parliament and of the Council of 11 March 2009
amending Directive 94/19/EC on deposit-guarantee schemes as regards the
coverage level and the pay-out delay, OJ 2009 L 68, p. 3). However, the
judgment in the present case must be based on the Directive as it stood at the
relevant time. Then, it did not encompass those amendments and the improved
protection of depositors. Those revisions are not yet part of the EEA Agreement.
125 The aim pursued by the Directive is, on the one hand, the freedom of
establishment and freedom to provide services in the banking sector, and the
stability of the banking system and protection for savers, on the other (compare
the Opinion of Advocate General Léger in Case C-233/94 Germany v Parliament
and Council  ECR I-2405, point 35).
126 This dual objective is expressed in the first recital of the Directive which states
that the harmonious development of the activities of credit institutions
throughout the Community should be promoted through the elimination of all
restrictions on the right of establishment and the freedom to provide services,
while increasing the stability of the banking system and protection for savers. In
this regard, the effect of the machinery established by the Directive is to prevent
the EEA States from invoking depositor protection in order to impede the
activities of credit institutions authorised in other EEA States (see, for
comparison, Germany v Parliament and Council, cited above, paragraph 19).
127 In this regard, it must be recalled that recent European regulatory policies in the
relevant field are based on the principles of mutual recognition and a “single
passport” mechanism which allows financial services operators lawfully
established in one EEA State to establish and/or provide their services in other
EEA States without further authorisation requirements (see, for example, recitals
6 and 7 in the preamble to the Directive).
128 In light of the express reference made to the system of single authorisation, the
Directive has to be considered as constituting one piece of a regulatory
framework for banks and other financial institutions (see, mutatis mutandis, Case
E-17/11 Aresbank, judgment of 22 November 2012, not yet reported, paragraphs
86 to 95).
129 Soundly regulated and safe financial institutions are of decisive importance for
financial stability in the EEA. Therefore, the European strategy aims at
establishing a common regulatory framework ensuring prudential oversight and
consumer protection throughout the European internal market.
– 22 –
130 It follows from Article 3(1) of the Directive that an EEA State is under an
obligation to ensure that within its territory one or more deposit-guarantee
schemes are introduced and officially recognised.
131 The system introduced by Article 3(1) of the Directive is not one of absolute
constraint. It leaves the EEA States free to introduce and recognise several
deposit-guarantee schemes within their territory, thereby allowing the credit
institutions to choose the model that will best suit them. The Commission’s
proposal for the Directive expressly states that “[a]fter receiving the assurance
that the financing arrangements were sufficiently sound to pay off all depositors
covered, including those at branches in another Member State, it was not
considered necessary to harmonize rules which are closely linked with the
management of the schemes in question” (Commission proposal for a Council
Directive on deposit-guarantee schemes, COM(92) 188 final, p. 8).
132 Pursuant to Article 3(2) to (5) of the Directive, the competent national authorities
that have issued authorisations to credit institutions are – in cooperation with the
deposit-guarantee scheme – obliged to ensure that the credit institutions comply
with their obligations as members of a scheme. Where appropriate, under the
conditions specified in Article 3(5) of the Directive, they must adopt a decision
revoking the authorisation of the institution in question.
133 As the ECJ held in Paul and Others, the purpose of those provisions is to
guarantee to depositors that the credit institution in which they make their
deposits belongs to a deposit-guarantee scheme and fulfils its obligations. This
shall ensure protection of their right to compensation in the event that their
deposits are unavailable, in accordance with the rules laid down in the Directive
and more specifically in Article 7 thereof. However, Article 3(2) to (5) of the
Directive relate only to the introduction and proper functioning of the depositguarantee
scheme as provided for by the Directive (Paul and Others, cited above,
paragraphs 28 to 29).
134 The Directive does not exhaustively regulate the unavailability of deposits under
EEA law, but simply requires EEA States to provide for a harmonised minimum
level of deposit protection (compare the Opinion of Advocate General Stix-Hackl
in Paul and Others, cited above, point 117). It is therefore clear that national
authorities have considerable discretion in how they organise the schemes.
