Opinion of Advocate General Kokott delivered on 21 November 2024

Uitspraak

Provisional text

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 21 November 2024 (¹)

Joined Cases C‑777/22 P and C‑789/22 P

European Central Bank (ECB)

v

Francesca Corneli (C‑777/22 P)

and

European Commission

v

Francesca Corneli (C‑789/22 P)

( Appeals – Economic and monetary policy – Single supervisory mechanism – Regulation (EU) No 1024/2013 – First subparagraph of Article 4(3) – Application of national law transposing directives by the ECB – Directive 2014/59/EU – First sentence of Article 29(1) – Direct applicability – Obligation on individuals – Interpretation in compliance with the directive – Judicial review of the application of national law by the ECB – Decision of the ECB to place Banca Carige SpA under temporary administration – Action for annulment brought by a small shareholder – Admissibility – Fourth paragraph of Article 263 TFEU – Direct and individual concern – Continuing interest in bringing proceedings )

Table of contents

I. Introduction

II. Legal framework

A. European Union law

1. Regulation No 1024/2013

2. Directive 2014/59

B. National law

III. Background to the dispute

A. Facts

B. The judgment under appeal

IV. Procedure before the Court of Justice and forms of order sought

V. Assessment

A. Overview of the grounds of appeal and order of examination

B. Grounds of appeal concerning the admissibility of the action

1. Legal standing to bring proceedings under the fourth paragraph of Article 263 TFEU

(a) Direct concern

(b) Individual concern

2. Continuation of the interest in bringing proceedings

3. Interim conclusion

C. Grounds of appeal concerning the substance of the action: infringement of the first subparagraph of Article 4(3) of Regulation No 1024/2013 in conjunction with Article 29 of Directive 2014/59 and Article 70(1) of the TUB?

1. Order of examination

2. Direct applicability and primacy of the first sentence of Article 29(1) of Directive 2014/59?

(a) Normative structure of the first sentence of Article 29(1) of Directive 2014/59

(b) Direct applicability of Article 29(1) of Directive 2014/59 to the detriment of the bank and its shareholders?

3. In the alternative: direct application of the first sentence of Article 29(1) of Directive 2014/59 by the ECB?

(a) The ECB as an addressee of directly applicable provisions of a directive

(b) Consequences of the direct applicability of the first sentence of Article 29(1) of Directive 2014/59 to the detriment of the bank and its shareholders

4. Interpretation of Article 69octiesdecies(1)(b) and Article 70(1) of the TUB in compliance with the directive?

5. National law for the purposes of the first subparagraph of Article 4(3) of Regulation No 1024/2013 as ‘law’ or ‘fact’?

6. Admissibility of the complaint concerning whether the interpretation of Article 69octiesdecies(1)(b) in conjunction with Article 70(1) of the TUB complies with the directive

7. Interim conclusion

VI. Conclusion

I.      Introduction

1.        These joined appeals lodged by the European Central Bank (ECB) and by the European Commission (together ‘the appellants’) are directed against a judgment of the General Court (‘the judgment under appeal’) (²) by which it annulled the ECB decisions of 1 January and 29 March 2019 (‘the contested decisions’). By those decisions, the ECB had placed Banca Carige SpA (‘the bank’) under temporary administration (³) and had extended that measure until 30 September 2019. (⁴)

2.        The applicant at first instance and respondent, Ms Corneli, was one of many minority shareholders in the bank.

3.        The appellants complain, first, that the General Court wrongly declared the action to be admissible. The General Court had erred in law in finding that Ms Corneli had a (continuing) interest in bringing proceedings for the annulment of the contested decisions, which were of direct and individual concern to her within the meaning of the fourth paragraph of Article 263 TFEU. In this regard, the General Court distinguished Ms Corneli’s situation, where the bank was placed under temporary administration by the ECB, from the situation of the shareholders underlying the judgment in ECB and Others v Trasta Komercbanka and Others (⁵) (‘the judgment in Trasta Komercbanka’). In that case, the shareholders had challenged an ECB decision to withdraw the authorisation of the bank concerned. The Court of Justice considered that those shareholders were not directly affected by that decision and therefore dismissed their action for annulment as inadmissible, since the decision had only negative economic effects on them, but did not affect their legal position. (⁶)

4.        The appellants complain, in essence, second, with regard to the substance, that the General Court had infringed the first subparagraph of Article 4(3) of Regulation (EU) No 1024/2013. (⁷) In that regard, important questions of law arise which have not yet been clarified in the case-law of the Court of Justice. They concern the scope of the ECB’s obligation under that provision, in the exercise of its supervisory powers over credit institutions within the single supervisory mechanism, also to apply the national law adopted to transpose the relevant EU law, including Directive 2014/59/EU (⁸) which is applicable here:

–        Is the ECB required to apply national law as it was adopted by the legislature in transposing a directive and is interpreted and applied by national courts, even if it is contrary to the provisions of that directive?

–        In the case of directly applicable provisions of a directive, are not only national authorities and courts but also the ECB required to apply solely those provisions and disregard national law which is contrary to them in accordance with the principle of the primacy of EU law?

–        If the direct application of provisions of a directive is not possible, for example because they impose obligations on individuals, is the ECB required to comply with the principles governing interpretation of national law in compliance with the directive?

–        Must the ECB have recourse in this regard to the interpretative methods recognised in national law and the relevant case-law of the national courts?

5.        In my view, against the background of the basic postulates of maintaining uniformity and the rule of law in the EU legal order, the ECB as an EU institution cannot be obliged under the first subparagraph of Article 4(3) of Regulation No 1024/2013 knowingly to infringe EU law by applying national law which is contrary to it. If it nevertheless did so, this would have to be remedied by the EU Courts. These questions and the reasoning for such a conclusion are also, however, fiercely disputed in the legal literature. (⁹) In that context, it is necessary to clarify the equally disputed question concerning the standards of review that apply in actions for annulment at first instance and in subsequent appeal proceedings in respect of acts adopted by the ECB to apply national legislation. (¹⁰)

II.    Legal framework

A.      European Union law

6.        The applicable EU legislation in this case is, in essence, Regulation No 1024/2013 and Directive 2014/59.

1.      Regulation No 1024/2013

7.        Recital 34 of Regulation No 1024/2013 reads as follows:

‘For the carrying out of its tasks and the exercise of its supervisory powers, the ECB should apply the material rules relating to the prudential supervision of credit institutions. Those rules are composed of the relevant Union law, in particular directly applicable Regulations or Directives, such as those on capital requirements for credit institutions and on financial conglomerates. Where the material rules relating to the prudential supervision of credit institutions are laid down in Directives, the ECB should apply the national legislation transposing those Directives. Where the relevant Union law is composed of Regulations and in areas where, on the date of entry into force of this Regulation, those Regulations explicitly grant options for Member States, the ECB should also apply the national legislation exercising such options. Such options should be construed as excluding options available only to competent or designated authorities. This is without prejudice to the principle of the primacy of Union law. It follows that the ECB should, when adopting guidelines or recommendations or when taking decisions, base itself on, and act in accordance with, the relevant binding Union law.’

8.        The first subparagraph of Article 4(3) of Regulation No 1024/2013 provides:

‘For the purpose of carrying out the tasks conferred on it by this Regulation, and with the objective of ensuring high standards of supervision, the ECB shall apply all relevant Union law, and where this Union law is composed of Directives, the national legislation transposing those Directives. Where the relevant Union law is composed of Regulations and where currently those Regulations explicitly grant options for Member States, the ECB shall apply also the national legislation exercising those options.’

2.      Directive 2014/59

9.        Recital 39 of Directive 2014/59 states:

‘During the recovery and early intervention phases laid down in this Directive, shareholders should retain full responsibility and control of the institution except when a temporary administrator has been appointed by the competent authority.’

10.      Recital 40 of that directive includes the following statement:

‘In order to preserve financial stability, it is important that competent authorities are able to remedy the deterioration of an institution’s financial and economic situation before that institution reaches a point at which authorities have no other alternative than to resolve it. To that end, competent authorities should be granted early intervention powers, including the power to appoint a temporary administrator, either to replace or to temporarily work with the management body and senior management of an institution. The task of the temporary administrator should be to exercise any powers conferred on it with a view to promoting solutions to redress the financial situation of the institution. The appointment of the temporary administrator should not unduly interfere with rights of the shareholders or owners or procedural obligations established under Union or national company law and should respect international obligations of the Union or Member States, relating to investment protection …’

11.      Article 28 of Directive 2014/59, which has the heading ‘Removal of senior management and management body’, provides:

‘Where there is a significant deterioration in the financial situation of an institution or where there are serious infringements of law, of regulations or of the statutes of the institution, or serious administrative irregularities, and other measures taken in accordance with Article 27 are not sufficient to reverse that deterioration, Member States shall ensure that competent authorities may require the removal of the senior management or management body of the institution, in its entirety or with regard to individuals. The appointment of the new senior management or management body shall be done in accordance with national and EU law and be subject to the approval or consent of the competent authority.’

12.      Article 29 of Directive 2014/59, which has the heading ‘Temporary administrator’, provides:

‘1.      Where replacement of the senior management or management body as referred to in Article 28 is deemed to be insufficient by the competent authority to remedy the situation, Member States shall ensure that competent authorities may appoint one or more temporary administrators to the institution. Competent authorities may, based on what is proportionate in the circumstances, appoint any temporary administrator either to replace the management body of the institution temporarily or to work temporarily with the management body of the institution and the competent authority shall specify its decision at the time of appointment. If the competent authority appoints a temporary administrator to work with the management body of the institution, the competent authority shall further specify at the time of such an appointment the role, duties and powers of the temporary administrator and any requirements for the management body of the institution to consult or to obtain the consent of the temporary administrator prior to taking specific decisions or actions. The competent authority shall be required to make public the appointment of any temporary administrator except where the temporary administrator does not have the power to represent the institution. Member States shall further ensure that any temporary administrator has the qualifications, ability and knowledge required to carry out his or her functions and is free of any conflict of interests.

