"The essence of this case is that we'll get a precedent ruling on the Union's archives, which means that the EU archives will be defined.

"I consider today's hearing very positive as the court's questions were extremely in favour of our arguments," Katja Rejec Longar told the press in Luxembourg on Monday.

Arguing the archives should be interpreted in a narrow and functional manner, the agent said Slovenia considers a broad interpretation of privileges and immunities in contraction with the fundamental values of the EU, including the rule of law.

The European Central Bank (ECB) cannot claim at abstract level that its archives were encroached upon if it does not say how this would compromise its operations, according to her.

The Commission filed the lawsuit against Slovenia in April 2019, claiming the immunity of ECB archives as violated when the Slovenian police seized some ECB documents as part of a criminal investigation at Slovenia's central bank Banka Slovenije.

The police visited Banka Slovenije in July 2016 as part of the investigation into suspected irregularities in the EUR 5 billion bank bailout, which resulted in wiping out holders of subordinated bonds and shares.

A member state can ask for immunity and privileges as stipulated in the protocol on the privileges and immunities of the EU to be lifted, but the Commission argues that Slovenia did not opt for it, an issue raised during today's hearing.

Rejec Longar explained that the Slovenian police had not been after ECB documents, but exclusively after documents related to Banka Slovenije's powers.

"But technically speaking, in today's digital age, when everything is in the computer, it's impossible to take only three documents and separate them. It was logical that the whole laptop of the central bank governor was taken," she illustrated.

The agent also recalled that the 2013 bailout of the Slovenian banking system was not in the jurisdiction of the EU but within Slovenia's national jurisdiction.

The judges today persistently asked the Commission why a request made by the Banka Slovenije governor could not be understood as a request by the ECB. Rejec Longar said this was exactly an argument of Slovenia's.

The Commission claims that the European system of central banks is an extremely integrated unit, which implies that a national central bank is practically an European institution. This raises a logical question of whether a central bank can arbitrarily decide when it is an European institution and when a national one.

The Commission also says that Slovenia's institutions did not constructively discuss the issue with the ECB, thus not respecting the principle of sincere cooperation.

Barbara Rous Demiri, who represented the Commission at the hearing, said the ECB's attempts to clarify the facts and circumstances had not been successful.

Slovenia rejects the allegation, with Rejec Longar saying the Slovenian prosecutor was always willing to cooperate.

The gap between the ECB and the prosecutor was in that he did not let the ECB lead the investigation but led it himself in line with national legislation, within which scope he was always willing to cooperate, even negotiate compromises, she explained.

Although Slovenia rejects all of the Commission's accusations, Prime Minister Janez Janša has recently written to Commission President Ursula von der Leyen asking her under what conditions the Commission would be willing to withdraw the suit.

He believes the suit is hampering the ongoing police investigation, indicating that the Slovenian investigation about bank crime was deadlocked because of the suit. The Commission has received the letter, but available information indicates that it has not yet replied.

Asked whether a settlement was possible, Rejec Longar said today the Commission always has the option of admitting a mistake and withdrawing the suit.

But a settlement is not possible in the sense that Slovenia says it seized the EU's archives, because Slovenian courts have ruled that the seized documents are not the EU's archives, and these rulings are binding on Slovenian institutions, she explained.

The hearing did not discuss the option of withdrawal, except when the ECB's representative Aljoša Šega casually mentioned it but then pulled back saying it was his mistake.

ECJ Advocate General Juliane Kokott said she would present her opinion on the matter, which is not binding on the court, on 3 September.

The court does not want to specify when the ruling could be delivered. However, since similar cases last year ended an average 19 months after the suit was filed, it is expected towards the end of the year.