135 In view of the above, pursuant to Article 3 of the Directive, EEA States have to
introduce and officially recognise a deposit-guarantee scheme. Moreover, they
have to fulfil certain supervisory tasks in order to ensure the proper functioning
of the deposit-guarantee scheme. However, it is not envisaged in that provision
that EEA States have to ensure the payment of aggregate deposits in all
136 Article 7(1) of the Directive specifies the minimum coverage for aggregate
deposits that must be provided in the event of deposits being unavailable
– 23 –
(compare Paul and Others, cited above, paragraph 27). It provides for minimum
harmonisation as regards the level of coverage for individual deposits.
137 It follows from the words “[d]eposit-guarantee schemes shall stipulate...” that an
obligation is imposed on EEA States to ensure that national rules are adopted or
maintained which require a coverage level of at least EUR 20 000.
138 With the adoption of Directive 2009/14, the wording of Article 7(1) of the
Directive has been replaced. The new version states that “Member States shall
ensure that the coverage for the aggregate deposits of each depositor shall be at
least EUR 50 000 in the event of deposits being unavailable”. Moreover, a new
paragraph 1(a) has been introduced in Article 7 which lays down that Member
States shall ensure by 31 December 2010 that the coverage for the aggregate
deposits of each depositor shall be set at EUR 100 000 in the event of deposits
139 It appears that under the new version of the provision EEA States are obliged to
ensure a certain level of coverage. Whether this obligation is limited to a banking
crisis of a certain size would require further assessment. However, that question
can be left open here since, as mentioned above (see paragraph 124), Directive
2009/14 is not applicable in the present case.
140 At any rate, the rewording of Article 7 of the Directive shows that the European
legislature considered substantial change necessary to extend the responsibility of
the EEA States beyond the establishment of an effective framework.
141 This supports the view that the obligation on the EEA States under the version of
the provision applicable in the case at hand is limited to ensuring that national
rules which require a coverage level of at least EUR 20 000 are maintained or
142 Pursuant to Article 7(6) of the Directive, EEA States have to ensure that the
depositor’s right to compensation may be the subject of an action by the
depositor against the guarantee schemes. The scope of this provision
encompasses the scenario that a deposit-guarantee scheme might be unable to
pay duly qualified claims.
143 However, the obligation on the EEA States is limited to the maintenance or
adoption of rules that provide for an effective right to file an action against the
guarantee scheme particularly in the case of non-payment (compare Paul and
Others, cited above, paragraph 27).
144 Consequently, it must be held that Article 7 of the Directive does not lay down
an obligation on the State and its authorities to ensure compensation if a depositguarantee
scheme is unable to cope with its obligations in the event of a systemic
– 24 –
145 Article 10 of the Directive establishes time limits for the payments of guarantee
schemes to depositors. This follows from the exceptions provided for in Article
10(3) and (5) which refer expressly to “the time limit laid down in paragraphs (1)
146 However, the mandatory language of the English version of Article 10(1) of the
Directive, i.e. “[d]eposit-guarantee schemes shall be in a position to pay ... within
three months of the date on which the competent authorities ...”, establishes
merely a procedural obligation, as it refers only to the binding nature of the threemonth
period prescribed therein.
147 The importance of timely payments by the guarantee scheme is further
emphasised in Article 10(2) of the Directive. Under this provision, a guarantee
scheme may apply to the competent authorities for an extension of the time limit
set out in Article 10(1) of the Directive only in wholly “exceptional
circumstances” and in “special cases”. The Directive does not contain a
definition of those terms.
148 Accordingly, pursuant to Article 10(2) of the Directive, EEA States and their
competent authorities are under an obligation to supervise and ensure that
deposit-guarantee schemes are, as a rule, not released from the short deadline
established in Article 10(1) of the Directive, which forms the general rule.
However, an obligation on the State and its national authorities to ensure
compensation if a deposit-guarantee scheme is unable to cope with its obligations
under exceptional circumstances such as in a systemic crisis cannot be derived
from that provision.
149 In view of the above, the Court finds that the obligation on EEA States under
Article 10 of the Directive is limited to provide for a mandatory and effective
procedural framework with respect to time limits.
150 Furthermore, reference should be had to Articles 1(3) and 9(3) and recitals 3, 10
and 25 in the preamble to the Directive. However, these provisions show that the
Directive deals – at least primarily – with a failure of individual banks and not
with a systemic crisis.
151 Even as regards the important objective to avoid bank runs, the wording of recital
4 in the preamble to the Directive is limited to a failure of a single credit
institution that may lead to massive withdrawals also from healthy institutions.
