The law that forced local banks to convert loans in Swiss francs into Romanian currency lei at the historical exchange rate from the moment the loans were granted was declared unconstitutional yesterday by Romania’s Constitutional Court (CCR).

The president of the Constitutional Court Valer Dorneanu said that the CCR judges decided that the law was unconstitutional based on two reasons. Firstly, the Senate had approved a certain version of the law, which was then heavily amended by the Chamber of Deputies. This meant a breach in the principle of bicameralism, which needs to be met. Secondly, the solution adopted by the Chamber of Deputies of converting loans in Swiss francs in lei at the exchange rate from the date when the contract was concluded is “wrong and doesn’t match any European directives".

On October 18 2016, just before the start of the campaign for the parliamentary elections, the Parliament approved the conversion law with a unanimous vote. A few days later the Government notified the Constitutional Court about this law. The executive argued that the law operates retroactively.

editor@romania-insider.com