2.      The competent authority shall specify the powers of the temporary administrator at the time of the appointment of the temporary administrator based on what is proportionate in the circumstances. Such powers may include some or all of the powers of the management body of the institution under the statutes of the institution and under national law, including the power to exercise some or all of the administrative functions of the management body of the institution. The powers of the temporary administrator in relation to the institution shall comply with the applicable company law.

3.      The role and functions of the temporary administrator shall be specified by [the] competent authority at the time of appointment and may include ascertaining the financial position of the institution, managing the business or part of the business of the institution with a view to preserving or restoring the financial position of the institution and taking measures to restore the sound and prudent management of the business of the institution. The competent authority shall specify any limits on the role and functions of the temporary administrator at the time of appointment.

4.      Member States shall ensure that the competent authorities have the exclusive power to appoint and remove any temporary administrator. The competent authority may remove a temporary administrator at any time and for any reason. The competent authority may vary the terms of appointment of a temporary administrator at any time subject to this Article.

5.      The competent authority may require that certain acts of a temporary administrator be subject to the prior consent of the competent authority. The competent authority shall specify any such requirements at the time of appointment of a temporary administrator or at the time of any variation of the terms of appointment of a temporary administrator.

In any case, the temporary administrator may exercise the power to convene a general meeting of the shareholders of the institution and to set the agenda of such a meeting only with the prior consent of the competent authority.

6.      The competent authority may require that a temporary administrator draws up reports on the financial position of the institution and on the acts performed in the course of its appointment, at intervals set by the competent authority and at the end of his or her mandate.

7.      The appointment of a temporary administrator shall not last more than one year. That period may be exceptionally renewed if the conditions for appointing the temporary administrator continue to be met. The competent authority shall be responsible for determining whether conditions are appropriate to maintain a temporary administrator and justifying any such decision to shareholders.

8.      Subject to this Article the appointment of a temporary administrator shall not prejudice the rights of the shareholders in accordance with Union or national company law.

9.      Member States may limit the liability of any temporary administrator in accordance with national law for acts and omissions in the discharge of his or her duties as temporary administrator in accordance with paragraph 3.

10.      A temporary administrator appointed pursuant to this Article shall not be deemed to be a shadow director or a de facto director under national law.’

B.      National law

13.      Directive 2014/59 was transposed into Italian law by Decreto legislativo No 181 of 16 November 2015 (‘Legislative Decree No 181’). (¹¹)

14.      Article 8 of Law No 114 of 9 July 2015, (¹²) which lays down the necessary principles and guidelines for the exercise of powers, provides inter alia:

‘1.      In the exercise of the power to transpose Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council, the Government shall be required to comply with, in addition to the principles and guidelines referred to in Article 1(1), those set out in Directive 2014/59/EU and the following specific principles and guidelines:

(a)      guaranteeing consistency and compatibility between the national legislation transposing the directive and the European legal framework for banking supervision, crisis management and protection of depositors, ensuring in particular that the options provided for in Directive 2014/59/EU are exercised in accordance with the provisions of Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010;

…’

15.      The TUB and credit (Testo unico bancario; ‘the TUB’) (¹³) was amended by Legislative Decree No 181. In Section 01-I, headed ‘Early intervention measures’, Article 69octiesdecies was inserted, paragraph 1(b) of which reads as follows:

‘The Banca d’Italia [(Italian Central Bank)] may take the following measures in respect of a bank or the parent company of a banking group:

…

(b)      removal of the actors referred to in Article 69viciessemel where there are serious infringements of law, of administrative regulations or of the statutes, where they are serious administrative irregularities or where the deterioration in the situation of the bank or banking group is particularly significant, provided that the measures referred to in (a) or provided for in Articles 53bis and 67ter are not sufficient to remedy the situation.’

16.      Article 69viciessemel of the TUB empowers the supervisory authority to remove individual members of the management and supervisory bodies and of the board of directors.

17.      Article 70(1) of the TUB, inserted into Section I under the heading ‘Special administrator’, provides:

‘The Banca d’Italia may order the dissolution of the bodies exercising the management and supervision functions of banks in the event of infringements or irregularities within the meaning of Article 69octiesdecies(1)(b), if serious financial losses are expected or where dissolution is requested by reasoned application from the management bodies or by an extraordinary general meeting.’

III. Background to the dispute

A.      Facts

18.      The bank is a credit institution established in Italy which is listed on the stock exchange and has been subject to direct prudential supervision by the ECB since 2014. It accumulated losses of more than EUR 1.6 billion between December 2014 and 1 January 2019. When her action was brought before the General Court, Ms Corneli held 200 000 ordinary shares, corresponding to 0.000361% of the bank’s share capital.

19.      From 2016 to the end of 2018, the ECB adopted several unsuccessful measures for the recapitalisation and stabilisation of the bank to enable it to comply again with the own funds requirements within the meaning of Article 27(1) of Directive 2014/59. (¹⁴)

20.      By the first contested decision of 1 January 2019, based on Articles 69octiesdecies, 70 and 98 of the TUB in conjunction with Article 29 of Directive 2014/59, the ECB placed the bank under temporary administration (also ‘the decision to place the bank under temporary administration’) and, in particular, ordered the following measures:

–        the bank’s board of directors was dissolved and the former members were replaced by three temporary directors, including M. and I., who had previously been the chairman and the managing director of that board of directors;

–        the bank’s supervisory committee was dissolved and the former members were replaced by three other persons;

–        the mandate to ‘take the necessary steps to ensure that [the bank] once again complies with asset requirements on a sustainable basis was assigned to the new bodies’.

21.      On 2 January 2019, the ECB and the bank announced by simultaneous press releases the adoption of the decision to place the bank under temporary administration. The Commissione Nazionale per le Società e la Borsa (National Companies and Stock Exchange Commission, Italy) thereupon suspended trading of securities issued and guaranteed by the bank ‘until the entry into force of [this] decision or until the restoration, in particular as a result of the competent supervisory authorities’ new initiatives, of a comprehensive disclosure framework for securities issued or guaranteed by the bank’.

22.      By the second contested decision of 29 March 2019, the ECB extended the period of temporary administration until 30 September 2019 (also ‘the first extension decision’). This was announced by the bank in a press release on 30 March 2019.

23.      By decision of 30 September 2019, the ECB extended the period of temporary administration until 31 December 2019 (‘the second extension decision’).

24.      By decision of 20 December 2019, the ECB extended the period of temporary administration until 31 January 2020 in order to allow for conclusion of the operation to strengthen the capital base (‘the third extension decision’).

25.      As both parties stated in reply to the written and oral questions posed by the Court of Justice, the bank was recapitalised by the Fondo Interbancario di Tutela dei Depositi (FITD) (¹⁵) in September 2019 under a framework agreement concluded by one of the temporary administrators and approved by the extraordinary general meeting of the bank. The FITD sold its shares in the bank to BPER Banca S.p.a. in summer 2022. As a result of the subsequent ‘squeeze-out’ procedure, Ms Corneli had to sell her shares in September 2022 and therefore lost her status as a (minority) shareholder in the bank.

B.      The judgment under appeal

26.      By application lodged at the Registry of the General Court on 11 July 2019, Ms Corneli brought an action for annulment against the contested decisions. The Commission supported the ECB’s claim for the dismissal of the action as an intervener.

27.      By the judgment under appeal, the General Court annulled the contested decisions. It dismissed the action as to the remainder in so far as it was directed, in general, against any consequent or subsequent act – in relation to the first contested decision – including the second and third extension decisions.

28.      The General Court rejected the plea of inadmissibility raised by the ECB and supported by the Commission on the ground that, as a minority shareholder in the bank, Ms Corneli is directly and individually concerned by the contested decisions for the purposes of the fourth paragraph of Article 263 TFEU and has an interest in bringing proceedings. She therefore has legal standing to bring proceedings. (¹⁶)

29.      On the substance, the General Court found, in essence, that the ECB had adopted the contested decisions on an insufficient legal basis. They were based on a ‘significant deterioration in the situation of [the bank]’ within the meaning of Article 70(1) of the TUB, which transposed Article 29 of Directive 2014/59, even though that (national) provision did not include any such condition. Such a condition could be found only in Article 69octiesdecies(1)(b) of the TUB, which transposed Article 28 of the directive. The latter (national) provision governed only the ‘removal’ of the bank’s management or supervisory bodies, but not the power – provided for in Article 70 of the TUB – to place the bank under temporary administration through the ‘dissolution’ of those bodies. Articles 69octiesdecies and 70 of the TUB therefore concerned different situations and – in the light of the wording of Articles 28 and 29 of Directive 2014/59 – measures to be taken in succession with differing degrees of intervention depending on the various exhaustive (alternative) conditions. The condition of ‘deterioration in the situation of the bank’ did not therefore apply to measures under Article 70 of the TUB, with the result that the ECB had infringed that provision. (¹⁷)

30.      On the basis of the clear wording of Articles 69octiesdecies and 70 of the TUB and the terms used therein, an interpretation in compliance with EU law was also not possible in the view of the General Court. The measure adopted by the ECB was the measure provided for in Article 70 of the TUB, with the result that the conditions under that provision had to be satisfied. (¹⁸) The ‘deterioration in the situation of the bank’ provided for in Article 69octiesdecies of the TUB was ‘not a generic expression, but rather a condition laid down by legislation that refers to an exhaustive list of four alternative conditions’, and could not therefore justify a measure under Article 70 of the TUB. (¹⁹)

31.      In addition, the ECB was not required to apply Directive 2014/59 with the purpose, in the case of a significant deterioration in the situation of the bank, of placing it under temporary administration. Nor did this follow from its obligation under Article 4(3) of Regulation No 1024/2013 to apply the national law adopted to transpose directives. That provision could not be understood ‘as having two distinct sources of obligations, namely EU law in its entirety, including directives, to which the national law transposing them should be added’. According to the General Court, such an interpretation would imply ‘that the national provisions differ from directives and that, in such a case, the two types of document are binding on the ECB as separate legislative sources’. (²⁰) However, this would be contrary to Article 288 TFEU. Furthermore, a directive could not impose obligations on an individual. Therefore, the error made by the ECB also could not be remedied by a free interpretation of Article 70 of the TUB in the light of Directive 2014/59. (²¹)

32.      The General Court did not examine the other six pleas identified by it. (²²)

33.      In so far as, by the words ‘any consequent or subsequent act’ in the application, in the reply and in a further letter, Ms Corneli also objected to the second and third extension decisions, the General Court rejected that claim as inadmissible on grounds of a lack of precision and failure to satisfy the conditions in Article 76(d) and Article 86 of its Rules of Procedure because the application did not make sufficient reference to it. (²³)

IV.    Procedure before the Court of Justice and forms of order sought

34.      By document lodged at the Registry of the Court of Justice on 21 December 2022, the ECB brought the appeal in Case C‑777/22 P.