152 It must be noted in this respect that in the 2010 Impact Assessment the
Commission services stated in relation to a possible harmonised approach to a
target level for deposit-guarantee funds that the “choice of a target level for the
funds may be related to the capability of deposit-guarantee schemes to handle a
bank failure of a specific size based on bank recapitalisation by Member States
during the financial crisis…” (Impact Assessment, section 7.8, p. 53). The
biggest failure envisaged by the Commission’s services is a failure of a large
member bank accounting for 7.25% of eligible deposits.
– 25 –
153 Not even this Impact Assessment, made in the light of the financial crisis of
2007/2008 which included the failure of the Icelandic banks, contemplated the
extension of the funding of deposit-guarantee schemes to cover a systemic bank
failure of the magnitude experienced in Iceland. The Impact Assessment
concluded: “Setting a target level for DGS [sc. deposit-guarantee scheme] funds
would ensure that schemes are credible and capable to deal with medium sized
bank failures. The most cost-efficient target level would be 1.96% (or simply
2%) of eligible deposits (to be achieved within 10 years) because it would
increase DGS funds to cope with a medium-sized bank failure; and despite quite
substantial increase in contributions, it would, on average, only moderately affect
bank profits at EU level (with a stronger impact in some Member States) and
lead to very limited costs for depositors. ... It would ensure a sound financing of
the DGS but avoid unwanted side-effects if contributions were too high.” (Impact
Assessment, section 7.8, p. 58)
154 Moreover, the mechanism and level of funding of the schemes have not been
harmonised. The Directive does not contain any substantive provision that deals
with those organisational matters.
155 Recital 23 in the preamble states that it is not indispensable, in the Directive, to
harmonise the methods of financing schemes guaranteeing deposits or credit
institutions themselves. According to the same recital, this follows from the fact,
inter alia, that the financing capacity of such schemes must be in proportion to its
liabilities. The Directive contains no definition of what is considered to be
156 It is clear from recital 23 in the preamble to the Directive as well as from recitals
4 and 25 that the cost of financing such guarantee schemes must be borne, in
principle, by credit institutions and not the EEA States.
157 Recital 23 in the preamble to the Directive aims to strike a balance between the
cost of funding a deposit-guarantee scheme, the stability of the national banking
system and consumer protection. The objective is that the banking system should
function in the interests of consumers and the economy as a whole.
158 However, the provision of private funding to enable the guarantee scheme to
cover deposits in a systemic crisis up to the maximum coverage level would
clearly undermine the objective laid down in recital 23, that is, not to jeopardise
the stability of the banking system itself. Accordingly, the cost of the guarantee
schemes must not be too onerous for the member credit institutions.
159 The payment obligation thus lies with the deposit-guarantee fund, and the
guarantee funds are to be financed entirely by the credit institutions. In
circumstances where the fund cannot meet depositors’ claims in the event of a
default by a member of the scheme, it is for the remaining credit institutions to
make up the difference. In other words, the bankruptcy of a financial institution
is covered – as in classic insurance systems – by the rest of the institutions active
in the market.
– 26 –
160 How to proceed in a case where the guarantee scheme is unable to cope with its
payment obligations remains largely unanswered by the Directive. The only
operative provision that deals with non-payment is Article 7(6) of the Directive,
according to which depositors must have the possibility to bring an action against
the relevant scheme. However, an obligation on the State or a possible action
against the State in those circumstances is not envisaged in the Directive’s
161 This does not mean that depositors will necessarily remain unprotected in such a
case. Depositors may fall within the remit of other parts of the safety net. They
may benefit from other provisions of EEA law regarding financial services, as
well as the activities of supervisors, central banks, and governments. However,
the question in the present case is whether EEA States are legally responsible
under the Directive in case of such an enormous event.
162 Reference should be had to the second subparagraph of Article 3(1) of the
Directive. Pursuant to that rule, a credit institution may be exempted by an EEA
State from its obligation to be a member of a deposit-guarantee scheme where it
belongs to a system that ensures, in particular, its liquidity and solvency and it is
thereby guaranteed that depositors receive protection at least equivalent to that
provided by the guarantee scheme.
163 That possibility to exempt a credit institution from the obligation to belong to a
deposit-guarantee scheme requires, in addition, that the alternative system fulfils
certain conditions. The third of these requires the system not “to consist of a
guarantee granted to a credit institution by a Member State itself or by any of its
local or regional authorities”. The aim of this provision is to minimise the
potential to distort competition, inherent in the very nature of guarantees of that
164 Were an EEA State legally obliged to ensure the compensation of depositors
where a recognised deposit-guarantee scheme is unable to cope with its payment
obligations, the negative effect on competition would be comparable.
