Cyprus Mail

EU Court to examine applications for annulment of Eurogroup’s decision on Cyprus

The General Court of the EU announced on Thursday that it has accepted to examine twelve applications, which request the annulment of the Eurogroup’s decision on Cyprus which was taken in March 2013.

All twelve applications ask for the annulment of the decision of the Eurogroup concerning the political agreement concluded with the Cypriot authorities on the key elements necessary for a future economic adjustment programme, and on the financial assistance to be provided by the European Stability Mechanism (ESM) as part of that future plan, in particular the part of the decision on the restructuring of the banking sector, as implemented by the Central Bank of Cyprus.

In addition, six of the applications ask for compensations after suffering great economic damage due to the haircut imposed on their bank deposits in the Laiki Bank and the Bank of Cyprus.

The applicants argue that the Eurogroup’s decision (which is a joint decision of the European Central Bank and the European Commission) goes beyond the powers, which have been granted to those institutions by the EU Treaty and violates fundamental rights.

They also argue that neither the Treaty nor the Protocol for the Statute of the European System of Central Banks and of the ECB, provide for any power to proceed with a haircut on deposits.

Excluded from international capital markets since April 2011, Cyprus applied for financial assistance from the EU bailout mechanism, as its two largest banks, Bank of Cyprus (BoCY) and Cyprus Popular Bank (also called Laiki Bank) requested state support following mass losses as a result of the Greek sovereign debt haircut.

In late March, the authorities and the Troika (European Commission, European Central Bank and the IMF) agreed on a €10 billion financial assistance package which featured a haircut on uninsured deposits (uninsured is the amount that exceeds 100.000 euro) to recapitalize BoCY, whereas Laiki Bank was wound down and Laiki depositors lost all their savings exceeding 100.000 euro.
The General Court is made up of at least one Judge from each Member State (28 in 2013).

The General Court has jurisdiction to hear: 1. direct actions brought by natural or legal persons against acts of the institutions, bodies, offices or agencies of the European Union (which are addressed to them or are of direct and individual concern to them) and against regulatory acts (which concern them directly and which do not entail implementing measures) or against a failure to act on the part of those institutions, bodies, offices or agencies; for example, a case brought by a company against a Commission decision imposing a fine on that company; 2.actions brought by the Member States against the Commission; 3. actions brought by the Member States against the Council relating to acts adopted in the field of State aid, ‘dumping` and acts by which it exercises implementing powers; 4. actions seeking compensation for damage caused by the institutions of the European Union or their staff; 5. actions based on contracts made by the European Union which expressly give jurisdiction to the General Court; 6. actions relating to Community trade marks; 7. appeals, limited to points of law, against the decisions of the European Union Civil Service Tribunal; 8. actions brought against decisions of the Community Plant Variety Office or of the European Chemicals Agency.

The rulings made by the General Court may, within two months, be subject to an appeal, limited to points of law, to the Court of Justice.

Related Posts

Fitch upgrades BoC citing NPE reduction, Cypriot economy resilience

Kyriacos Nicolaou

ZIKZAK Architects complete landmark Limassol office project

CM Guest Columnist

Bankman-Fried, Ellison tap attorneys as FTX probes ramp up

Reuters News Service

Turkey’s MNG Airlines to go public on NYSE

Reuters News Service

UK house prices show biggest drop since 2008: Halifax

Reuters News Service

Pub group Mitchells & Butlers flags mounting cost pressures after profit jump

Reuters News Service


Comments are closed.