35.      By document lodged at the Registry of the Court of Justice on 22 December 2022, the Commission brought the appeal in Case C‑789/22 P.

36.      In response to requests made by the Commission and the ECB on 18 and 20 January 2023, the President of the Court of Justice decided, on 8 February 2023, to join Cases C‑777/22 P and C‑789/22 P pursuant to Article 54 of the Rules of Procedure of the Court of Justice.

37.      By document lodged at the Registry of the Court of Justice on 20 March 2023, Italy applied, pursuant to Article 40(1) of the Statute of the Court of Justice of the European Union, for leave to intervene in support of the form of order sought by the ECB and the Commission. By decision of 17 April 2023, the President of the Court of Justice allowed that application. Italy lodged its statement in intervention on 26 May 2023.

38.      The ECB, supported by Italy, claims that the Court should:

–        set aside the judgment under appeal in so far as it annuls the contested decisions;

–        dismiss the action for annulment as inadmissible;

–        in the alternative, declare that the contested decisions are lawful and, if necessary, refer the case back to the General Court for a decision on the pleas not examined in the judgment under appeal;

–        order Ms Corneli to pay the costs incurred by the ECB at first instance and on appeal.

39.      The Commission, supported by Italy, claims that the Court should:

–        set aside the judgment under appeal;

–        dismiss the action for annulment as inadmissible and unfounded;

–        order Ms Corneli to pay the costs at both instances;

–        in the alternative, set aside the judgment under appeal and refer the case back to the General Court.

40.      Ms Corneli contends that the Court should:

–        dismiss the appeals as inadmissible and uphold the judgment under appeal;

–        in the alternative, uphold the pleas not examined by the General Court, or

–        in the further alternative, refer the case back to the General Court for reconsideration.

41.      In response to requests made by the ECB and Italy on 3 and 6 November 2023, the joined cases were assigned to the Grand Chamber of the Court of Justice on 7 May 2024.

42.      On 7 May 2024, the Court asked the parties to respond in writing to certain questions, which they did within the time limits set.

43.      At the hearing on 25 June 2024, the parties presented oral argument and answered the questions put by the Court.

V.      Assessment

A.      Overview of the grounds of appeal and order of examination

44.      In Case C‑777/22 P, the ECB, supported by Italy, puts forward two grounds of appeal.

45.      By the first ground of appeal, the ECB complains that the General Court made several errors of law in assessing ‘direct and individual concern’ in respect of Ms Corneli within the meaning of the fourth paragraph of Article 263 TFEU and her interest in bringing proceedings. By the second ground of appeal, the ECB alleges that the General Court erred in law in assessing the legal bases on which the contested decisions were adopted; that assessment should have been made, in accordance with the first subparagraph of Article 4(3) of Regulation No 1024/2013, by reference to the whole body of applicable national law and its interpretative methods. This holds in particular for Article 69octiesdecies(1)(b) and Article 70(1) of the TUB as interpreted by the Italian courts.

46.      In Case C‑789/22 P, the Commission, supported by Italy, puts forward five grounds of appeal, which to some extent overlap with those raised by the ECB.

47.      By the first ground of appeal, the Commission claims that the General Court made the same errors of law in applying the fourth paragraph of Article 263 TFEU as were alleged by the ECB in its first ground of appeal. By its second ground of appeal, the Commission alleges that the General Court erred in law in applying Article 84 of its Rules of Procedure by unlawfully raising a substantive legal defect of its own motion and ruling ultra petita. By its third ground of appeal, which is similar to the second ground of appeal raised by the ECB, the Commission objects to a purported error of law in the interpretation of the first subparagraph of Article 4(3) of Regulation No 1024/2013 and Article 70(1) of the TUB. The fourth ground of appeal concerns an infringement of the third paragraph of Article 288 TFEU, alleging that the General Court erred in law in considering that Article 70(1) of the TUB could not be interpreted in accordance with Article 29 of Directive 2014/59. Lastly, by its fifth ground of appeal, which is likewise similar to the second ground of appeal raised by the ECB, the Commission alleges that the General Court made several errors of law in assessing the relationship between national law and directives, including infringements of the first subparagraph of Article 4(3) of Regulation No 1024/2013 and the second and third paragraphs of Article 288 TFEU, and disregarded the direct applicability of the relevant provisions of the directive.

48.      I will begin by examining together the grounds of appeal concerning the admissibility of the action (²⁴) (under B). I will then consider, also together, the grounds of appeal relating to the General Court’s substantive assessments (²⁵) (under C).

B.      Grounds of appeal concerning the admissibility of the action

49.      The grounds of appeal regarding the admissibility of the action concern, first, the question whether the contested decisions are of direct and individual concern to Ms Corneli within the meaning of the fourth paragraph of Article 263 TFEU (under 1) and, second, her (continuing) interest in having them annulled (under 2).

50.      It should be borne in mind in this regard that the Court of Justice must consider the admissibility of the action, including the continuation of the interest in bringing proceedings – irrespective of the arguments put forward by the parties and the assessment by the General Court – of its own motion in appeal proceedings. (²⁶) For this reason alone, the plea of inadmissibility relied on by Ms Corneli in respect of the first ground of appeal raised by the ECB cannot succeed and must be rejected.

1.      Legal standing to bring proceedings under the fourth paragraph of Article 263 TFEU

51.      Under the fourth paragraph of Article 263 TFEU, persons who are not addressees of the contested measure have legal standing to bring proceedings only if that measure is of ‘direct and individual concern’ to them. I will first examine whether the contested decisions are of direct concern to Ms Corneli.

(a)    Direct concern

52.      It is apparent from settled case-law that two conditions must be fulfilled cumulatively for a person to be regarded as ‘directly concerned’ for the purposes of the fourth paragraph of Article 263 TFEU. First, the contested measure must directly affect the legal situation of the person concerned. Second, the measure may leave no discretion to the addressees who are entrusted with the task of implementing it, such that its implementation is purely automatic. This must result from EU rules alone without the application of other intermediate rules. (²⁷)

53.      As the General Court correctly stated with reference to that case-law, (²⁸) the contested decisions directly affect the legal situation of Ms Corneli detrimentally as a shareholder in the bank. This concerns the exercise of her participation, voting and other rights laid down in the bank’s statutes. Contrary to the complaints put forward by the ECB, no disregard, let alone distortion, of the relevant rules of the bank’s statutes relating to the rights of shareholders is discernible. In particular, the contested decisions affect the rights to elect the management and supervisory bodies of the bank (Articles 18 and 26), to convene the general meeting of shareholders and to set the agenda (Article 10(4)). This also applies to the conditions under which that general meeting or a certain proportion of the shareholders may hold the management and supervisory bodies of the bank liable under Articles 2393 and 2393bis of the Italian Civil Code. (²⁹)

54.      By placing the bank under temporary administration and extending that measure, the contested decisions suspended or restricted the exercise of those rights and thus directly interfered with the legal situation of the shareholders, including that of Ms Corneli. By that measure, the rights to elect the management and supervisory bodies of the bank and to convene the general meeting of shareholders and to set its agenda were transferred to the temporary administrators. The associated suspension or restriction of the relevant participation or voting rights of the shareholders follows from Article 70(2) in conjunction with Article 72(6) of the TUB, which provides for those rights to be transferred automatically to the temporary administrators. (³⁰) In addition, by placing the bank under temporary administration pursuant to Article 72(9) of the TUB, the civil liability of the management and supervisory bodies of the bank was limited to cases of intentional fault or serious misconduct and could be brought before the courts only by the temporary administrators after prior approval by the Banca d’Italia. Furthermore, those administrators were given the right under Article 72(5) of the TUB, after prior approval by the Banca d’Italia, to bring actions for damages against members of the dissolved bodies of the bank or its managing director. The general meeting of the shareholders or some of them who hold a certain proportion of the share capital were therefore no longer able to bring such actions under Articles 2393 and 2393bis of the Italian Civil Code. (³¹)

55.      The General Court rightly considered there to be an interference with the participation or voting rights of the shareholders, including Ms Corneli’s, irrespective of the fact that the bank’s statutes provide for a quorum, namely 1% of the shares held by those shareholders, in order for them to be exercised effectively in some cases. (³²) All these participation or voting rights, like a citizen’s right to vote in democratic elections, have an inherent value, regardless of whether the exercise of those rights is actually sufficient to influence the bank’s key organisational or business decisions. The participation or voting rights include and protect the legal possibility to participate in such decision-making processes and to influence their outcome. This was rightly recognised by the General Court when it found that the argument of the ECB and the Commission ‘disregards … the right to vote which allows each shareholder to participate individually in the election of members [of the general meeting] who will sit in management and supervisory bodies’. (³³) Because the bank was placed under temporary administration, however, this legal possibility of influencing its management automatically disappears.

56.      It is therefore irrelevant to the question whether a minority shareholder’s participation or voting rights have been adversely affected as such that he or she may be able to achieve the relevant quorums only with other (minority) shareholders. The possibility of achieving a quorum is significant only to the subsequent question whether the exercise of participation or voting rights is also sufficient to achieve the desired legal effects (such as convening the general meeting or setting an agenda for the meeting). This cannot, however, call into question either the existence of those individual rights or the need to protect their exercise. (³⁴) Consequently, as the General Court correctly found in paragraphs 43 to 45 of the judgment under appeal, the appellants’ objection that the respective decision-making rights belong only to the general meeting or some of the shareholders who meet a certain shareholding criterion, but not the individual shareholder holding only voting rights, must also be rejected.

