EN ECB -PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 26 May 2014  
on the remuneration of staff and members of decision -making bodies of the Banca d’Italia and 
taxation of its revalued shares  
(CON/201 4/38) 
 
Introduction and legal basis  
On 7 May 2014, the European Central  Bank (ECB) received a request from the Ministry of Economy and 
Finance for an opinion on Articles 4 (12) and 13( 5) of Decree- Law No 66 of 24 April 2014 on urgent 
measures for competitiveness and social justice (hereinafter the ‘ Decree- Law’)1. 
The ECB’s com petence 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/EC2, 
as the Law relates to the Banca d’Italia. In accordance with th e 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 Decree -Law 
1.1  Under Italian l aw, the level of remuneration of the First President of the Supreme Court  of 
Cassation represents a ceiling on the remuneration of managers of publicly -owned companies , as 
well as on  individual s receiving salaries and other types of compensation from public authorities. 
Article 13 (1) of the Decree -Law caps such remuneratio n at EUR 240  000 and pursuant to Article 
13(5) of the Decree -Law, the Banca d’Italia is expected to adapt its institutional set -up to this 
principle.  
1.2  Decree- Law No 133 of 30 November 20133, converted with amendments into Law No 5 of 
29 January 20144, provided for an increase in the Banca d’ Italia’s capital. The level of capital , 
which  had been set by the Banking Law of 1936 at E UR 156 000, was raised to EUR 7.5 billion 
and the shares  held by shareholders were  revalued accordingly5. The Decree- Law provi des that the 
higher values recorded in the financial statements for the financial year ending  31 December 2013 
are subject to a substitute tax, rather than  income tax, any regional tax on productive activities , as 
                                                 
1 Gazzetta Ufficiale della Repubblica Italiana  No 95, 24.4.2014.  
2 Council Decision 98/415/EC of 29 June 1998 on the Consultation of the E uropean Union by national a uthorities 
regarding draft legislative provisions  (OJ 189, 3.7.1998, p. 2 ). 
3 Gazzetta Uffic iale della Repubblica Italiana No 281, 30.11.2013.  
4 Gazzetta ufficiale della Repubblica Italiana  No 23, 29.1.2014.  
5 The ECB was consulted on the capital increase and the envisaged amendments to the Statute of the Banca d’Italia and 
delivered Opinions CON /2014/39 and CON/2013/96 . All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu.  
ECB -PUBLIC  
2 well as any surcharges. T he substitute tax  is 26 per cent of the nominal value of shares at that date  
and it must be paid in full in a single instalment by the date for final settlement of income tax for 
the tax period including  31 December 2013.  
 
2.  The appropriate time to consult the ECB  
2.1 The ECB must be consulted at an appropriate stage in the legislative process, i.e. at a time t hat 
enables the ECB to adopt its opinion in all required language versions and t hat enables the 
authority initiating the legislative provision to take the ECB’s opi nion into account befor e it 
decides on the substance6. 
2.2 In the Italian legal system, a decree- law, adopted by the Government, enters into force on 
publication in the Gazzetta Ufficiale  and must be submitted on the same day to Parliament for 
conversion i nto law on the da te of its adoption. If not converted within 60 days of publication, the 
decree- law is rendered invalid  with retroactive  application . In the light of the above, the ECB 
should be consulted before adoption of a d ecree- law7. 
2.3 In this case, the Decree- Law was adopted on 24 April 2014 and published in the Gazzetta Ufficiale  
on the same date. However, t he consultation request was made well after the entry in to force of the 
Decree- Law. In its request, t he Ministry of Economy and Finance maintai ns that the Decree -Law 
was adopted as a matter of urgency , but no specific reasons for such urgency were provided. A 
request for an opinion made after submission of the Decree -Law to Parliament for conversion is not 
in compliance  with the obligation  to consult the ECB,  and the ECB would like to draw the 
Ministry’s attention to the proper procedure for consultation.  
 3.  General observations  
3.1 Article 13  of the Decree- Law, which concerns  the remuneration paid to individual s from  public 
finances, is found under Title II ‘ Savings and efficiency of public spending’ , Chapter II 
‘Conservative administration’ . Accordingly, the ECB understands that Article 13 (1) of the Decree-
Law aims to regul ate the remuneration of civil servants  and public managers as well as  the 
remuneration of any one receiving any  kind of remuneration from public authorities , irrespective of 
their employment status.  
3.2 The ECB also notes that Article 4 (12) of the Decree -Law materially amends the tax regime  
applicable to  the revalued shares of the Banca d’Italia, as previously laid down by Article 1( 148) of 
Law No 147 of 27 December 2013. It is for the European Commission’s task  to assess whether the 
share revaluation and the amendments made to the tax regime comply with Union l aw. 
 
                                                 
6 See Title IV, Section I of the Guide to consultation of the European Central Bank by national authorities regarding draft 
legislative provisions . 
7 See Op inions CON/2012/64, CON/2012/61 and CON/2012/20.  
ECB -PUBLIC  
3 4.  Specific  observations  
4.1 Financial independence  
4.1.1  The ECB has a well-established  doctrine that autonomy in staff matters is an integral  aspect of the 
principle of  financial  independence of national central banks (NCBs). According to this principle , 
Member St ates may not impair an NCB’s ability to recruit and retain the qualified staff necessary 
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 Bank8. Additionally , an NCB may 
not be put into a position where it has limited control or no control over its staff, or where the 
government of a Member State can inﬂuence its policy on staff matters. Furthermore, any 
amendment to the legislative provisions on the remuneration of members of an NCB’s decision -
making bodies and its employees should be decided in close and effective cooperation with the NCB to ensure the ongoing ability of the NCB to independently carry out its tasks. 
4.1.2  The ECB notes that the c eiling of EUR 240 000 on remuneration is expressly described as a 
principle
9 or a guideline10, rather than a rule requiring strict compliance. In the light of the above , 
the ECB understands that the Decree -Law requires the Banca d’Italia to : (a) assess whet her the 
Decree- Law’s principle can be implemented without prejudice to the Banca d’Italia’s autonomy in 
staff matters; and (b) take measures in accordance with this principle only if and to the extent 
compatible with its ability to independently carry out its tasks. The ECB also understands that the annual ordinary meeting of shareholders retains its competence with regard to the compensation of 
members of the Board of Auditors, the regents of the main offices and the councillors of the local branches , and that the Board of Directors is responsible for , inter alia , general administration, 
management supervision and internal control of the bank, determining the compensation of the 
members of the Governing Board, approval of the Ban ca d’Italia’s internal regulations , determinin g 
staffing levels , recruitment and dismissal of employees, and approval of agreements negotiated 
with trade unions
11. Based on these understandings, the Decree- Law can be considered compatible 
with the principle of financial independence12. 
4.2 Use of funds resulting from a possible reduction in remuneration of staff and members of decision-
making bodies in  the Banca d’Italia.  
4.2.1  The ECB notes that pursuant to Article 1(474) and (475) of Law No 147 of 27 December 2013, and 
Article 23(4) t er of Decree -Law No 95 of 6 July 2012, converted with amendments into Law 
No 135 of 7 August 2012, savings resulting from the implementation of Article 23 ter  thereof must 
                                                 