Consequently, it is likely that, had the European legislature sought to adopt a
different approach as regards the funding of deposit-guarantee schemes, this
would have been expressly stated in the Directive.
165 It is recalled in this regard that the Commission’s 1992 proposal for the Directive
recognised that any public sector funding would be subject to State aid rules and,
moreover, that there would be no obligation to provide such. The proposal states
in this respect: “The question of whether the public sector would be able to
provide assistance for guarantee schemes in emergency situations of exceptional
gravity and when the schemes’ resources have been exhausted has been raised in
order to enable them to respect their commitments to depositors. It did not seem
appropriate, in the proposal for a Directive, to prohibit such assistance, which
could prove necessary in practice, although it is not desirable as a general rule
and could not be allowed to contravene the rules of the Treaty concerning State
– 27 –
aid.” (Commission proposal for a Council Directive on deposit-guarantee
schemes, COM(92) 188 final, p. 8)
166 Moreover, in its 2010 Impact Assessment, the Commission noted: “DGS [sc.
deposit-guarantee schemes] are financed by banks and the Commission intends
to maintain this requirement. That means that the budget of Member States is not
directly concerned by the DGS Directive. The recent crisis has shown that in a
systemic crisis, DGS may reach their limits. However, even if in such cases
governments stepped in under strict obedience of state aid rules, this would not
be triggered under a legal obligation in the DGS Directive and ‘viability for
Member States’ is therefore not subject of this impact assessment.” (Impact
Assessment, section 3.2, pp. 8-9.)
167 An additional aspect to which regard must be had is mentioned in recital 16 in
the preamble to the Directive. There, the European legislature states that it would
not be appropriate to impose a level of protection “which might in certain cases
have the effect of encouraging the unsound management of credit institutions”.
This points to the concept of moral hazard. In economic literature the lesson of
moral hazard has been described with the words that “less is more”. Professor
Joseph E. Stiglitz has formulated in this respect: “[T]he more and better
insurance that is provided against some contingency, the less incentive
individuals have to avoid the insured event, because the less they bear the full
consequences of their actions”. (“Risk, Incentives and Insurance: The Pure
Theory of Moral Hazard”, The Geneva Papers on Risk and Insurance, 8 (No 26,
January 1983), 4, at p. 6.)
168 It is recalled that, in a crisis of a magnitude such as the one experienced in
Iceland, an EEA State would have very limited options to ensure compensation
to depositors that is, first, it could provide a State guarantee for a loan taken out
by the scheme itself, or, second, it could directly fund the scheme or its
depositors. Thus, moral hazard would also occur in the case of State funding,
serving to immunise a deposit-guarantee scheme from the costs which have, in
principle, to be borne by its members.
169 The alleged obligation of result would further run counter to the aims mentioned
in recitals 2 and 3 in the preamble to the Directive, according to which consumer
protection is to be achieved by means of the introduction of a minimum level of
deposit protection and the guarantee that foreign and domestic deposits are
protected by the same guarantee scheme irrespective of where a credit institution
has its head office.
170 Accordingly, consumer protection under the Directive does not entail full
protection (compare, as regards the coverage level, Germany v Parliament and
Council, cited above, paragraph 48), since increasing consumer protection may
reach a point where the costs outweigh the benefits.
171 Finally, the question arises whether recital 24 in the preamble to the Directive
can be said to support the alleged obligation of result. That recital states that the
– 28 –
liability of EEA States and their competent authorities is excluded if they ensure
the compensation or protection of depositors under the conditions prescribed in
the Directive. The Court notes that this recital may be necessary to allow for a
proper delineation of the scope of the principle of State liability.
172 As the applicant set out in its argument, recital 24 in the preamble to the
Directive states that liability of a State and its competent authorities in respect of
depositors is precluded “if they have ensured that one or more schemes
guaranteeing deposits or credit institutions themselves and ensuring the
compensation or protection of depositors under the conditions prescribed in this
Directive have been introduced and officially recognized.”
173 However, “the conditions prescribed in this Directive” are not further defined. As
has been stated above, the funding obligation imposed on the members of a
guarantee scheme is limited under the Directive and must not be too onerous in
order not to jeopardize the stability of the banking system.