57.      Furthermore, in the judgment in Trasta Komercbanka, (³⁵) the Court of Justice indirectly confirmed that in a case like the present one where – unlike the withdrawal of authorisation at issue in that case – a bank is merely placed under temporary administration, the adverse effect on shareholders’ rights to participate in management may be sufficient to regard them as directly concerned. This is because in the latter case the adverse effect on those rights is not consistent with the negative, purely economic effects on the bank and its shareholders that would result from the withdrawal of its authorisation or even its liquidation. (³⁶) The Court of Justice also expressly recognised that even the decision to liquidate a bank directly affects the right of the shareholders to participate in its management, since it entrusted that right to the liquidator. However, that decision in the Trasta Komercbanka case was based exclusively on Latvian law. It could not therefore be attributed either to EU law or to the contested decision of the ECB on the withdrawal of authorisation, with the result that the shareholders were not directly concerned by that decision. (³⁷) That said, as the General Court rightly held, (³⁸) the situation is different in the case of an ECB decision to place a bank under temporary administration.

58.      The ECB cannot rebut these conclusions by making reference to the judgment of the European Court for Human Rights (‘ECtHR’) in Albert and Others v. Hungary. (³⁹)

59.      First, the power to lodge an application under Article 34 ECHR, which was examined by the ECtHR, is not identical to the conditions governing legal standing to bring proceedings under the fourth paragraph of Article 263 TFEU. Second, the ECtHR recognises, in principle, that the shareholders of a bank are ‘directly affected’ for the purposes of Article 34 ECHR if the complaint is brought against measures affecting both that bank and the rights of its shareholders. That principle is limited only where either the bank and its shareholders are so closely identified with each other that it would be artificial to distinguish between the two or if that is warranted by ‘exceptional circumstances’. Therefore, the ECtHR, like the Court of Justice in the judgment in Trasta Komercbanka (see point 57 above), recognised that acts directly affecting the rights of shareholders (to participate in the management of the bank) are distinct from measures directed (only) against the bank. Such acts not only harm the economic interests of the shareholders of that bank but also alter their legal position in its governance structure. (⁴⁰)

60.      In the judgment in Albert and Others v. Hungary, the ECtHR did not consider that the rights of shareholders were ‘directly affected’. First, they could exercise those rights in respect of the contested merger of the two banks concerned during the associated decision-making process and voting. Second, because the size of the individual shareholdings was too small, those rights were insufficient to control any of the banks. The ECtHR therefore considered – by contrast with the cases previously decided by it concerning the artificial dilution of a shareholder’s voting power or the outright cancellation of shares (⁴¹) – that the measures at issue, which essentially related to corporate matters, had only an ‘incidental and indirect’ bearing on the rights of individual shareholders as such. (⁴²)

61.      The particular situation of the merger of two banks is not, however, comparable to the situation in the present case, where a bank is merely placed under temporary administration. The two merged banks ceased existing in their previous form and operating on the market. A definitive structural change to a bank and its business activities and the associated economic effects are therefore different from temporary administration, where supervision of a bank’s business activities is transferred to a third party only temporarily, and from its effects on shareholders’ rights. The ECB’s argument based on the case-law of the ECtHR concerning bank mergers is not therefore applicable in this case and must be rejected.

62.      The participation or voting rights of the shareholders of the bank were, moreover, automatically suspended and restricted by the bank being placed under temporary administration and the extension of that measure in the contested decisions. An intermediate discretionary decision or additional implementing act was not required. (⁴³) Consequently, the General Court could find, without erring in law, that those decisions were of direct concern to Ms Corneli within the meaning of the fourth paragraph of Article 263 TFEU. (⁴⁴)

(b)    Individual concern

63.      The question whether Ms Corneli also satisfies the criterion of individual concern must be examined only if the contested decisions do not constitute a ‘regulatory act’ within the meaning of the third limb of the fourth paragraph of Article 263 TFEU which does not entail implementing measures. According to settled case-law, that concept extends to all non-legislative acts of general application. This requires that such an act applies to objectively determined situations and produces legal effects with respect to categories of persons envisaged in a general and abstract manner. (⁴⁵)

64.      That condition is not met in this case. The contested decisions were addressed directly to the bank, which is a legal person, and also concerned the number of shareholders existing at the time they were adopted. It must therefore be examined whether Ms Corneli satisfied the criterion of individual concern in her capacity as a shareholder at the time.

65.      In my view, the General Court rightly recognised such individual concern in respect of Ms Corneli with reference to the case-law of the Court of Justice. (⁴⁶)

66.      According to settled case-law, persons other than those to whom a measure is addressed are individually concerned by it only if the measure affects them by reason of certain attributes which are peculiar to them or by reason of circumstances in which they are differentiated from all other persons and by virtue of those factors distinguishes them individually just as in the case of the person addressed. (⁴⁷) In the case of abstract/general measures in particular, the Court of Justice has held that the more or less precisely determinable number, or even the identity, of the persons to whom a measure applies is not sufficient for it to be regarded as being of individual concern to them where it is established that that application takes effect by virtue of an objective legal or factual situation defined by it. (⁴⁸)

67.      As the General Court rightly explained, (⁴⁹) Ms Corneli was distinguished individually in her capacity as a shareholder and thus as a member of the clearly defined group of all shareholders in the bank at the time when the contested (specific/individual) decisions were taken. In addition, those decisions interfered with the exercise of her participation and voting rights granted in that capacity by the bank’s statutes (see point 53 et seq. above). They therefore concerned Ms Corneli not only in her ‘objective’ capacity as a shareholder (in relation to shareholders in other companies), as the appellants claim, but as an owner of some of the share capital of the bank, who was clearly identifiable at that time. Furthermore, the specific purpose of that measure was to suspend the participation and voting rights of the shareholders in the bank (and not those of shareholders in other companies) (see point 54 above) in order to facilitate its recovery.

68.      This assessment cannot be called into question by the argument put forward mainly by the ECB that around 35 000 shareholders in the bank should therefore be regarded as individually concerned and having legal standing to bring proceedings. As the General Court rightly held, the number of potential applicants concerned, depending on the type of the contested measure, is irrelevant if, at the time when it is adopted, they are clearly identifiable as members of a clearly defined group of persons and that measure (purposefully) interferes with their existing rights. (⁵⁰) This holds a fortiori in the present case as the contested decisions are not measures of general application, but are specific/individual in nature (see points 64 and 66 above).

69.      The General Court therefore rightly held that the contested decisions were of individual concern to Ms Corneli within the meaning of the fourth paragraph of Article 263 TFEU. Consequently, there is no need to address the question whether the additional reasoning in respect of which the Commission raises complaints, in particular in paragraphs 73 to 75 of the judgment under appeal (in response to its submissions at first instance), is vitiated by an error of law.

2.      Continuation of the interest in bringing proceedings

70.      It must still be examined whether, in view of the termination of the temporary administration of the bank and the undeniable loss of her capacity as a shareholder, Ms Corneli is still able to claim, and has demonstrated, an interest (in bringing proceedings) with a view to the annulment of the contested decisions.

71.      The General Court did examine Ms Corneli’s own interest in bringing proceedings, which can be distinguished from that of the bank, and considered it to exist on the ground that the contested decisions affected the exercise of her rights as a shareholder. (⁵¹) That concerns in particular the rights to convene a general meeting in order to propose the bringing of an action or to add a point to that effect to its agenda. (⁵²) This distinguishable interest in bringing proceedings for Ms Corneli is justified in her claim specifically on the ground of safeguarding the participation and voting rights connected with her status under company law as a shareholder. However, in this regard the General Court, in essence, merely reiterated the reasoning for direct concern in respect of Ms Corneli (see point 53 et seq. above), without addressing the question whether, in view of the expiry of the period for the temporary administration of the bank provided for in the first extension decision, Ms Corneli continued to have such an interest in bringing proceedings until the date of delivery of the judgment under appeal. Nor did it require her to provide proof in this regard.

72.      The question whether an applicant has established his or her interest in bringing proceedings and the continuation of that interest is a question of law –which must be distinguished from establishing legal standing to bring proceedings within the meaning of the fourth paragraph of Article 263 TFEU – which comes within the scope of the Court of Justice’s review in the context of an appeal. (⁵³)

73.      According to settled case-law, an action for annulment brought by a natural or legal person is admissible only if that person has an interest in having the contested act annulled. The annulment must be capable of procuring an advantage for that person. That interest in bringing proceedings as an essential prerequisite for the admissibility of the action must continue until the final decision, failing which there will be no need to adjudicate. (⁵⁴)

74.      It is settled case-law that the continued existence of an interest in bringing proceedings may be based on the fact that a judgment annulling the measure in question would support the preparation of an action for damages. (⁵⁵) According to that case-law, the possibility of bringing an action for damages suffices to justify such an interest in bringing proceedings, in so far as that interest is not hypothetical. (⁵⁶) It is immaterial in this regard whether the actions brought before the EU Courts or the national courts are likely to be well founded or have the same subject matter. Rather, the crucial factor is whether the annulment sought of the contested act has an effect on that other action, (⁵⁷) that is to say, may be at least partially a preliminary issue in this regard.

75.      In response to the written and oral questions posed by the Court of Justice, Ms Corneli submitted that her interest in bringing proceedings, based on the loss of her shares and participation or voting rights as a shareholder in the bank, continued in particular with a view to future actions for damages. She intends to bring such an action against the bodies and legal and natural persons involved in placing the bank under temporary administration, in its restructuring and in the sale of her shares; the annulment of the contested decisions by the EU Courts is a preliminary issue. In this regard, she rightly argued that the five-year period of limitation under Article 46 of the Statute of the Court of Justice for bringing an action for damages against, inter alia, the ECB pursuant to Article 268 in conjunction with the third paragraph of Article 340 TFEU has not yet expired. (⁵⁸)

76.      The definitive loss of the shares and participation or voting rights as such which has now occurred as a result of the restructuring of the bank can neither be attributed directly to the contested decisions, which merely place it under temporary administration, nor justify Ms Corneli’s interest in having them annulled. (⁵⁹) Such an interest did exist, however, during the period of temporary administration when she was no longer able to exercise her participation or voting rights as a shareholder (see point 71 above).

