EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 12 July 2010 
on amendments to the Law on the Magyar Nemzeti Bank introducing salary reductions 
(CON/2010/56) 
 Introduction and legal basis
 
On 1 July 2010, the European Central Bank (ECB) received a request from the Hungarian Ministry of the 
National Economy for an opinion on a draft law amending, inter alia , the Law on the Magyar Nemzeti 
Bank (hereinafter the ‘draft law’)1. 
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 law relates to the Magyar Nemzeti Bank (MNB). In accordance with 
the first sentence of Article 17.5 of the Rules of Pr ocedure of the European Central Bank, the Governing 
Council has adopted this opinion. 
 1.  Purpose of the draft law 
1.1  On 8 June 2010 the Hungarian Prime Minister announced an action plan containing 29 measures to 
establish a balanced budget. One of these measure s is the implementation of a HUF 2 000 000 
monthly wage ceiling in the public sector. This is equal to 10 times the average gross monthly 
salary of employees in the national economy. Acco rding to the explanatory memorandum attached 
to the draft law, the proposed measure woul d allow a more performance-based and equitable 
income distribution in the public sector and would strengthen the public administration’s efficiency.  
1.2 Article 95 of the draft law will amend Article 53(1) of Act LVIII of 2001 on the  Magyar Nemzeti 
Bank (hereinafter ‘Law on the MNB’) according to which the total salary of the MNB’s Governor in a given year will be the total salary established for the Governor for the preceding year, increased by the increment calculated on the basis of the consumer price index expected for the 
current year, as contained in the convergence programme submitted to the Commission of the 
                                                 
1  Draft law T/581 on the adoption and amendment of certain ec onomic and financial legal acts, submitted to the Parliament 
by the Minister for the National Economy on 2 July 2010. Ar ticle 95 submitted to the ECB amends the Law on the MNB. 
2  OJ L 189, 3.7.1998, p. 42. 
2 European Union in the preceding year. Furthermore,  according to the ECB’s information, the ‘total 
salary of the Magyar Nemzeti Bank’s Governor’ h as been determined in a shareholder resolution 
by the Minister for Finance on behalf of the Hunga rian State in 2000 and has been subject since to 
Article 53(1) of the Law on the MNB. The propo sed provision intends to introduce a ceiling on the 
Governor’s salary providing that ‘the total mont hly salary of the MNB’s Governor shall be, in the 
period from 1 March of a given year to the end of  February of the next year, 10 times the average 
gross monthly salary of employees in the national economy of the previous year, as officially published by the Central Statistical Office’. 
1.3  In addition to the Governor, the Deputy Gover nors, the members of the Monetary Council and the 
Supervisory Board are also affected by the draft la w, since their salary is based on the Governor‘s 
salary under Article 53 of the Law on the MNB. Against this background, the proposed changes 
result in a decrease of approximately 75%, compared to the Governor’s present salary, and accordingly the proposed cut in salary would also result in a decrease in the salary of the Deputy 
Governors, as well as the members of the MNB’s Monetary Council and Supervisory Board. 
 2. General observations The appropriate time to consult the ECB 2.1 The consulting authority submitted Article 95 of the draft law to the ECB on 1 July 2010, 
requesting the ECB’s opinion as soon as possible. A ccording to information received by the ECB, 
the Parliament expects to adopt the draft law be fore 19 July 2010 when the spring session of the 
parliamentary legislative process ends. Once adopted by the Parliament, the relevant provisions of 
the draft law will enter into force on the eighth da y following its publication.  Moreover, no explicit 
time limit for submission of the opinion has been se t. Since the date of receipt of the consultation 
request, further steps towards the adoption of th e draft law have been taken in the Hungarian 
Parliament. 
2.2 In cases of particular urgency that do not a llow for a normal consultation period, the consulting 
authority may indicate urgency in the consultati on request and ask for a shorter deadline for the 
ECB’s opinion to be adopted. The ECB would lik e to emphasise that even in such cases a 
minimum one-month deadline appli es according to Article 3(1) of Decision 98/415/EC. This does 
not prejudice the consulting authority’s duty under Articles 127(4) and 282(5) of the Treaty to consult the ECB on national draft legislative provision s falling within its fields of competence at an 
appropriate stage in the national legislation pr ocess, as provided by the second sentence of Article 4 
of Decision 98/415/EC. This implies that the c onsultation should take place at a point in the 
legislative process which affords the ECB sufficient time to examine the draft legislative provisions 
and to adopt its opinion in all required language versions, and wh ich also enables the relevant 
national authorities to take the ECB’s opinion into  consideration before the provisions are adopted. 
3 Article 3(4) of Decision 98/415/EC also obliges Me mber States to suspe nd the adoption process for 
draft legislative provisions, pending receipt of the ECB’s opinion. 
2.3.  In the event of extreme urgency, the time li mit of one month may be reduced. In accordance with 
Article 3(2) of Decision 98/415/EC, the consulting au thority shall state the reasons for the urgency. 
The ECB considers that the justification provided by the consulting authority cannot be considered 
as a case of extreme urgency within the meaning of Article 3(2). 
2.4  The ECB reiterates its position that even cases of particular urgency do not relieve national 
authorities from their duty to consult the ECB and to  allow sufficient time to take into account its 
views in accordance with Decision 98/415/EC. Any s ubstantive amendments to the draft law have 
to be submitted to the ECB to allow it to adopt its  opinion on the most recent text. Furthermore, 
with respect to the present consultation, the process  of adoption of the draft law should have been 
suspended. The ECB’s comments on the provisions on which it was consulted do not eliminate the 
breach of the obligation to consult it. The ECB would appreciate the Ministry for the National 
Economy giving due consideration to honouring its obligation to consult the ECB in the future. 
Legislation subject to consultation 2.5 The ECB understands that the draft law amends several legal acts including the Law on the MNB. 
This opinion only covers Article 95 of the draft la w that the consulting authority has submitted for 
consultation. The ECB also advises that this Opinion is without prejudice to any other ECB 
opinions concerning the legal acts affected by the draft law and falling under the ECB’s 
competence. The ECB expects to be consulted also on such matters. 
 3. Central bank independence 3.1 When a Statute of a national central bank (NCB) (in this case the Law on the MNB) is amended, 
the amending law should ensure that central bank independence guaranteed by Article 130 of the 
Treaty and Article 7 and Article 14.2 of the Statute of the ESCB and the ECB (hereinafter the ‘Statute of the ESCB’) is respected. Compatibility of a Member State’s legislation, including its 
NCB’s Statute, with the requirements of the Trea ty and the Statute of the ESCB concerning central 
bank independence must be ensured on accession to the Union. Compatibility with Article 130 of 
the Treaty and Article 7 of the Statute of the ESCB is a fundamental aspect of the legal convergence in a Member State examined in the co nvergence reports required by Article 140(1) of 
the Treaty to assess a country’s r eadiness to join the euro area. 
Financial independence  
3.2 As recalled in the ECB Convergence Reports 2008 and 2010 and stressed in several ECB opinions
3 
on issues concerning autonomy in staff matters, an  aspect of an NCB’s financial independence, 
                                                 
3  ECB Opinions CON/2008/9, C ON/2008/10, CON/2009/45, C ON/2009/47, CON/2010/42 and CON/2010/51. All ECB 
opinions are available on the ECB’s website at www.ecb.europa.eu. 
4 Member States may not impair an NCB’s ability to  employ and retain the qualified staff necessary 
for the NCB 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 control over its staff, or where the government of a Member State is in a position to 
influence the NCB’s policy on staff matters.  
3.3 By amending Article 53(1) of the Law on the MNB, Article 95 of the draft law introduces a 
threshold for the Governor’s salary which results  in a decrease of the Governor’s salary and 
consequently the salaries of the Deputy Governor s and the members of the Monetary Council and 
the Supervisory Board.  
3.4 To protect the MNB’s autonomy in staff matters, part of the principle of central bank independence 
under Article 130 of the Treaty, the Hungarian aut horities have an obligation to ensure that any 
amendment to the legislative provisions on the re muneration of the MNB’s staff is decided in 
cooperation with the MNB, taking due account of the MNB’s views
4. 
Personal independence of the members of MNB’s decision-making bodies 3.5 To comply with the Treaty requirements fo r personal independence of the members of NCB’s 
decision-making bodies who are involved in th e performance of ESCB-related tasks, any 
amendment to the salaries of the Governor an d other members of the MNB’s decision-making 
bodies who are involved in the performance of ES CB-related tasks should not affect the terms 
under which they have been appointed. Consequently , the draft law should specifically provide that 
such an amendment may apply only to future appointments
5. 
Conclusion 3.6 For these reasons the process for adoption of the draft law should ensure the involvement of the 
MNB and the draft law should be  amended to comply with the principle of central bank 
independence. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 12 July 2010. 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
4  See for example paragraph 4.3 of ECB Opinion CON/2010/42. 
5  See paragraph 3.2.2 of ECB Opini on CON/2008/10 and ECB Opinion CON/2010/42.