EU: Overdraft facilities prohibited IV

Article 101 of the Treaty establishing the European Community (TEC) underwent no substantial change during the European Convention and the IGC 2004.

The following intergovernmental conference (IGC 2007), leading to the EU Treaty of Lisbon, had nothing to add to the prohibition on monetary financing.

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The present Treaty establishing the European Community (TEC) was to become the Treaty on the Functioning of the European Union (TFEU), and generally the innovations as agreed in the 2004 IGC were to be inserted into the Treaty by way of specific modifications ‘in the usual manner’ (points 17 and 18, pages 6 and 7).

But Article III-181 of the Constitutional Treaty contained no ‘innovations’. Check the mandate of the intergovernmental conference (IGC 2007 Mandate, Council document 11218/07, 26 June 2007).

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In Article 2, point 87 of the original Treaty of Lisbon (ToL) the IGC 2007 amended Article 100 TEC, and in point 88 it dealt with Article 102, so there were no express amendments with regard to Article 101 TEC (OJ 17.12.2007 C 306/71).

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The TFEU table of equivalences confirms that Article 101 TEC became Article 101 TFEU (ToL) in the original Treaty of Lisbon and it was later renumbered Article 123 TFEU in the consolidated version, under the title ‘Economic and monetary policy’ renumbered Title VIII (OJ 17.12.2007 C 306/211─212).

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Article 123 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/99:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 1 Economic policy

Article 123 TFEU (Lisbon Treaty)
(ex Article 101 TEC)

1. Overdraft facilities or any other type of credit facility with the European Central Bank or with
the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.

2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.

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‘European Central Bank’ instead of ‘ECB’, ‘Union’ replacing ‘Community’ and ‘institutions or bodies’ expanding into ‘institutions, bodies, offices or agencies’ are all so called horizontal amendments mentioned in Article 2 of the Treaty of Lisbon (OJ 17.12.2007 C 306/41─42). Otherwise Article 123 TFEU and Article 101 TEC are identical.

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The following instalment is going to verify the essentially unchanged nature of Article 123 TFEU by taking a look at some materials.


Ralf Grahn