77.      Ms Corneli considers that – in addition to the definitive loss of her shares and participation or voting rights – the interference with the latter rights during the period of temporary administration also caused the damage suffered by her. In any event, such causality does not appear to be either hypothetical or completely ruled out in the light of the measures described by her and the ECB in response to the written questions posed by the Court of Justice, which were taken during the period of temporary administration in 2019 and 2020 and ultimately led to the recapitalisation of the bank by the FITD and the sale of its shares to BPER Banca (see point 25 above). Because of the discretion accorded to national courts in determining whether the conditions governing liability under the national rules on damages are satisfied, including causality between the unlawful act and the damage incurred, it is not the task of the EU Courts to examine these questions closely in assessing the continuation of the interest in bringing proceedings, let alone to rule out such causality a priori (see point 74 above). Rather, it is sufficient to state that the annulment of the contested decisions – which could possibly be confirmed by the Court of Justice – on the basis of the pleas of illegality raised by Ms Corneli may be a preliminary issue to subsequent actions for damages.

78.      Ms Corneli therefore has a continuing interest in having the contested decisions annulled with a view to the preparation of an action for damages before the national courts or the EU Courts pursuant to the second paragraph of Article 263 in conjunction with the first paragraph of Article 264 TFEU.

3.      Interim conclusion

79.      In view of Ms Corneli’s continuing interest in bringing proceedings and legal standing to bring proceedings under the fourth paragraph of Article 263 TFEU, the General Court was therefore permitted to declare her action for annulment to be admissible.

80.      Consequently, the first ground of appeal raised by the ECB and by the Commission must be rejected as unfounded.

C.      Grounds of appeal concerning the substance of the action: infringement of the first subparagraph of Article 4(3) of Regulation No 1024/2013 in conjunction with Article 29 of Directive 2014/59 and Article 70(1) of the TUB?

1.      Order of examination

81.      The second ground of appeal raised by the ECB and the second to fifth grounds of appeal raised by the Commission relate, in essence, to whether the General Court misunderstood the first subparagraph of Article 4(3) of Regulation No 1024/2013 in conjunction with Articles 28 and 29 of Directive 2014/59 and Article 69octiesdecies(1)(b) and Article 70(1) of the TUB in finding that those provisions did not form a sufficient legal basis for placing the bank under temporary administration and extending that measure in the contested decisions. In this regard, the General Court rejected the direct application of the provisions of the directive to the bank and an interpretation of those national provisions in compliance with the directive. (⁶⁰)

82.      By the second ground of appeal raised by the ECB and the third and fourth grounds of appeal raised by the Commission, it is further alleged, in essence, that the General Court misunderstood Article 70(1) of the TUB and the fact that that provision can be interpreted in compliance with the directive, namely in accordance with Article 29 of Directive 2014/59. By the fourth and the fifth grounds of appeal, the Commission complains that this also resulted in the General Court infringing the second and third paragraphs of Article 288 TFEU and the first subparagraph of Article 4(3) of Regulation No 1024/2013, inter alia because it disregarded the ECB’s obligation under that provision to apply Article 29 of the directive directly. At the hearing, the ECB also argued, in response to the written and oral questions posed by the Court, that that provision of the directive is directly and primarily applicable. It must therefore be complied with not only by national authorities but also by the ECB and the General Court. Both Ms Corneli and Italy made submissions on this point at the hearing.

83.      I will examine these complaints together below. In doing so, I will also consider whether the General Court infringed the second and third paragraphs of Article 288 TFEU and Article 84 of its Rules of Procedure (second, fourth and fifth grounds of appeal raised by the Commission).

84.      Since, under the first subparagraph of Article 4(3) of Regulation No 1024/2013, the ECB is obliged to apply the relevant EU law, including national law adopted to transpose the law set out in directives, (⁶¹) I will begin by considering whether and to what extent this obligation to apply also holds for the first sentence of Article 29(1) of Directive 2014/59. It must be examined whether, in view of its normative structure and legal consequences, that provision is directly applicable to the bank and its shareholders (under 2) and must be complied with and applied not only by the national authorities but also by the ECB and the General Court (under 3). The ECB could have been empowered and possibly even obliged, (⁶²) by virtue of the direct applicability and primacy of this provision of the directive, to place the bank under temporary administration and to disregard the national rules in so far as they were contrary to that provision. The General Court should not then have annulled the contested decisions on grounds of a purported lack of legal basis. In that case, it would no longer be relevant whether those national rules can be interpreted in compliance with the directive.

85.      In the event that the direct application of the first sentence of Article 29(1) of Directive 2014/59 is ruled out, I will then examine whether and to what extent the ECB is obliged to interpret national law adopted to transpose the directive in compliance with that directive (under 4). I will subsequently address the question of how, in its review of the ECB’s acts in this regard, the General Court needs to take into account the significance of national law and, above all, whether, within the scope of the first subparagraph of Article 4(3) of Regulation No 1024/2013, it must treat national law in the same way as EU law (under 5). Lastly, I will consider the admissibility of the related complaints raised by the appellants for the first time at the appeal stage (under 6).

86.      In the judgment under appeal, the General Court rejected both the direct application of provisions of the directive to the detriment of the individual and an interpretation of Article 70(1) of the TUB in compliance with the directive. (⁶³) As I will show below, there can be no objection to this approach, at least as regards the result to which it led.

2.      Direct applicability and primacy of the first sentence of Article 29(1) of Directive 2014/59?

(a)    Normative structure of the first sentence of Article 29(1) of Directive 2014/59

87.      According to settled case-law, in order to be regarded as having direct effect, a provision of a directive must appear, so far as its subject matter is concerned, to be unconditional and sufficiently precise. A provision is unconditional where it sets forth an obligation which is not qualified by any condition, or subject, in its implementation or effects, to the taking of any measure either by the institutions of the European Union or by the Member States. A provision is regarded as sufficiently precise to be relied on by an individual and applied by a court where it sets out an obligation in unequivocal terms. (⁶⁴) If those conditions are met, that provision may be relied upon before the national courts by individuals against the Member State where it has failed to implement the directive correctly. (⁶⁵)

88.      The first sentence of Article 29(1) of Directive 2014/59 requires Member States, where replacement of the senior management or management body as referred to in Article 28 of the directive is deemed to be insufficient by the competent authority (here the ECB), ‘to remedy the situation’, to ensure that those authorities may appoint one or more temporary administrators to the institution. That provision thus lays down a power for the competent authority to take such a measure by reference to the less intrusive measures provided for in Article 28 of the directive – which the ECB deems to be insufficient in the present case – such as the removal of the senior management or management body, in its entirety or with regard to individuals. These measures all require inter alia that there is a significant deterioration in the financial situation of the bank concerned. As is clear from the reference in Article 29 to Article 28 of the directive, from the combined wording of those provisions and recital 40, (⁶⁶) the criterion of significant deterioration in the financial situation is a uniform condition for the application of all the remedial measures with differing degrees of intervention which are laid down in both provisions. Accordingly, both the conditions for the application of the first sentence of Article 29(1) in conjunction with Article 28 of the directive and the legal consequences which it prescribes are sufficiently precise and unconditional.

89.      According to the settled case-law of the Court of Justice, the fact that the competent authorities enjoy a certain margin of appreciation or degree of discretion in assessing whether those conditions are met, on the one hand, and as regards the measures to be taken, on the other, and those measures must be proportionate under the second sentence of Article 29(1) of Directive 2014/59, cannot call into question the sufficiently precise and unconditional nature of those provisions. According to that case-law, such a margin of appreciation or degree of discretion is neither a condition nor an additional requirement in respect of implementation or effects within the meaning of the principles referred to in point 87 above. (⁶⁷)

90.      Rather, according to settled case-law, even though a directive leaves the Member States a degree of latitude when they adopt rules in order to implement it, a provision of that directive may be regarded as unconditional and precise where it imposes on Member States in unequivocal terms a precise obligation as to the result to be achieved, which is not coupled with any condition regarding its application. (⁶⁸) According to that case-law, the unconditional nature of an obligation can therefore compensate for the requirement of precision. (⁶⁹) That is the case here as regards the result to be achieved, namely placing the bank concerned under temporary administration in the case of a significant deterioration in its financial situation which cannot be remedied by less onerous measures for the purposes of Article 28 of the directive.

91.      On the basis of these criteria, the content of the first sentence of Article 29(1) of Directive 2014/59 is therefore to be regarded as sufficiently precise to be able, for example, to be applied by a national supervisory authority and in subsequent legal proceedings by a national court. It also follows, in principle, that those authorities must disapply any national legislation contrary to that provision. (⁷⁰) I will examine further below whether and to what extent this also applies to the ECB (point 106 et seq.). The arguments put forward by Ms Corneli in particular at the hearing, claiming that the directive provides only for minimum harmonisation in this regard and allows Member States broad discretion in its implementation, must therefore be rejected.

92.      In paragraph 112 of the judgment under appeal, however, the General Court found that a directive cannot of itself impose obligations on an individual, with the result that direct application (including of Article 29(1) of Directive 2014/59 and regardless of its normative structure) to the detriment of the individual was precluded.

93.      In my view, this finding, about which the Commission in particular complains, is not vitiated by an error of law.

(b)    Direct applicability of Article 29(1) of Directive 2014/59 to the detriment of the bank and its shareholders?

94.      According to settled case-law, a directive cannot of itself impose obligations on individuals, but can only confer rights. Consequently, an individual may not rely on a directive against a Member State where it is a matter of a State obligation directly linked to the performance of another obligation falling, pursuant to that directive, on a third party. On the other hand, mere adverse repercussions on the rights of third parties, even if the repercussions are certain, do not justify preventing an individual from relying on the provisions of a directive against the Member State concerned. (⁷¹)

95.      Above all, a direct application of provisions of directives is precluded where, through prohibitions and obligations to act or to refrain from acting laid down therein, it determines or aggravates the liability in criminal law of persons. (⁷²) It would be incompatible with the principles of legal certainty and legality of penalties (nullum crimen, nulla poena sine lege) and with the third paragraph of Article 288 TFEU, under which directives are addressed to the Member States and are binding on them alone, to require an individual to base his or her conduct solely on the provisions of a directive – in particular without regard to the national legislation adopted for its implementation – and to make himself or herself possibly subject to liability or punishment in the case of an infringement. (⁷³) Nor is the direct application of provisions of directives which impose an obligation on one party (known as ‘horizontal effect’) possible, in principle, in civil disputes between individuals. (⁷⁴)

96.      The situation is different only for administrative disputes which concern ‘triangular situations’. In this regard, the Court has acknowledged, by way of exception, that a third party must tolerate certain State measures on the basis of directly applicable provisions of a directive on which an individual relies vis-à-vis the Member State. These include, for example, an environmental impact assessment which can result in the revocation of a consent benefiting the third party (⁷⁵) or the loss of some other (legal and financial) benefit to the third party. (⁷⁶) This is merely an adverse repercussion of the implementation of such provisions on the legal position of third parties. It stems solely from the fact that the competent authority must carry out an assessment pursuant to directly applicable provisions of a directive (⁷⁷) or interpret and apply the legal basis used in a certain way vis-à-vis all the persons concerned. (⁷⁸)

97.      The present case is also based on an administrative dispute. However, there are no other grounds that would allow this case-law to be applied or even its scope to be extended.