8 See Opinions CON/2008/9, CON/2008/10, CON/2009/ 45, CON/2009/47, CON/2010/42,  CON/2010/51, CON/2013/92, 
CON/2014/12.  
9 Article 13(5) of the Decree-Law.  
10 See reference to the Technical Report attach ed to th e Decree- Law submitted to the Parliament, found in the Italian 
Senate’s  ‘Nota di lettura ’ on A.S. 1465 ‘Conversione in legge del decreto -legge 24 aprile 2014, n. 66, recante misure 
urgenti per la competitività e la giustizia sociale ’ (Reading note on A.S. 1465 Conversion into law  of the Decree- Law 
No 66 of 24 April 2014 on urgent measures for competitiveness and social justice ), available on the Italian Senate’s 
website at www.senato.it . 
11 See Articles 7 and 19 of the Statute of the Banca d’Italia.  
12 See Opi nions CON/2010/ 58 and CON/2013/92.  
ECB -PUBLIC  
4 be paid into the ‘ Fund for amortisation of government securities ’, which are then tr ansferred to the 
Italian State. I t is unclear whether such a rule is intended to apply to savings stemming from the 
reduction of the remuneration of the staff of the Banca d’Italia and the members of its decision -
making bodies13. 
4.2.2  If such a rule applie s to the Banca d’Italia, from an accounting perspective, a decrease in 
remuneration of staff and members of its decision- making bodies will de facto  decrease the 
operational costs of the Banca d’Italia, hence potentially increasing its reported profits. An interim 
distribution of increased profits from the Banca d’Italia to the State, without the Banca d’Italia 
having the opportunity to use the related resources independently for the fulfilment of its tasks, 
could be equated with monetary financing , which i s clearly prohibited under Article 123 of the 
Treaty14. By contrast, a decrease in the Banca d’Italia’s operational costs with a view to increasing 
its own financial resources to strengthen the performance of its mandate would be acceptable15. In 
addition, t he principle of central bank financial independence guarantees that the Banca d’Italia can 
independently use its financial resources as it sees fit to fulfil its mandate. The ECB notes that the 
Banca d’Italia must be fully independent in deciding how to us e the funds resulting from any 
reduction in salaries that it pays16. In conclusion, the application of the rule that savings resulting  
from the implementation of Article 23 bis thereof are paid into the Fund for amorti sation of 
government securities if appl ied to the Banca d’Italia, is not compatible with the principle of 
financial independence and could be equated with  monetary financing , which is clearly prohibited 
under Article 123 of the Treaty.  
4.3 Personal independence of the members of the B anca d’It alia’s decision making -bodies  
4.3.1  Article 130 of the Treaty prohibits, inter alia, national governments from influencing the members of NCBs’ decision -making bodies in the performance of their tasks. In this  case, the ceiling in 
respect of remuneration i s not specifically addressed to the staff and members of decision- making 
bodies of the Banca d’Italia. In fact , it forms part of a broader legislative reform that seeks to 
reduce remuneration of officials, employees and managers of public administrations a nd publicly -
owned companies.  
                                                 
13  See the Italian Senate’s  ‘Nota di lettura ’ on A.S. 1465 ‘Conversione in legge del decreto -legge 24 aprile 2014, n. 66, 
recante misure urgenti per la competitività e la giustizia sociale ’ (‘Reading note ’ on A.S. 1465  ‘Conversion into law  of 
Decree- Law No 66 of 24 April 2014 on urgent measures for competitiveness and social justice ’). 
14  This provision prohibits overdraft facilities or any other type of credit facility with the ECB or NCBs in favour of Union 
institutions,  bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies 
governed by public law, or public undertakings of Member States, and the purchase directly from these public sector 
entities by the ECB or NCBs of debt instruments. With a view to preserving the integrity of the NCB’s balance sheet, the 
monetary financing prohibition is of key importance in ensuring the primary monetary policy objective of price stability, 
which must not be impeded. Even if Article 123(1) of the Treaty refers literally to ‘credit facilities’, i.e. with an 
obligation to repay such credit, the prohibition also applies a fortiori to other forms of funding, i.e. without an obligation 
to repay, since it has the overall aim of public financ e discipline and of  prohibiting NCBs from financing the public 
sector.  
15 See Opinions CON/2010/51, CON/2010/69 and CON/2010/80.  
16 See Opinion CON/2010/80.  
ECB -PUBLIC  
5 4.3.2  However, as underlined by the ECB in several opinions  and in the ECB Convergence Reports17, 
Member States may not seek to influence the members of the NCB’s decision -making bodies by 
amending national legislation affecting  their remuneration, which, as a matter of principle, should 
not affect the terms under which they have been appointed. Consequently, Article 13(5) of the 
Decree- Law should specifically refer not only to the institutional and financial independence of the 
Banca d’Italia, but also to the personal independence of the members of the Banca d’Italia’s 
decision -making bodies18. 
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main, 26 May 2014.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
17 See Opinion CON/2014/12 . 
18  See the ECB’s Convergence Report, 2013, p. 23 and Opinions CON/2011/104, CON/2011/106, CON/2008/10 , 
CON/2010/42 and CON/2014/12.