174 The result to be achieved by the EEA States themselves follows from their above
mentioned general obligation, that is, to ensure that the provisions of the
Directive are fully effective, i.e. that the specific obligations are given practical
175 However, in light of the present assessment of the Directive, the result to be
achieved is limited, particularly having regard to the fact that the Directive aims
at minimum harmonisation in relation to the level of coverage and does not
provide for any harmonisation as regards the level and mechanisms of funding.
176 Accordingly, the reservation set out in recital 24 in the preamble to the Directive
aims expressly to preclude an excessive shifting to the State of the costs arising
from a major banking failure. (See, by way of illustration, Michel Tison, “Do not
attack the watchdog! Banking supervisor’s liability after Peter Paul”, Working
Paper Series, Financial Law Institute, Universiteit Gent 2005, p. 25, including
177 Consequently, recital 24 in the preamble to the Directive does not support the
existence of the alleged obligation of result.
178 In view of the above, the Court holds that the Directive does not envisage that the
defendant itself must ensure payments to depositors in the Icesave branches in
the Netherlands and the United Kingdom, in accordance with Articles 7 and 10
of the Directive, in a systemic crisis of the magnitude experienced in Iceland.
179 In any event, as the defendant correctly argued, the alleged obligation of result
also cannot be derived from the ECJ’s ruling in Paul and Others. The case at
hand must be distinguished from that earlier case on the facts. Paul and Others
dealt mainly with the alleged liability of the German authorities resulting from
negligence in the conduct of banking supervision, and the question whether the
supervisory obligation imposed on national authorities under Article 3(2) to (5)
– 29 –
of the Directive precluded a limitation of State liability under national law in
relation to such supervision. Furthermore, in Paul and Others, the national court
had already held the State concerned to be liable under the principle of State
liability to the amount provided for in Article 7(1) of the Directive.
180 Finally, a comparison with other secondary law also does not confirm the
existence of the alleged obligation of result. It is recalled in this regard that the
content of the result to be achieved is determined by the substantive provisions of
the individual directive. In any event, the ECJ’s ruling in Blödel-Pawlik (Case
C-134/11, judgment of 16 February 2012, not yet reported) does not support the
applicant’s plea. This case concerned the obligations of a travel organiser and its
insurer. According to the ECJ, the obligation of result imposed on the State by
Directive 90/314 was to ensure that a travel organiser is liable to the consumer
for proper performance of the contract. However, the ECJ did not hold that there
is an obligation on the State itself to pay compensation if a travel organiser is
unable to meet its obligations.
Emanation of the State
181 The applicant and the intervener have argued that the TIF, a private foundation
under Icelandic law, is an emanation of the State.
182 However, the case at hand concerns whether there is an obligation of result
placed upon the State under the Directive, in the manner described in ESA’s
183 Hence, the question is of no significance for the assessment of the first plea.
184 For the sake of good order, the Court simply adds that, in any event, the applicant
has adduced insufficient evidence to support its claim that the TIF is directly or
indirectly operated by public authorities, i.e. under the control of the Icelandic
State (see, for comparison, Case C-356/05 Farrell  ECR I-3067, paragraph
185 In light of all of the above, the first plea is dismissed.
Second and third pleas: Discrimination contrary to the Directive and/or Article 4
Arguments of the parties
The applicant and the intervener
186 The applicant and the intervener submit that, even if, contrary to their argument,
the provisions of Directive 94/19 are interpreted as not imposing an obligation of
result, the defendant is in breach of Articles 4(1) and 7(1) of the Directive and/or
Article 4 EEA by having failed to ensure compensation to Icesave depositors in
– 30 –
the Netherlands and the United Kingdom as set out in the Directive. In their
view, the depositors in Iceland received full protection whereas the depositors in
the Netherlands and the United Kingdom were left without any or any
187 The applicant and the intervener contend that the Icesave customers in branches
in Iceland and their counterparts in branches in other EEA States were, in their
capacity as deposit holders in Icelandic banks, in a comparable situation as
regards the protection granted to them by the Directive under Article 4 thereof
read in light of recital 3 in the preamble to the Directive.
188 The applicant and the intervener state that, when adopting emergency measures
in response to the banking crisis in October 2008, the Icelandic Government
made a distinction between domestic deposits and deposits in foreign branches.
The domestic deposits were moved to new banks and were covered in full.
Meanwhile, foreign depositors did not even enjoy the minimum guarantee laid
down in the Directive.
189 Thus, in the view of the applicant and the intervener, the defendant has indirectly
discriminated against foreign depositors on the basis of nationality, which is
prohibited by the Directive read in the light of Article 4 EEA or by Article 4
190 In addition, the applicant specifies that the present case does not concern whether
the defendant was in breach of the prohibition on discrimination for not moving
over the entirety of deposits of foreign Icesave depositors into New Landsbanki,
as it did for domestic Landsbanki depositors. The breach is said to lie in the
failure of the Icelandic Government to ensure that Icesave depositors in the
Netherlands and the United Kingdom received payment of the minimum amount
of compensation provided for in the Directive within the time limits prescribed,
something it did for domestic depositors. The applicant adds that compensation
of domestic and foreign depositors above and beyond that minimum amount has
not been and is not at issue in the context of the present proceedings.
191 Moreover, the applicant and the intervener submit that the defendant cannot
advance any viable justification for the discriminatory measures taken against the
foreign deposits in the circumstances of the case.
192 The defendant argues that the discrimination pleas are entirely misconceived and
highly contrived. It observes that the applicant seeks a declaration that, in failing
to ensure payment of the EUR 20 000 per depositor required under the Directive,
the defendant breached EEA law. However, in the defendant’s view, this
obligation cannot be derived from the principle of non-discrimination.
193 In the defendant’s view, the second plea is plainly unsustainable since it would
create an obligation upon an EEA State to ensure minimum compensation under
– 31 –
the Directive in circumstances in which the partially harmonised regime created
by the Directive does not require such.
194 In the circumstances of a bank failure, the defendant submits, it is legitimate for
EEA States to intervene to rescue banks, or branches which are necessary to the
functioning of the banking system, but there is no obligation to do so.
195 In the defendant’s view, what is regarded as discrimination in the present case are
in reality the different consequences that have flowed as a result of the fact that
the domestic branches of Landsbanki were essential to the rescue of the Icelandic
financial system. Although the Directive is a consumer protection measure, it
does not address in any way the regulation of bank insolvency and restructuring –
they are entirely beyond its scope.
196 Moreover, as regards a breach of Article 4 EEA alone, the third plea, the
defendant submits that such a claim has not been made out. The applicant has
simply asserted that Article 4 EEA is applicable without seeking to demonstrate
that the legal conditions for its application are satisfied.
197 The defendant contends further that, in claiming that it was discriminatory not to
provide the minimum compensation afforded by the Directive to the overseas
depositors given that the domestic depositors were “covered” by virtue of a
transfer of their deposits to the new banks, the applicant is arguing, in effect, for
different treatment. Such a line of argument as a basis for a discrimination claim
is, in the defendant’s view, incoherent.
198 On the other hand, the defendant notes that it is not part of the applicant’s case
that the transfer of domestic deposits effected as part of the bank restructuring
should have been extended to overseas depositors. The applicant has never
questioned the fact that it was not possible to extend this rescue to the overseas
branches. Thus, in the defendant’s view, the applicant does not argue that the two
groups should have been treated equally.
199 In any event, the defendant submits, it is unclear whether the transfer of domestic
deposits to the new bank led to a better position of the depositors holding such
accounts. These account holders were subject to strict capital controls, and were
unable to convert their (severely depreciating) Icelandic krónur into any other
currency. By contrast, the priority claimants in the Landsbanki winding up now
stand to be fully reimbursed in a fully convertible currency.
200 Moreover, as regards the second plea, the defendant argues that there has been no
discrimination whatsoever in the manner in which the deposit-guarantee fund
itself has operated. The two groups compared by ESA, depositors with domestic
branches and depositors with foreign branches of Landsbanki, have been treated
equally. None has received any payments under the guarantee scheme.
201 In addition, the deposits held with domestic branches never became unavailable
within the meaning of Article 1(3) of the Directive. In any event, Iceland
– 32 –
continues, any difference in treatment between the two groups would be
objectively justified. Although pure economic aims cannot constitute a sufficient
justification, clear public interest objectives may constitute a legitimate aim even
where that public interest has economic ends.
Other participants submitting written observations
202 The governments which submitted written observations have not addressed the
issue of discrimination.