98.      By contrast with the abovementioned cases, this is not a triangular situation which is merely detrimental to a third party. (⁷⁹) Such a situation might exist if a creditor or a customer of the bank who considers his or her financial interests to be jeopardised on account of the significant deterioration in the financial situation of the bank relied on the first sentence of Article 29(1) of Directive 2014/59 before the competent authorities or courts in order to cause those authorities to place the bank under temporary administration.

99.      However, a direct application of the first sentence of Article 29(1) of Directive 2014/59 to the bank and its shareholders would not result in a mere adverse repercussion on the rights of third parties.

100. In contrast, the present dispute concerns the (bilateral) relationship of subordination, which is the classic situation in administrative law, whereby the bank defends itself against an intervention measure directed against it by a public authority, namely being placed under temporary administration by the ECB. The competence to adopt this measure is among the powers of intervention which the ECB enjoys directly over banks within the single supervisory mechanism. In this respect, the ECB to some extent replaces the national supervisory authorities, including on the basis of the obligation under the first subparagraph of Article 4(3) of Regulation No 1024/2013 to apply national law transposing Directive 2014/59 (for more detailed discussion, see point 107 below). The measures taken by it ultimately result in banks and their shareholders being made subject to certain obligations to act, to refrain from acting or to tolerate certain acts.

101. It cannot be argued in this respect that shareholders like Ms Corneli are third parties in relation to the bank who only have to bear (with her) the detrimental consequences of the bank being placed under temporary administration. This would not be consistent with the fact that there is a considerable overlap between the economic interests of the bank and of its shareholders. This is also an important reason why a separate action brought by the shareholders against an ECB decision to withdraw a bank’s authorisation is inadmissible because those shareholders are not themselves directly concerned (see point 57 et seq. above). (⁸⁰)

102. In so far as the ECB is able to rely solely on a directly applicable provision of a directive, such as the first sentence of Article 29(1) of Directive 2014/59 in this case, as the legal basis for this intervention measure by a public authority, this would therefore result in unlawful obligations being imposed on individuals on the basis of a directive in accordance with the case-law mentioned in points 94 and 95. As is shown by the hierarchy of the measures in Articles 27 to 29 of Directive 2014/59 – which is envisaged for reasons of proportionality – placing a bank under temporary administration is a serious intervention measure which interferes particularly heavily with the bank’s decision-making autonomy. As a result of the measure, the exercise of the rights of its management body and its shareholders to (jointly) decide on banking operations is temporarily suspended and transferred to one or more temporary administrators in the interest of the effective recovery of the bank.

103. Consequently, the obligations of toleration on the bank and its shareholders which are associated with being placed under temporary administration, as the General Court rightly found, (⁸¹) would be the result of an unlawful direct application of this provision of the directive to their detriment, unless those obligations can also be based on the national transposing law, if appropriate in accordance with an interpretation in compliance with the directive.

104. The first sentence of Article 29(1) of Directive 2014/59 is therefore directly applicable in accordance with the criteria recognised in case-law (see points 89 and 90 above). However, such direct application is not possible either to the detriment of the bank or to the detriment of its shareholders. Accordingly, the General Court also cannot be criticised for having infringed the second or third paragraphs of Article 288 TFEU in this regard.

105. Should the Court of Justice not agree with this analysis and take the view that, in principle, the first sentence of Article 29(1) of Directive 2014/59 is directly applicable to the detriment of the bank and its shareholders, such as Ms Corneli, I will examine in the alternative whether not only a national authority but also the ECB was entitled or obliged to apply that provision of the directive directly. That examination is also significant to the question, to be discussed subsequently, whether the ECB is also an addressee of the obligation to interpret national law in compliance with the directive (see point 115 et seq. below).

3.      In the alternative: direct application of the first sentence of Article 29(1) of Directive 2014/59 by the ECB?

(a)    The ECB as an addressee of directly applicable provisions of a directive

106. Under the third paragraph of Article 288 TFEU, directives are addressed to the Member States, which implement them in national law, exercising their discretion in the form and methods with a view to the result to be achieved. Accordingly, only in exceptional cases – under the conditions mentioned in point 94 above – has the case-law of the Court of Justice recognised the direct applicability of provisions of a directive to protect the rights of the individual and the associated obligation of the Member States’ authorities to comply with and implement those provisions.

107. In my view, however, it follows from the ECB’s obligation under the first subparagraph of Article 4(3) of Regulation No 1024/2013 to apply the relevant EU law in its entirety, (⁸²) and the national law adopted, to transpose directives that that institution must, in principle, have regard to the direct applicability and the associated primacy (⁸³) of provisions of directives in exactly the same way as the national supervisory authorities (see point 91 above), even though it is not expressly referred to as an addressee of such provisions in the third paragraph of Article 288 TFEU. Where, in the exercise of its supervisory powers over credit institutions within the single supervisory mechanism, the ECB replaces those supervisory authorities (⁸⁴) and is required even to apply the national law intended to transpose directives, it should be treated in the same way as them as an addressee of those rules. (⁸⁵)

108. This also follows from the principles of maintaining uniformity and the rule of law in the EU legal order (Article 2 TEU), with which the ECB must comply as one of the EU institutions within the meaning of the second paragraph of Article 13 TEU in conjunction with Article 132 TFEU. The objective of the obligation under the first subparagraph of Article 4(3) of Regulation No 1024/2013 to apply the rules is ‘ensuring high standards of supervision’. Only then is it possible to achieve the overarching aim of ‘unity and integrity of the internal market based on equal treatment of credit institutions’ while avoiding regulatory arbitrage, as enshrined in the first paragraph of Article 1 of the regulation. (⁸⁶) Accordingly, under Article 6(1) of the regulation, the EIB is ‘responsible for the effective and consistent functioning of the SSM’.

109. As the present case shows (for further details, see point 115 et seq. below), a different, possibly even non-conforming transposition of Directive 2014/59 in the Member States entails the risk of excessive fragmentation in the implementation of the relevant supervisory rules in the internal market. This could adversely affect the uniform and effective exercise of supervisory powers over credit institutions by the national supervisory authorities and the ECB within the single supervisory mechanism. (⁸⁷) In so far as the national transposing law is contrary to directly applicable provisions of a directive, it must therefore, provided this is permissible to the detriment of individuals, (⁸⁸) be disapplied by all supervisory authorities, including the ECB, in accordance with the principle of the primacy of EU law in order to safeguard those aims. (⁸⁹)

(b)    Consequences of the direct applicability of the first sentence of Article 29(1) of Directive 2014/59 to the detriment of the bank and its shareholders

110. Should the Court, contrary to my recommendation, recognise the direct applicability of the first sentence of Article 29(1) of Directive 2014/59 to the detriment of the bank and its shareholders in this instance, the ECB would therefore – in view of the undisputed significant deterioration in the financial situation of the bank within the meaning of Article 28 of that directive and the insufficient remedial measures taken up to that point – have been not only entitled, but even obliged, under the first subparagraph of Article 4(3) of Regulation No 1024/2013, to place the bank under temporary administration or to extend that measure pursuant to that provision of the directive in conjunction with Article 69octiesdecies(1)(b) and Article 70(1) of the TUB. In so far as Article 70(1) of the TUB does not expressly refer to the condition of deterioration in the financial situation of the bank, but to the qualified condition of expectation of serious financial losses – and this might not be in compliance with the first sentence of Article 29(1) of Directive 2014/59 (for further details, see point 120 et seq. below) –, that national provision would be inapplicable by virtue of the primacy of that (directly applicable) provision of the directive.

111. Under those circumstances, the General Court’s findings in paragraphs 91 to 114 of the judgment under appeal, by which it criticises the ECB for adopting the contested decisions on an insufficient legal basis, would have to be regarded as being vitiated by an error of law. The ECB would then have had to rely on Article 29 of Directive 2014/59 as a legal basis, apply that provision of the directive directly in conjunction with Article 69octiesdecies(1)(b) and Article 70(1) of the TUB and, by virtue of its primacy, disregard the elements of the national provisions that are incompatible with it. This was, in essence, the approach taken by the ECB in that it did not examine the qualified condition of expectation of serious financial losses for the bank provided for in Article 70(1) of the TUB and established only a deterioration in its financial situation (see points 119 and 139 below).

112. The second ground of appeal raised by the ECB, as clarified by it at the hearing, and the fifth ground of appeal raised by the Commission would thus be well founded in this regard and would have to result in the judgment under appeal being set aside.

113. As was explained in point 94 et seq. above, however, I consider such a result to be inappropriate because it requires an unlawful direct application of the first sentence of Article 29(1) of Directive 2014/59 to the detriment of the bank and its shareholders. In case the Court concurs with my analysis, I will also deal with the other grounds of appeal.

114. In particular, should the Court consider, as was proposed in points 94 to 104, that the first sentence of Article 29(1) of Directive 2014/59 may not be applied directly to the detriment of the bank and its shareholders, it must be examined, further, whether Article 69octiesdecies(1)(b) and Article 70(1) of the TUB can and must be interpreted in accordance with that provision of the directive and whether the General Court infringed the third paragraph of Article 288 TFEU by rejecting such interpretation in compliance with the directive (second ground of appeal raised by the ECB and fourth ground of appeal raised by the Commission). It must also be clarified in this regard whether and to what extent both the ECB and the EU Courts were and are required to take into account the interpretative practice of the national courts mentioned by the appellants and Italy.

