Judgment in Case C-526/14 Tadej Kotnik and Others v Državni zbor Republike Slovenije

The European Court of Justice decided on 19 July 2016 that the Communication from the European Commission on aid to the bankings sector is valid, in particular regarding burden-sharing by shareholders and subordinated creditors as a prerequisite for the authorisation of state aid to a bank with a shortfall.

Following the decision by Slovenia's government in 2013 to intervene in several national banks with a shortfall (eventually authorised by the Commission), applications were brought before the country's Constitutional Court on the constitutionality of the law on the banking sector. This triggered the request to the ECJ to give a ruling on the validity and interpretation of provisions of the Banking Communication from the Commission.

This decision was seen as a challenge to Italy's prime minister Matteo Renzi as he negotiated a way of solving systemic vulnerabilities in his country's banking sector.

EUObserver, 20.07.16: Court ruling puts Renzi bank plan in doubt https://euobserver.com/uk-referendum/134423

The Wall Street Journal, 19.07.16: EU Court’s Rejection of Slovenian Investors’ Claim Weighs on Italy Bank Talks http://www.wsj.com/articles/eu-courts-rejection-of-slovenian-investors-claim-weighs-on-italy-bank-talks-1468928312

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