Findings of the Court
203 By its second and third pleas, the applicant contends that by covering deposits in
Iceland at least to the level prescribed by the Directive, and within the time limits
provided therein, and, at the same time, not providing foreign depositors with at
least that same minimum guarantee, the defendant has infringed the Directive
read in light of Article 4 EEA or has indirectly discriminated on the basis of
nationality which is prohibited by Article 4 EEA.
Discrimination contrary to the Directive read in light of Article 4 EEA
204 Article 4 EEA provides as a general principle that, within the scope of
application of the EEA Agreement, and without prejudice to any special
provisions contained therein, any discrimination on grounds of nationality shall
205 Article 4 EEA applies independently only to situations governed by EEA law for
which the EEA Agreement lays down no specific rules prohibiting discrimination
(see Case E-1/00 Íslandsbanki-FBA [2000-2001] EFTA Ct. Rep. 8, paragraphs
35 and 36, and case law cited).
206 Pursuant to Article 4(1) of the Directive, deposit-guarantee schemes introduced
and officially recognised in an EEA State in accordance with Article 3(1) of the
Directive shall cover depositors at branches set up by credit institutions in other
207 Recital 3 in the preamble to the Directive states that in the event of the closure of
an insolvent credit institution the depositors at any branches situated in a
Contracting Party other than that in which the credit institution has its head office
must be protected by the same guarantee scheme as the institution’s other
208 It follows from Article 4 of the Directive read in light of recital 3 in the preamble
that depositors at any branches established by credit institutions in other EEA
States shall belong to the guarantee scheme introduced and officially recognised
in the home EEA State.
– 33 –
209 Moreover, the treatment of foreign and domestic depositors by the depositguarantee
scheme must be equal as regards payment of minimum compensation
under the Directive in the event of the closure of an insolvent credit institution.
210 Thus, the principle of non-discrimination requires that there is no difference in
the treatment of depositors by the guarantee scheme itself and the way it uses its
funds. Thus, to that extent, discrimination under the Directive is prohibited.
211 In the case at hand, it is undisputed that Landsbanki collapsed on 7 October
2008. Domestic deposits were transferred to New Landsbanki which was
established by the Icelandic Government between 9 and 22 October 2008. The
transfer was based on an FME decision of 9 October 2008.
212 The TIF was not involved in the transfer of the deposits. The transfer was part of
the restructuring of the Icelandic banks that was achieved by a series of measures
under the Icelandic Emergency Act.
213 On 27 October 2008, that is, within the 21 days prescribed in Article 1(3) of the
Directive, the FME made a statement that triggered an obligation for the TIF to
make payments as regards foreign deposits in branches of Landsbanki.
214 Moreover, domestic deposits did not become unavailable within the meaning of
Article 1(3) of the Directive. The transfer of domestic deposits to New
Landsbanki was made before the FME made its declaration triggering the
application of the Directive. Accordingly, depositor protection under the
Directive never applied to depositors in Icelandic branches of Landsbanki.
215 As has been stated above, the principle of non-discrimination inherent in the
Directive requires that there should be no difference in the way a depositguarantee
scheme treats depositors, and the way it pays out its funds.
216 In the present case, difference in treatment of this kind was not possible.
Consequently, the transfer of domestic deposits – whether it leads in general to
unequal treatment or not – does not fall within the scope of the nondiscrimination
principle as set out in the Directive.
217 The second plea has to be dismissed.
Discrimination contrary to Article 4 EEA
218 As regards the third plea, it is settled case-law that the principle of nondiscrimination
which has its basis in Article 4 EEA requires that comparable
situations must not be treated differently and that different situations must not be
treated in the same way. Discriminatory treatment may be justified only if it is
based on objective considerations independent of the nationality of the persons
concerned and is proportionate to the objective being legitimately pursued (see,
– 34 –
inter alia, Case E-15/11 Arcade Drilling, judgment of 3 October 2012, not yet
reported, paragraph 60, and case law cited).
219 At the time of the transfer, Icesave customers in the branches in the UK and in
the Netherlands, and their counterparts in Iceland found themselves in their
capacity as deposit holders in an insolvent Icelandic bank in a comparable
220 As regards the further assessment of the third plea, it must be recalled that the
application seeks only one declaration, namely, that, by failing to ensure payment
of the minimum amount of compensation to Icesave depositors in the
Netherlands and in the United Kingdom provided for in Article 7(1) of the
Directive within the time limits laid down in Article 10 of the Directive, the
defendant has infringed its obligations under EEA law. This application is based
on three pleas: (i) an infringement of the alleged obligation of result under the
Directive itself, (ii) an infringement of the Directive and Article 4 EEA and (iii)
an infringement of Article 4 EEA alone.