4.      Interpretation of Article 69octiesdecies(1)(b) and Article 70(1) of the TUB in compliance with the directive?

115. According to the recent case-law of the Court, ‘in order to ensure the effectiveness of all provisions of EU law, the primacy principle requires, inter alia, national courts to interpret, to the greatest extent possible, their national law in compliance with EU law’. (⁹⁰)

116. In accordance with settled case-law, when applying national law, those courts are therefore required to interpret it, to the greatest extent possible, in the light of the text and the purpose of the provision of EU law applicable, taking into consideration the whole body of national law and applying the interpretative methods recognised by national law, with a view to ensuring that that provision is fully effective and to achieving an outcome consistent with the objective which it pursues. The obligation to interpret national law in a manner consonant with EU law has certain limits, however, and cannot, in particular, serve as a basis for an interpretation of national law contra legem. (⁹¹)

117. For the reasons set out in points 106 to 109 above, it is the task of not only the Member States’ authorities and courts but also in principle, on the basis of the requirement in the first subparagraph of Article 4(3) of Regulation No 1024/2013, the ECB – and, subsequently, the General Court in reviewing the lawfulness of its action – to interpret and apply the national law transposing Directive 2014/59 to the greatest extent possible in compliance with the directive. (⁹²)

118. In the first contested decision, the ECB merely relied on Articles 69octiesdecies and 70 of the TUB in conjunction with Article 29 of Directive 2014/59 in order to place the bank under temporary administration, without raising, let alone examining, the question whether it is possible to interpret those national provisions in compliance with the directive. The General Court considered this to be an error of law, inter alia because, in its view, such an interpretation is contrary to the clear wording of those provisions, in particular of Article 70 of the TUB. This is evident, in essence, from the following considerations.

119. As was stated in point 88 above, the first sentence of Article 29(1) of Directive 2014/59 is to be read in conjunction with Article 28 thereof. Placing a bank under temporary administration therefore likewise always requires that there is a significant deterioration in the financial situation of bank concerned. As the General Court stated in paragraph 88 et seq. of the judgment under appeal, however, Article 69octiesdecies(1)(b) of the TUB alone expressly includes the condition of ‘deterioration in the situation of the bank’. By contrast, Article 70(1) of the TUB refers to infringements or irregularities within the meaning of Article 69octiesdecies(1)(b) of the TUB, but does not specifically lay down that condition. Instead, Article 70(1) of the TUB contains a qualified condition, under which ‘serious financial losses’ must be expected. The General Court inferred from this and from the fact that the conditions provided for in Article 70(1) of the TUB are exhaustively regulated that it is not possible to interpret that provision in compliance with the directive. (⁹³) Consequently, it essentially took the view that, in the absence of proof that this qualified condition was satisfied (⁹⁴) and thus of a sufficient legal basis, the EIB was not authorised to place the bank under temporary administration or to extend that measure in the contested decisions solely on the ground that there was a significant deterioration in its financial situation.

120. The appellants and Italy, on the other hand, assert that Article 70(1) of the TUB, possibly in conjunction with Article 69octiesdecies(1)(b) of the TUB, can and even must be interpreted in accordance with the first sentence of Article 29(1) of Directive 2014/59. The General Court therefore erred in law in rejecting such an interpretation.

121. It is therefore necessary to consider the precise scope of the obligation of the ECB and the General Court to interpret national law to the greatest extent possible in compliance with the directive (see point 116 above). With regard to the complaints put forward by the appellants and Italy, it must be examined in particular whether and to what extent the General Court was required, to that end, to take into account the interpretative methods recognised in national law and the related case-law of the national courts. (⁹⁵)

122. This leads to a point which is fiercely disputed between the parties, namely whether the national law to be applied by the ECB under the first subparagraph of Article 4(3) of Regulation No 1024/2013, in its implementation and subsequent judicial review – like EU law – is the object of a ‘question of law’ or, rather, constitutes a demonstrable ‘question of fact’. (⁹⁶) The General Court could be criticised for making an error of law only if the possibility of interpreting national law in compliance with the directive on the basis of the interpretative methods applicable at domestic level, including the related case-law, concerned a ‘question of law’ incorrectly assessed by it or it had at least obviously distorted that law in the judgment under appeal. (⁹⁷) This is also linked with the important preliminary question of whether the Court of Justice actually has jurisdiction under the second subparagraph of Article 256(1) TFEU to assess the relevant grounds of appeal. (⁹⁸)

5.      National law for the purposes of the first subparagraph of Article 4(3) of Regulation No 1024/2013 as ‘law’ or ‘fact’?

123. The ECB, the Commission and Italy consider, in accordance with the contested decisions, that in the light of the whole body of national law, the related interpretative methods and the case-law of the Italian courts, it is possible to interpret Article 70(1) of the TUB in compliance with the directive. The ECB and the Commission maintain in this regard, above all in the answers given by them at the hearing to a written question posed by the Court of Justice, that national law, by virtue of the obligation to apply it under the first subparagraph of Article 4(3) of Regulation No 1024/2013, is to be treated in the same way as EU law and compliance with it is subject to full review by the EU Courts, including by the Court of Justice in appeal proceedings under the second subparagraph of Article 256(1) TFEU. The General Court, however, misunderstood this legal possibility of interpreting Article 70(1) of the TUB in compliance with the directive.

124. This is disputed by Ms Corneli. She claims that the ECB is required to interpret and apply national law on the basis of the criteria recognised in the national legal order, even if it is contrary to EU law. This latter question might possibly be raised by way of infringement proceedings, but not in annulment or appeal proceedings, and must be treated as a question of fact. In any event, Articles 28 and 29 of Directive 2014/59 have been correctly transposed in Article 69octiesdecies(1)(b) and Article 70(1) of the TUB.

125. The Court of Justice has previously found in two judgments concerning the single supervisory mechanism that the application of national law by (the ECB and) the General Court on the basis of the first subparagraph of Article 4(3) of Regulation No 1024/2013 in the context of an appeal can be examined only to determine whether that law was distorted in a way that is obvious from the documents on its file. (⁹⁹) Consequently, according to that case-law – which in my view is correct – national law cannot be treated in an appeal in the same way as EU law in its function as a standard of review.

126. Unlike Advocate General Ćapeta and the Commission, I do not consider that it is possible to treat the application of national law by the ECB, even if it is expressly prescribed by EU law, as a pure question of law which would be substantially the same as the question of ensuring that ‘in the interpretation and application of the Treaties the law is observed’ within the meaning of the second sentence of Article 19(1) TEU or a ‘point of law’ in the second subparagraph of Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice. (¹⁰⁰) To treat these different legislative sources in exactly the same way would run counter to the distribution of competences between the Member States and the European Union in the Treaties and the principle of conferral under Article 5(2) TEU. This distribution of competences under the Treaties cannot be altered by an obligation under secondary legislation to apply national law, like that laid down in the first subparagraph of Article 4(3) of Regulation No 1024/2013. Otherwise, the consequence of this provision would be that the national law transposing directives which guarantee the functioning of the single supervisory mechanism would be fully ‘incorporated’ within the scope of EU law. (¹⁰¹) It would then have to be dealt with by the EU institutions and Courts exclusively on the basis of the criteria applying to EU law. (¹⁰²)

127. For these reasons relating to competence, the principle of iura novit curia cannot apply to the EU Courts in relation to national law in the same way as it does in relation to EU law. The Court of Justice has the ‘final word’ under the second sentence of Article 19(1) TEU in conjunction with the second subparagraph of Article 256(1) and Article 267 TFEU and the first paragraph of Article 58 of its Statute only in respect of the interpretation and application of EU law, the Treaties and secondary law, including directives, while for national law (including that adopted to transpose those directives) it remains, in principle, with the Member States’ supreme or constitutional courts. (¹⁰³) As Ms Corneli correctly asserts, both infringement proceedings under Article 258 TFEU (¹⁰⁴) and the principle that the Court of Justice does not have jurisdiction in preliminary ruling proceedings under Article 267 TFEU for the interpretation and application of national law (¹⁰⁵) are a specific expression of this distribution of competences under the Treaties. This view is confirmed by the limits on the interpretation of national law in compliance with directives recognised in the Court’s case-law (see points 115 and 116 above), which serve to safeguard the competence and the will of the Member State’s legislatures.

128. In this regard I would also recall my detailed views concerning the application of national legislation and judicial review in the field of EU law relating to trade marks, which also refers to national law. (¹⁰⁶) In my view, no principles can apply here other than those which the Court of Justice then specifically recognised for EU law relating to trade marks (¹⁰⁷) and subsequently applied to the scope of the first subparagraph of Article 4(3) of Regulation No 1024/2013. (¹⁰⁸) The Court of Justice has also, however, taken into account the fact that national legal provisions cannot be treated in exactly the same way as other facts in judicial proceedings but, because of their hybrid character as legal facts, must be subject to special requirements of demonstration and proof. (¹⁰⁹) It must also be borne in mind that a national provision implementing supervisory powers within the single supervisory mechanism is also, by virtue of the stipulation made in the first subparagraph of Article 4(3) of Regulation No 1024/2013, a rule of law relating to the application of the Treaties for the purposes of the second paragraph of Article 263 TFEU, the application of which is, in principle, subject to review by the EU Courts.

