EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 11 November 2015  
on pay and pension provisions  
(CON/ 2015/44)  
 
Introduction and legal basis  
On 23 October 2015 the European Central Bank (ECB) received a request from the Irish Minister for 
Public Expenditure and Reform  for an opinion on the Financial Emergency Measures in the Public 
Interest Bill 2015 (hereinafter the ‘draft law’).  
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/EC1, as 
the draft law  relates to the Central Bank of Ireland (CBI) . 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  
1.1  The draft law amends the five Financial Emergency Measures in the Public Interest (FEMPI) Acts 
that were adopted between 2009 and 2013 and reduced the remuneration of public servants and  
pensions payable to former public servants.  The draft law amends the previous  FEMPI  Acts with 
effect from 1 January 2016 in order to begin a partial and phased reversal  of the remuner ation 
reductions made under those Acts and to make provision for the par tial reversal  of pension 
reductions  imposed on public servants.  
1.2  For that purpose, Part 2 of the draft law (Remuneration – Public Servants Generally) amends the 
Financial Emergency Measures in the Public Interest Act 2009 (hereinafter the ‘2009 Act’), which 
was introduced as part of the Government’s programme of  measures to urgently address the 
serious position of the public finances, and which provided for  deductions to be made from the 
remuneration of public servants. The draft law provides for the restoration in part or  in whole  of the 
basic salary of a public servant , where that  reduced basic salary does not exceed EUR 24 000, 
EUR 31 000 or EUR 65 000 (as further detailed in the draft law) . In addition, the draft law provides 
for the phased restorati on of the annual remuneration of a public servant where the ir reduced 
annual remuneration is above EUR 65 000 or  EUR 110 000. Finally, the draft law provides the 
Minister with powers to correct anomalies relating to points on the pay scale of the public service 
that may result from the draft law, by increasing the basic salary applicable. A public servant is 
defined in the 2009 Act as a person who is employed by, or who holds  any office or other position 
                                                 
1  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions ( OJ L 189, 3.7.1998, p. 42) . 
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2 in, a public service body. The CBI is explicitly defi ned as coming within the meaning of ‘public 
service body’. It follows, therefore, that the 2009 Act and the draft  law apply to both employees and 
office holders of the CBI.  
1.3 Part 3 of t he draft law  (Pension- related deductions and Pensions)  amends the 2 009 Act to effect a 
reduction in the amount deducted from the salar ies of  persons in the public service who are 
members of an occupational pension scheme or pension arrangement.  The draft law also amends 
the Financial Emergency Measures in the Public Inter est Act 20 10 (hereinafter the ‘2010 Act’) to 
increase the amount of pension and other benefits  payable to or in respect of persons that were in 
the public service under an occupational pension scheme or pension  arrangement. To this end, the 
draft law commences a partial and phased  reversal of the reductions applied to public service 
pensions over the next three years . Public  service pensions are defined as including pensions 
payable to or in respect of a public servant or  former public servant under a publi c service pension 
scheme. Public servants are defined as  persons who are employed by, or who hold any office or 
other position in a public service body,  including the CBI, and include an office holder. Both current 
and former employees and office holders of the CBI come within the scope of application of the 
2010 Act , and thus also the draft law . The Financial Emergency  Measures in the Public Interest 
(Amendment) Act 2011 (hereinafter the ‘2011 Act’) amended the 2010 Act by introducing a 
provision pursuant to which the 2010 Act applies in respect of  employees and office holders of the 
CBI only with its consent, given in writing to the Minister for  Finance by the CBI’s Governor, and 
with the consent of the Minister for Finance.  
1.4 Part 4 of the draft law (Mi scellaneous) amends the 2009 Act so that the pay of public  servants may 
be adjusted to reflect the terms of a collective agreement (the Haddington Road Agreement) .  
1.5  Currently, the CBI enjoys statutory autonomy in determining its staff policy, including  remuneration, 
with the CBI’s officers and employees subject to individual employment contracts  and to collective 
bargaining agreements entered into between the CBI and staff representative groups. The 
measures provided for in the draft law, as is the cas e with the 2009 Act and the 2010 Act, 
represent a departure from that regime in so far as the provisions  proposed are to be imposed 
unilaterally.  
 
