EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 26 August 2010  
on further measures for the restoration of budgetary balance 
(CON/2010/69) 
 
Introduction and legal basis  
On 19 August 2010 the European Central Bank (ECB) r eceived a request from the Romanian Ministry of 
Public Finance for an opinion on a  draft government emergency ordi nance amending Law No 118/2010 
on certain measures necessary for the restoration of budgetary balance1 (hereinafter ‘draft emergency 
ordinance’).  
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European 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 Ce ntral Bank by national authorities regarding draft 
legislative provisions2, as the draft emergency ordinance relates to Banca Na ţională a României (BNR). 
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 emergency ordinance 
On 1 July 2010, the ECB adopted Opinion CON/2010/51 on the draft of Law No 118/2010 which 
decreased the salaries of BNR’s staff and transferre d directly to the State budget the amounts representing 
this decrease. In terms of substance, the ECB expresse d its concerns mainly with regard to the compliance 
of these provisions with the principles of central ba nk independence pursuant to Article 130 of the Treaty 
and the monetary financing prohibition pursuant to Article 123 of the Treaty and invited the Romanian 
authorities to amend these provisions accordingly. 
The draft emergency ordinance is intended to br ing Law No 118/2010 into line with the abovementioned 
Treaty provisions, to avoid infringement proceedings for breach of Articles 123 and 130 of the Treaty. Consequently, it provides
 that all the amounts representing the decrease of the salary rights of BNR’s 
staff will be reflected in BNR’s financial results.  
 
                                                 
1  Monitorul Oficial al României  No 441, 30.6.2010. 
2  OJ L 189, 3.7.1998, p. 42.  
2 2. General observations  
The Romanian Ministry of Public Finance requested  the ECB to deliver an opinion before 28 August 
2010. While the ECB generally appreciates the swif t reaction by the Romanian authorities to amend 
provisions on which the ECB and the European Commi ssion have expressed serious concerns, there are 
continued concerns as elaborated below. The ECB w ould like to point out that, in cases of particular 
urgency which do not allow for a normal consultation period, the consulting authority may indicate such 
urgency in the consultation request and ask for a shorter deadline for the adoption of the ECB opinion. Therefore, the ECB understands the reasons for the app lication of an accelerated  legislative procedure, 
but would appreciate receiving consultations allowing more  time for it to prepare its opinion in the future. 
 3. Specific observations 3.1 The ECB notes that the draft emergency ordina nce maintains the decrease of BNR’s salaries, 
although the Romanian State is not the formal employer of BNR staff and the Law on the Statute of Banca Na ţională a României
3 clearly provides that BNR’s management board decides on BNR’s 
staff salaries. In this regard, the explanator y memorandum addresses only the ECB’s concerns in 
Opinion CON/2010/51 regarding the monetary financing prohibition whereas BNR’s autonomy in staff matters is not discussed.   
In this context, the ECB notes that Member Stat es are obliged to safeguard the independence of 
their national central banks (NCBs), thus ensuri ng the proper performance of their tasks under the 
Treaty and the Statute of the European System of Central Banks and of the European Central Bank. 
In particular, the principle of central bank indepe ndence requires that no third party should be able 
to exercise direct or indirect influence over th e NCB. As a consequence, Member States may not 
put an NCB in a position where it has limited or no control over its staff, or where the government 
of a Member State can influence its policy on staf f matters. This implies that to protect BNR’s 
autonomy in staff matters, a particular aspect of the central bank independence principle, the 
Romanian authorities are under an obligation to en sure that any amendment to the legislative 
provisions relating to the remuneration of BNR’s st aff is decided in close cooperation with BNR, 
taking due account of BNR’s views. 
3.2 Article II of the draft emergency ordinance provides that the amounts representing the decrease of 
the ‘salary rights ... not transfe rred to the State budget until entry into force of this emergency 
ordinance shall be reflected in the financial results of Banca Na ţională a României’. The ECB 
understands from this wording that certain salary rights are still intended to be and others have 
already been transferred to the State budget. For th e latter, any such already transferred rights must 
be transferred back adequately to avoid any br each of the monetary financing prohibition in 
Article 123 of the Treaty. 
                                                 
3  Law No 312/2004 ( Monitorul Oficial al României  No 582, 30.6.2004). 
3 3.3 As regards the funds not yet transferred to the State budget, in Opinion CON/2010/51 the ECB 
stressed that from an accounting perspective, a decrease of staff salaries will de facto decrease 
BNR’s operational costs, hence increasing its financia l results leading to a potential increase in its 
financial resources. However, if this related in crease of BNR’s financial resources is directly 
transferred to the State, this would effectively m ean increasing the funding of the Romanian State at 
BNR’s expense. In this respect, any direct financia l transfer of this nature from BNR to the State 
budget can be assimilated to moneta ry financing, which is clearl y prohibited under Article 123 of 
the Treaty. In the same vein, any circumventi on of the objectives of the monetary financing 
prohibition should be avoided. 
3.4 In view of Opinion CON/2010/51 and to comply with Article 123 of the Treaty, the draft 
emergency ordinance amends Law No 118/2010, so  that all the amounts representing the decrease 
of the salary rights of BNR staff will be reflected in BNR’s fina ncial results. The ECB understands 
that this does not amount to an instruction to BNR regarding decisions taken in respect of its 
financial results . The ECB notes that BNR must be fully independent in deciding how to use the 
funds resulting from the 25% decrease of salaries as it considers appropriate, in accordance with the 
Law on its Statute and with a view to ensuring suffi cient levels of its own financial resources to 
fulfil its mandate in the long term. Subject to this  interpretation of the Law on BNR’s Statute, this 
particular provision complies with the principle of  central bank independence, which implies that 
BNR can independently use its financial resources to fulfil its mandate.  
3.5 If, however, the main purpose of the salary rights cut were to eventually increase the financial 
resources of the State through the distribution of increased profits from BNR to the State, this 
would appear to be a circumvention of the objectiv es of the prohibition on monetary financing. In 
addition, Article 43 of the Law on the Statute of BNR provides that BNR must transfer to the State budget, on a monthly basis, an 80% share of the net revenues left after deducting expenses relating 
to the financial year, including provisions for cred it risk, and loss related to the previous financial 
years that remain uncovered. The ECB’s Converg ence Report of May 2010 already criticised this 
Article
4, as it does not rule out the possibility of an in tra-year anticipated profit distribution which, 
in turn, gives rise to concerns relating to the mone tary financing prohibition. As noted in past ECB 
opinions5, it is indeed of crucial importance for the di stribution of profits to be exclusively the 
result of profits that are fully realised, accounted  for and audited, which in turn requires due 
calculation of profits and losses to avoid such possibility. 
3.6 By contrast, a decrease in the operational costs of the central bank with a view to increasing its own 
financial resources to strengthen the performa nce of its mandate would be acceptable.  
 
                                                 
4  Chapter 6.8. All ECB documents are availa ble on the ECB’s website at www.ecb.europa.eu. 
5  See e.g. ECB Opinion CON/2008/82. 
4 This opinion will be published on the ECB’s website.  
  Done at Frankfurt am Main, 26 August 2010. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET