EN ECB -PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 5 April  2012 
on amendments to the Law o n the Magyar Nemzeti Bank  
(CON/201 2/26) 
 
Introduction and legal basis  
On 7 March  2012, the European Central Bank (ECB) received a request from the Hungarian Ministry for 
the Nat ional Economy for an opinion on a draft law amending  Law CCVIII of 2011  on the Magyar 
Nemzeti Bank1 (hereinafter the ‘draft law’) . 
The ECB’s competence to deliver an opinion is based on Article s 127(4) and 282(5) of the Treaty on the 
Functioning of the Eur opean Union and the third indent of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Central Bank by national authorities regarding draft 
legislative provisions2, as the draft law relate s to the Magyar Nemzeti Bank ( MNB ). In accordance with 
the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing 
Council has adopted this opinion.  
 
1.  Purpose of the draft law  
The draft law will re peal certain provisions of Law CCVI II of 2011 on the Magyar Nemzeti Bank  
(hereinafter the ‘MNB Law’).  
According to the draft law, Article 34 of the MNB Law on the obligation of the MNB to submit the 
agenda s for Monetary Council  meetings to the Government and on the right of the Govern ment’ s 
representative to be present at Monetary Council  meetings will be repealed.  
The draft law repeals  Article 46(10)  of the MNB Law , thereby  cancel ling the two specific dismissal 
scenarios.  
Furthermore , the draft law repeals Article 46 (17) of the MNB Law  that provides for the aboli tion of the 
Monetary Council on Hungary join ing the euro zone.  
The draft law also repeals Article 30 of the Transitional Provisions to Hungary’s Fundamental  Law, 
thereby deleting the legal provisions regarding  the possibility of a m erger between the MNB and the 
Hungarian Financial Supervisory Authority ( FSA). 
 
                                                 
1  Magyar Közlöny , 2011/166., 30.12.2011, p. 41648.  
2 OJ L 189, 3.7.1998, p. 42.  
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2 2.  General observation s 
Some of t he ECB’ s earlier observations in  Opinion CON/2011/ 106 regarding the principle of central bank 
independence  have been taken into account by del eting Article 30 of the Transitional Provisions of the 
Fundamental Law, which would have enabled the MNB to merge with the F SA.  
 
3.  The number of Monetary Council members and decision- making  
The ECB reiterates its observations in  Opinion CON/2011/104 and CON/2011/106 on the composition of 
the MNB’s decision -making bodies , as well as its observation s with regard to the adverse effect of the 
frequent changes to the MNB’s institutional framework . Against the backdrop of the constant changes in 
the composition of the MNB’s decision -making bodies, t he increase in the number of Monetary Council 
members, together with the possibility of increasing the number of deputy governors – without  consulting 
the MNB  and giving due consideration to its  need s or providing re asonable arguments to support the 
expansion  against the MNB’s advice – gives rise to serious concerns whether this could be used to 
influence the decision -making process to the detriment of central bank independence.  
 
4. Grounds for dismissal of the membe rs of the Monetary Council   
As stated in the ECB’s C onvergence Reports3, the statute of a national central bank (NCB) must ensure 
that Governors may not be dismissed for reasons other than those mentioned in Article 14.2 of the Statute 
of the European Syst em of Central Banks (hereinafter the ‘Statute  of the ESCB ’). The purpose of this 
requirement is to prevent the authorities involved in the appointment of g overnors, particularly the 
Government or P arliament, from exercising discretion to dismiss a g overnor . NCB statutes should either 
contain grounds for dismissal t hat are compatible with those laid down in Article 14.2 of the Statute, or 
omit any mention of grounds for dismissal since Article 14.2 is directly applicable. In addition, in the 
light of Article  130 of the Treaty  and Article  14.2 of the Statute  of the ESCB , personal independence 
would be jeopardised if the same grounds for dismissal of g overnors were not also to apply to other 
members of the decision- making bodies of NCBs involved in the performa nce of ESCB -related tasks4. 
This applies in particular where a g overnor is ‘first among equals’ with colleagues with equivalent voting 
rights or where such other members may have to deputise for the Governor.  
The draft law proposes deletin g Article 46(10) of the Law on the MNB. Pursuant to Article 46(10) of the 
Law on the MNB , a member of the Monetary Council , including the Governor , as Chair of the Monetary 
Council, and the Deputy Governors, may be dismissed  only if t hey no longer fulfil the conditions 
required for the performance of their duties or ha ve been  guilty of serious misconduct. Article 46(10) 
provide s that , for these grounds , the Governor , as Chair of the Monetary Council,  and the Deputy 
Governors , may be dismissed  by Hungary’s  President and that the other members of the Monetary 
                                                 
3  In particular 2010 Convergence Report , p. 20 . All ECB Opinions and Reports are available on the ECB’s website at 
www.ecb.europa.eu.  
4  See par agraph 8 of Opinion CON/2004/35; paragraph 8 of Opinion CON/2005/26; paragraph 3.3 of Opinion 
CON/2006/44; paragraph 2.6 of Opinion CON/2006/32; and paragraphs 2.3 and 2.4 of Opinion CON/2007/6.  
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3 Council may be dismissed  by the Parliament. Pursuant to Article 47(3) of the Law on the MNB , 
Article  46(10) also applies to the MNB’s Governor , which presumably refers to the Governor outside his 
function as chair of the Monetary Council . There are also other r efere nces in the Law on the MNB to 
Article 46(10). The draft law deletes Article 46(10) of the Law on the MNB  without deleting the 
references to Article 46(10) in A rticle 47(3) and elsewhere in the Law on the MNB . 
For reasons of legal certainty, the ECB strongly recommends not deleting Article 46(10) of the Law on 
the MNB . Article 46(10) is in line with the grounds  for dismissal unde r Article 14.2 of the Statute of the 
ESCB5 and appl ies to all Monetary Council members . Another reason to maintain Article 46(10) of the 
Law on the MNB is that , if Article 46(10) is deleted , neither the Funda mental Law nor the Law on the 
MNB would specify whether the Parliament or Hungary’s President are empowered to dismiss the 
Mone tary Counc il members.  
 
5. Other remaining concerns related to the Law on the MNB  
5.1 Salaries   
The ECB’s Convergence Reports in 2008 and 2010, and several ECB opinions6 on autonomy in 
staff matters, stressed that Member States may not impair an NCB’s ability to recruit and retain the 
qualified staff necessary for i t to perform independently the tasks conferred on it by the Treaty, the 
Statute of the ESCB and national legislation. Furthermore, an NCB may not be put into a position 
where it has limited or no contro l over its decision makers , or where a Member State’s government 
is in a position to influence the NCB’s policy on staff matters.  
To protect the MNB’s autonomy in remuneration matters, in accordance with the principle of 
central bank independence under Ar ticle 130 of the Treaty, the Hungarian authorities must ensure 
that any amendment to the legislation on the remuneration of the MNB’s decision -makers is 
decided in close cooperation with the MNB, taking due account of the MNB’s views7 regarding the 
impact of such legislative amendments on its ongoing ability to carry out its tasks. The concern 
remains that the repeated amendments since September 2010  to legislation on salaries of members 
of the MNB’s decision -making bodies  have been implemented without taki ng into account the 
above aspects of the MNB’s financial independence addressed repeatedly in previous opinions8. 
All recently adopted amendments applied from the moment of their adoption to all concerned 
subjects. Therefore, the observations in CON/2011/56, CON/2011/104 and CON/2011/106 are still 
valid . The remuneration of the current Governor and Deputy Governors has been significantly 
decreased compared to the remuneration paid at the beginning of their term of office. The manner 
and frequency of these c hanges in the remuneration of the members of the central bank ’s decision -
                                                 