2. Central bank independence  
2.1 As the draft law applies to and directly affects the CBI’s decision- making bodies and its employees, 
it should be examined from the perspective of central bank independence, in particular institutional 
and financial independence, as well as that of the personal independence of the members of the 
CBI’s decision -making bodies.  It is worth noting that the draft law commences a partial and phased 
reversal of the provisions of the five FEMPI Acts introduced between 2009 and 2013, on which the 
ECB has already issued its opinion2, by partially reversing the remuneration and pension 
reduct ions to public servants.  Nevertheless, it is worth restating the principles outlined in the ECB’s 
previous opinions . 
                                                 
2  See Opinions  CON/2009/15, CON/2012/6 and CON/2013/46. All ECB opinions are published on the ECB’s website 
at www.ecb.europa.eu.  
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3 2.2 The principle of central bank independence as enshrined in Article 130 of the Treaty prohibits third 
parties, including the governments  of the Member States, from issuing instructions to the national 
central banks (NCBs). In addition, the principle of central bank independence means that third 
parties may not influence, directly or indirectly, an NCB in the performance of its tasks or as 
regards its ability to fulfil its mandate:  both operationally in terms of manpower, and in terms of 
appropriate financial resources3. 
Financial independence  
2.3 Member States may not impair an NCB’s ability to employ and retain the qualified staff necessar y 
for the NCB to perform independently the tasks conferred on it by the Treaty and the Statute of the 
European System of Central Banks and of the European Central Bank. Furthermore, an NCB may 
not be put into a position where it has limited control or no c ontrol over its staff, or where the 
government of a Member State can influence its policy on staff matters. To protect autonomy in 
staff matters, the ECB has consistently recommended in previous opinions and in its convergence 
reports that any amendment to legislation on remuneration for members of an NCB’s decision-
making bodies and its employees should be decided in close and effective cooperation with the 
NCB, taking due account of its views, to ensure the ongoing ability of the NCB to independently 
carry out its tasks. Autonomy in staff matters extends to issues relating to staff pensions4. 
2.4 Given that the CBI’s employees are employed under the conditions (including conditions as to remuneration and allowances) set by the Central Bank Commission
5, in order to protect the CBI’s 
autonomy in staff matters  legislative provisions affecting the remuneration of members of the CBI’s 
decision -making bodies and employees should be drafted in close and effective cooperation with 
the CBI6.  
2.5 As regards  the prov isions on pension- related deductions and pensions applicable to the CBI’s 
officers and employees, the ECB notes that Section 1A of the 2010 Act, as inserted by the 2011 
Act, required  the Minister to obtain the written consent of the CBI’s Governor in respect of 
reductions to pensions of former CBI employees and office holders , and that this consent was 
granted.  
Personal independence of members of the CBI’s decision- making bodies  
2.6 Furthermore, Member States may not seek to influence the members of an NCB’ s decision- making 
bodies by amending national legislation affecting their remuneration. Such  legislation, as a matter 
of principle, should apply only in respect of future appointments7. The draft law applies not only to 
the CBI’s decision- making bodies but  also more generally to all public servants in Ireland who 
come within its scope and, as such, does not seek directly or indirectly to influence the CBI’s 
decision -making bodies in the performance of their tasks. The provisions will therefore be 
considered compatible with the principle of personal independence, as long as the 
                                                 
3  See, for example, the ECB’s Convergence Report 2014, p. 26, and paragraph 6 of Opinion CON/2012/89.  
4  See the ECB’s Convergence Report June 2014, p. 27 and the reference to ECB opinions made there.  
5  See section 6D of the Central Bank of Ireland Act 1942, as inserted by section 7 of the Central Bank and Financial 
Services Authority of Ireland Act 2003 and as amended.  
6  See als o Opinion CON/2012/89 and paragraph 2.6 of Opinion CON/2013/41.  
7  See the ECB’s  Convergence Report June 201 4, p. 2 3. 
ECB -PUBLIC  
4 abovementioned requirements in respect of the principle of financial independence are taken into 
account8. 
 
This opinion will be published on the ECB’s website  
  
Done at Frankfurt am Main,  11 November 2015.  
 [signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
8  See also paragraph 3.2.10 of Opinion CON/2010/80.