221 The applicant has limited the scope of its application by stating that “the present
case does not concern whether Iceland was in breach of the prohibition of
discrimination for not moving over the entirety of deposits of foreign Icesave
depositors into ‘new Landsbanki’, as it did for domestic Landsbanki depositors.
The breach is constituted by the failure of the Icelandic Government to ensure
that Icesave depositors in the Netherlands and the United Kingdom receive
payment of the minimum amount of compensation provided for in the Directive
within the time limits laid down in the Directive, like it did for the domestic
depositors. The compensation of domestic and foreign depositors above and
beyond that minimum amount has not and is not being discussed in the context of
the present proceedings.”
222 Moreover, in its application, ESA underlines “that this does not prejudge its view
as to whether the discrimination relating to the compensation of depositors above
and beyond the level foreseen by the Directive is justifiable”.
223 Thus, having regard to the applicant’s self-limitation, the Court is bound to
assess whether the defendant was under a specific obligation to ensure that
payments were made to Icesave depositors in the Netherlands and the UK.
224 The Court has already held that the Directive, even read in light of Article 4
EEA, imposes no obligation on the defendant to ensure that payments are made
in accordance with the requirements of the Directive to Icesave depositors in the
Netherlands and the UK.
225 Thus, such an obligation of result could only be deemed to exist if it were to
follow directly from Article 4 EEA itself. Were this the case, the transfer of
domestic deposits to New Landsbanki would have led to an obligation to ensure
the payment of minimum compensation, as specifically provided for in the
– 35 –
226 This, however, is not required under the principle of non-discrimination. Article
4 EEA requires that comparable situations must not be treated differently. A
specific obligation upon the defendant that, in any event, would not establish
equal treatment between domestic depositors and those depositors in
Landsbanki’s branches in other EEA States cannot be derived from that
principle. Consequently, this plea cannot succeed on the basis of Article 4 EEA.
227 For the sake of completeness, the Court adds that even if the third plea had been
formulated differently, one would have to bear in mind that the EEA States enjoy
a wide margin of discretion in making fundamental choices of economic policy
in the specific event of a systemic crisis provided that certain circumstances are
duly proven. This would have to be taken into consideration as a possible ground
for justification. In the earlier case of Sigmarsson, the applicant itself underlined
this point (see Sigmarsson, cited above, paragraphs 42 and 50).
228 In view of the above, also the third plea has to be dismissed.
229 Accordingly, the Court holds that, by failing to ensure payment of the minimum
amount of compensation to Icesave depositors in the Netherlands and in the
United Kingdom provided for in Article 7(1) of the Act referred to at point 19a of
Annex IX to the Agreement on the European Economic Area (Directive
94/19/EC of the European Parliament and of the Council of 30 May 1994 on
deposit-guarantee schemes) within the time limits laid down in Article 10 of the
Act, Iceland has not failed to comply with the obligations resulting from that Act,
in particular Articles 3, 4, 7 and 10 thereof, and/or Article 4 of the Agreement on
the European Economic Area.
230 Under Article 66(2) of the Rules of Procedure, the unsuccessful party is to be
ordered to pay the costs if they have been applied for in the successful party’s
pleadings. The defendant has asked that the applicant be ordered to pay the costs.
Since the latter has been unsuccessful, it must be ordered to pay the costs. The
costs incurred by those who have submitted observations are not recoverable.
231 In accordance with Article 66(4) of the Rules of Procedure, the European
Commission, which has intervened in the proceedings, is to bear its own costs.
232 The costs incurred by the Liechtenstein, Netherlands, Norwegian and United
Kingdom Governments, which have submitted observations to the Court, are not
– 36 –
On those grounds,
1. Dismisses the application.
2. Orders the EFTA Surveillance Authority to pay its own costs
and the costs incurred by Iceland.
3. Orders the European Commission to bear its own costs.
Carl Baudenbacher Páll Hreinsson Ola Mestad
Delivered in open court in Luxembourg on 28 January 2013
Thomas Christian Poulsen Carl Baudenbacher
Acting Registrar President