5  The stated aim of the draft law , as specified in the explanatory memorandum , is precisely to bring the Law on the MNB 
in line with the Treaty and the Statute of the ESCB.  
6  ECB Opinions CON/2008/9, CON/2009/45, CON/2009/47, CON/2010/42, CON/2010/51 and CON/2010/56.  
7  See for example paragraph 4.3 of ECB Opinio n CON/2010/42 and Opinion CON/2010/56.  
8  See CON/2010/56 and CON/2010/91.  
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4 making bodies represent signs of pressure on them from the national authorities. Article 51 of the 
Law on the MNB should only apply for future appointments and after taking due accoun t of the 
MNB’s views.  
5.2 Replacement of the Governor  
The ECB reiterates the o bservation  in Opinion CON/2010/91 related to the replacement of the 
MNB’s Governor. Pursuant to Article 47(8) of the Law, the Deputy Chair of the Monetary Council 
may replace th e Governor in the latter’s absence. The Law needs to provide sufficient guarantees 
and rules for a successor to the Governor in the event of termination of office due to expiry of the 
term of office, resignation, dismissal or death to avoid any external ad hoc interference and at the 
same time to ensure the smooth and continuous functioning of the Monetary Council9.  
5.3 Oath  
Pursuant to Article 46(7) in conjunction with Article 47(3) and 48(2) of the Law  on the MNB , the 
MNB’s Governor and Deputy Governors must take an oath before Hungary’s President, while 
other Monetary Council members take an oath before the Parliament. Law XXVII of 2008 specifies the wording of the oath to be taken by public officials appointed by the Parliament
10. Therefore, it 
is not clear if the same oath is taken by the Governor and the Deputy Governors as the other members of the Monetary Council. The MNB’s Governor acts in a dual capacity as a member of 
the MNB’s Monetary Council and of the ECB ’s decision -making bodies. The wording of the oath 
should take into account and reflect the status and the obligations and duties of the MNB’s 
Governor as a member of the ECB’s decision -making bodies.  
Furthermore, the other members of the Monetary Council are also involved in the performance of  
ESCB -related tasks. The oath should not affect the personal independence of the Governor, the 
Deputy Governors and the other members of the Monetary Council and therefore should not hinder them from performing ESCB -related tasks. Articles 46(7), 47(3) and  48(2) of the Law on the MNB, 
and Law XXVII of 2008, need to be adapted in this regard. 
5.4  Jurisdiction  of the Court of Justice  of the European Union  
Pursuant to Article 46(12) and (13) of the Law  on the MNB , an appeal may be brought in the 
Labour Court against a motion for dismissal of a member of the Monetary Council, in accordance 
with the  Labour Code. As regards the MNB’s Governor, similar provisions apply in Article 47(5) 
and (6) , and, as regards the Deputy Governors, in Article 48(2) of the Law on the MNB . 
Article s 47(5) and 46(12) of the Law on the MNB specifically refer to the right to appeal to the 
Court of Justice of the European Union pursuant to Article 14.2 of the Statute of the ESCB . 
However, Article 77 of the Law  on the MNB , which amends  Articles 46( 12) and 47(5) of the Law  
                                                 
9  See Opinion CON/2010/91.  
10  Law XXVII of 2008 on the oath of certain public officials specified the following wording : ‘I, ….[name of the person 
taking the oath], hereby underta ke to be faithful to Hungary and to its Fundamental Law, I will comply and ensure 
compliance with its laws, I will fulfil my office as  [name of the position] for the benefit of the Hungarian people.  
(Depending on the belief of the person taking the oath: ) So help me God! ’ 
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5 from 1 January 2013, does not contain any reference to Article 14.2 of the Statute of the ESCB and  
to the right to seek a remedy before the Court of Justice of the European Union. The amended 
Article 47(5) of the Law on the MNB will only provide that the Prime Minister send s the dismissal 
proposal pursuant to Article 47(4) to the  MNB’s  Governor, who may appeal to the L abour Court in 
accordance with the Labour Code.  Pursuant to Article 47(6) and (7 ), the decision to dismiss the 
Governor is taken by the President and countersigned by the Prime Minister  after the period for 
appeal at the Labour Court expire s or after the Court’s decision is rendered final . Although 
Article 77 of the Law on the MNB  is silent on the jurisdiction of the Court of Justice of the 
European Union, Article 14.2 of the Statute of the ESCB is directly applicable and continues to 
apply. 
5.5 Legal integration of the MNB into the Eurosystem   
The ECB reiterates its observations in Opinion CON/2011/104 and CON/ 2011/106 on Hungary 
being a Member State with a derogation and therefore obliged to comply with all adaptation 
requirements under the Treaties. Previous  ECB Opinion s have already pointed out that  the recast of 
the MNB Law offered the Hungarian authorities the opportunity to make the necessary adjustments 
to ensure the MNB’s full integration into the Eurosystem when Hungary adopts the euro.  
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main, 5 April  2012.  
 
[signed]  
 
The Vice -Presiden t of the ECB  
Vítor  CONSTÂNCIO