129. Lastly, this approach is similar to that taken by the Court of Justice in its case-law concerning the EU rules on State aid. According to that case-law, national law in the light of which it is to be assessed whether a Member State has granted prohibited aid for the purposes of Article 107(1) TFEU must be appraised as a legal fact, in essence, in accordance with the applicable rules on demonstration and proof. (¹¹⁰)

130. It follows that the standard of review for national law before the EU Courts implies, in principle, that the party relying on national law must demonstrate and prove that that law should be interpreted and applied in the manner claimed by it in accordance with the national interpretative methods and the relevant case-law of the courts of the Member State in question. (¹¹¹) The appellants’ argument that national law is equivalent to EU law within the scope of the first subparagraph of Article 4(3) of Regulation No 1024/2013 must therefore be rejected. The EU Courts are therefore also not permitted in that review, if necessary, to raise and examine the relevant national law of their own motion. (¹¹²) This is even less so since a corresponding prohibition on courts raising a point of their own motion also applies, as a general rule, in EU law. (¹¹³)

131. I will therefore examine below whether the appellants and Italy were permitted to demonstrate, or have demonstrated, in the appeal proceedings that, in accordance with the national interpretative methods and the relevant case-law, Article 69octiesdecies(1)(b) and Article 70(1) of the TUB may be interpreted in compliance with Articles 28 and 29 of Directive 2014/59 and the judgment under appeal is therefore vitiated by an error of law in this regard. Because the interpretation and application of national law is, in essence, to be treated as a demonstrable question of fact, the complaints in this regard raised by the appellants at the appeal stage could be inadmissible, as Ms Corneli also argues. Furthermore, the General Court could be criticised for erring in law in this regard only if it had infringed the rules on the presentation of evidence to this effect, in particular the distribution of the burden of proof and the standard of proof or – based on the standards recognised by the Court of Justice – had manifestly distorted the relevant facts or evidence in assessing the content and significance of the national provisions and their application. (¹¹⁴)

6.      Admissibility of the complaint concerning whether the interpretation of Article 69octiesdecies(1)(b) in conjunction with Article 70(1) of the TUB complies with the directive

132. The appellants, supported by Italy, made detailed submissions for the first time at the appeal stage regarding the interpretative methods under Italian law which, in their view, should be taken into account in respect of Article 69octiesdecies(1)(b) and Article 70(1) of the TUB and on how the Italian courts have previously interpreted and applied those provisions, also having regard to Articles 28 and 29 of Directive 2014/59. (¹¹⁵) The relevant case-law of those courts originates from 2012, 2015, 2017 and 2021 and was therefore available at the time of the proceedings at first instance before the General Court. That case-law is not, however, mentioned at all in the written pleadings of the parties at first instance. They also failed to put forward any substantiated facts in this regard at the hearing before the General Court in reply to its questions.

133. In its response to the fourth plea raised by Ms Corneli at first instance, alleging an infringement of Article 70(1) of the TUB, however, the ECB could very probably have relied on such a submission in defence to prompt the General Court, above all, to deal with the question of the interpretation and application of those provisions by the Italian courts. In the absence of any such submission by the ECB, the General Court neither assessed this question in the context of the fourth plea nor was it able to do so. As was explained in point 130 above, the General Court was neither empowered nor obliged to examine of its own motion the significance of the national provisions in the light of the national interpretative methods and case-law. It cannot therefore be criticised for having manifestly disregarded let alone distorted this.

134. First of all, it is not the task of the Court of Justice to assess facts and evidence presented for the first time at the appeal stage, including the contested legal facts of the interpretation and application of the relevant national provisions, which were not or could not be part of the assessment by the General Court. In addition, according to settled case-law, there is such a distortion of evidence only where, without recourse to new evidence, the assessment of the (already) existing evidence by the General Court is clearly incorrect. (¹¹⁶) Furthermore, a formal request by the appellants for the admission of new evidence would also have to be dismissed. Pursuant to the second subparagraph of Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice, appeals lie on points of law only, to the exclusion of any assessment of the facts, with the result that new evidence is inadmissible at the appeal stage. (¹¹⁷)

135. Second, a distortion of the facts or the evidence must be obvious from the documents on the file, without there being any need to carry out a new assessment of the facts and evidence. Given the exceptional nature of a ground alleging that there has been a distortion of the clear sense of the facts or the evidence, Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice and Article 168(1)(d) of the Rules of Procedure provide that an appellant must indicate precisely the evidence the sense of which is alleged to have been distorted by the General Court and show the errors of appraisal which, in its view, led to that distortion. (¹¹⁸)

136. The Court of Justice has thus already clarified, with regard to an error of law in applying the first subparagraph of Article 4(3) of Regulation No 1024/2013, which is alleged on appeal, that it has jurisdiction only to determine, first of all, whether the General Court, on the basis of the documents and other evidence submitted to it, distorted the wording of the national provisions concerned or of the national case-law relating to them, or of academic writings; second, whether, as regards those particulars, it made findings that were manifestly inconsistent with their content; and, third, whether, in examining all the particulars, it attributed to one of them, in order to establish the content of those provisions, a significance which is not appropriate in the light of the other particulars, where that is manifestly apparent from the documentation in the case file. (¹¹⁹)

137. A gross disregard for the case-law of the Italian courts in the judgment under appeal, which is claimed by the ECB in particular, is not apparent from the documentation in the case file at first instance, but at most from the complaints raised at the appeal stage. In the absence of any such submissions in the proceedings at first instance, it is also not evident that the General Court might have misunderstood the rules on evidence under EU law. This holds even if the General Court interpreted the national provisions as if they were provisions of EU law. (¹²⁰)

138. Rather, the interpretation of Article 70(1) of the TUB given by the General Court (see point 119 above) seems sufficiently plausible, in the light of the wording of that provision, such that its refusal to interpret that provision in compliance with the directive contra legem can be regarded neither as a manifest distortion nor as vitiated by an error of law for other reasons.

139. The qualified condition expressly laid down in Article 70(1) of the TUB – by contrast with the wording of Articles 28 and 29 of Directive 2014/59 – that a bank may also be placed under temporary administration, aside from in cases of ‘infringements or irregularities’ within the meaning of Article 69octiesdecies(1)(b) of the TUB, where ‘serious financial losses [for the bank] are expected’ (¹²¹) could certainly preclude its interpretation in compliance with the directive. First of all, it is not evident at first sight that the condition of ‘deterioration in the situation of the bank’ in Article 69octiesdecies(1)(b) of the TUB, which is not provided for in Article 70(1) of the TUB, might be equivalent to the condition of expectation of serious financial losses. Second, it is not readily apparent that, as the ECB and Italy assert, the terms ‘infringements’ and ‘irregularities’ in Article 69octiesdecies(1)(b) of the TUB, to which Article 70(1) of the TUB refers, always automatically imply a ‘deterioration in the situation of the bank’. Such an interpretation in compliance with the directive could be precluded in particular if, as the General Court found (¹²²) and Ms Corneli asserts, it were correct that the qualified condition of expectation of serious financial losses is, according to the will of the Italian legislature, a specific expression of the principle of proportionality and serves specifically to justify the more serious interference – compared with the primary, less onerous remedial measures – associated with placing a bank under temporary administration. In any event, in the contested decisions the ECB did not expressly examine this qualified condition in order to justify placing the bank under temporary administration. (¹²³)

140. In the light of the information available in the documents on the file, the General Court’s finding in the judgment under appeal that the ECB did not rely on a sufficient legal basis is not therefore connected with a manifestly incorrect interpretation of the relevant national provisions. Nor is it evident that the General Court thereby infringed its obligation to interpret those provisions to the greatest extent possible in compliance with the directive.

141. Consequently, the complaints put forward by the appellants and by Italy, in so far as they claim – in the context of the second to fifth grounds of appeal raised by the ECB and the third and fourth grounds of appeal raised by the Commission – an error of law in applying the interpretative methods under Italian law and a misunderstanding of the case-law of the Italian courts, must be rejected as inadmissible.

142. The Commission cannot object – by its second ground of appeal – that Ms Corneli challenged the interpretation of Article 70(1) of the TUB given by the General Court in response to its fourth plea out of time, namely not until the reply before the General Court, which was inadmissible under Article 84(1) of the Rules of Procedure of the General Court. This argument put forward by the Commission is based on a formalistic comparison of the wording of two paragraphs of the application and the reply, respectively, which, in their introductions, each reproduce the content of Article 70 of the TUB. As Ms Corneli has argued, this content was described only imprecisely in the application, without influencing the scope of the fourth plea. Even though the infringement of Article 70(1) of the TUB was formulated in only vague terms in that plea and did not include the interpretation given in the judgment under appeal in that form, it must also be borne in mind that the first contested decision was not communicated in full to Ms Corneli until after the action had been brought. There was therefore no new plea in law within the meaning of Article 84(1) of the Rules of Procedure of the General Court, but at most a lawful development of the (fourth) plea concerning infringement of Article 70(1) of the TUB, which had already been put forward in the application. (¹²⁴) The ECB then made defence submissions without taking into account either the national interpretative methods or the case-law of the Italian courts.

143. The second ground of appeal raised by the Commission alleging that the General Court infringed Article 84(1) of its Rules of Procedure and the principle ne ultra petita must therefore be rejected as unfounded.

7.      Interim conclusion

144. Since, in my view, none of the grounds of appeal can be upheld, I propose that both appeals be dismissed.

145. Because costs have not been applied for pursuant to Article 138(1) in conjunction with Article 184(1) of the Rules of Procedure, there is no need to decide on the costs of Ms Corneli. As the appellants have been unsuccessful, they must bear their own costs relating to the appeal proceedings under Article 138(1) in conjunction with Article 184(2) of the Rules of Procedure. Italy, as intervener, must bear its own costs under Article 140(1) in conjunction with Article 184(1) of the Rules of Procedure.

146. Should the Court of Justice, however, disagree with my recommendation for a decision and consider the appeals to be well founded, in particular because the fifth ground of appeal raised by the Commission is to be upheld (see points 81 to 112 above), the judgment under appeal would have to be set aside, the case would have to be referred back to the General Court for reconsideration and the costs would have to be reserved. As the General Court dealt with only the plea of infringement of Article 70(1) of the TUB and the lack of legal basis and did not examine the other pleas which it summarised in paragraph 84 of the judgment under appeal, (¹²⁵) the state of the proceedings would not permit final judgment pursuant to Article 61 of the Statute of the Court of Justice. In my view, the Court of Justice does not have the necessary information to rule definitively on those pleas. This would also require, to some extent, an assessment of the facts and the evidence which was not carried out by the General Court.

VI.    Conclusion

147. In the light of all the foregoing, I propose that the Court should:

(1)      Dismiss the appeals in Joined Cases C‑777/22 P and C‑789/22 P.

(2)      Order the European Central Bank, the European Commission and the Italian Republic to bear their own costs.