EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 24 February 2009  
on a draft Financial Emer gency Measures in the Public Interest Bill 2009 
(CON/2009/15) 
 
Introduction and legal basis  
On 18 February 2009 a draft ‘Financial Emergency Measu res in the Public Interest Bill 2009’ (hereinafter 
the ‘draft law’) was published by the Irish Minister fo r Finance (hereinafter ‘the Minister’) for its first 
stage reading before the Dáil Éireann , the lower house of the Oireachtas  (the National Parliament). The 
second stage debate on the draft law took place in the Dáil Éireann  on 19 February 2009. Specific 
amendments are due to be considered by the relevant committee of the Houses of the Oireachtas  
(Dáil Éireann  and Seaned Éireann ) on 24 February 2009 with final adoption expected by both Houses the 
following day. 
The competence of the European Central Bank (ECB) to deliver an opinion is based on Article 105(4) of 
the Treaty establishing the European Co mmunity 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 provisions1, as the draft law relates to the Central Bank and Fi nancial Services 
Authority of Ireland (hereinafter ‘the Central Bank’).  
In particular, the draft law proposes to deduct up to 10% from the remuneration of public servants 
accruing from 1 March 20092, including employees of the Central Bank. In the light of the above and 
considering the direct implications of the aboveme ntioned provisions for the Central Bank, the ECB has 
decided to submit this own-initiative opinion, with a view  to assisting in the ongoing legislative procedure 
by commenting on specific provisions. 
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 proposes to deduct up to 10 % from the remuneration of public servants accruing 
from 1 March 2009. For the purposes of the draft law, a public servant is defined, inter alia , as a 
                                                 
1   OJ L 189, 3.7.1998, p. 42. 
2  Section 2(3) of the draft law. Where the amount of remuneration of a public servant from 1 March to 31 December 2009 
or any year beginning in 2010 is over €20 000, the rate of de duction is 10 %. The rate of deduction is 3 % where the 
amount of remuneration is up to €15 000 and 6 % where the amount is in excess of €15 000 but not over €20 000.  
2 person who is employed by, or who holds any o ffice or other position in, a public service body3. 
The draft law includes the Central Bank within its list of public service bodies4. Under the draft 
law, the deduction is to be made  by the person responsible for, or  who authorises, the payment of 
remuneration5, which in the case of the Central Bank’s officers and employees is the Central Bank. 
In addition, the deductions are to be made in acc ordance with regulations to be issued by the 
Minister for the purposes of the calculation, making,  collection, disposal and recovery of such 
deductions (including, for instance, regulations  addressing the manner in which and the periods 
within which deductions are to be  made and paid into or disposed of for the benefit of the 
Exchequer)6. The draft law further requires the deductions ma de to be paid into or disposed of for 
the benefit of the Exchequer in acco rdance with the directions of the Minister or otherwise paid or 
disposed of as the Minister may direct7. 
1.2 The draft law has been introduced in the context of the priority being given to the stabilisation of 
public finances in Ireland. To that effect, the Mi nister has announced that the draft law introduces 
provisions to give effect to a pensi on related deduction for the public service8. The deductions 
under the draft law therefore apply to public ser vants who on 1 March 2009 or any time afterwards 
are a member of a public service pension scheme, are entitled to a benefit under such a scheme, or 
receive a payment in lieu of membership in such a scheme9. For this purpose, a public service 
pension scheme is defined to include an occupa tional pension scheme or pension arrangement for 
any part of the public service which is made by a re levant Minister or has been approved or requires 
the approval or consent of a relevant Minister10. Under the Central Bank Acts, the Central Bank 
may establish and operate one or more supe rannuation schemes under which superannuation 
benefits are payable on the retirement or death of  persons. However, such a scheme does not take 
effect until it has been approved by the Minister11.   
1.3 The draft law exempts from the definition of ‘ public service bodies’ 22 bodies whose officers and 
employees are subject to the deductions12. The Explanatory Memorandum to the draft law indicates 
                                                 
3  Section 1(a) of the draft law. 
4  Section 1(d) of the draft law. 
5  Section 2(3) of the draft law. 
6  Section 2(4) and Section 3 of the draft law. 
7  Section 4(1) of the draft law. 
8  Available on the Department of Fi nances’ website at www.finance.gov.ie. 
9  Section 2(1) of the draft law. 
10  Section 1 of the draft law.  The Central Bank and Fi nancial Services Authority of  Ireland Superannuation Scheme 
received approval of the Minister on 8 April 2008 under S.I. No. 99 of 2008. 
11  Section 33AG(2) of the Central Bank Ac t 1942. A superannuation scheme  established by the Central Bank is required to 
be embodied in rules made by the Central Bank. Such ru les are required to be laid before each House of the Oireachtas  
(National Parliament) as soon as  practicable after they are made, and if eith er House, within the 21 days on which it has 
sat after the rules are laid before it, passes a resolution annu lling the rules, the rules are accordingly annulled, but withou t 
affecting the validity of an ything previously done under them. See Sect ion 33AG(3) and (7) of the Central Bank 
Act 1942. 
12  See the Schedule to the draft law. 
3 that the public service bodies whose officers and employees are subject to the deductions include 
non-commercial semi-state bodies where a public ser vice pension scheme exists or may be made13. 
 2. General observations 2.1 The ECB recognises the very difficult economic circ umstances, both in Ireland and internationally, 
that have led to the current efforts being made by  the Irish Government to stabilise public finances. 
2.2 As noted in the ECB Convergence Report 2008 un der the sub-chapter ‘Autonomy in staff matters’, 
‘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 conf erred on it by the Treaty and the Statute’ of the 
European System of Central Banks and of the European Central Bank (hereinafter the ‘ESCB 
Statute’). ‘In addition, 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 its policy on 
staff matters’
14. This point has been stressed in a recent ECB opinion on draft German legislation 
regulating certain matters concerni ng the national central bank staff15. The ECB also stated in its 
opinion on draft Italian legislation establishing a threshold for the overall remuneration of the 
national central bank staff ‘that the ECB defines autonomously its staff’s conditions of employment 
and that this autonomy forms part of the ECB’s independence as guaranteed by Article 108 of the 
Treaty and Article 36 of the [ESCB Statute]’16. 
 3. Specific observations 3.1 The proposed deductions are conceived as pens ion-related deductions for the public service. 
However, while the Minister formally approves the Central Bank’s superannuation scheme, the 
Central Bank’s scheme is not funded through the Exchequer, but is esta blished, operated and 
financed by the Central Bank independently. In th is regard, the proposed deductions do not appear 
to reflect the distinctive features of the Centra l Bank’s superannuation scheme, and might therefore 
be regarded as a form of taxation on the Central Bank’s officers and employees.  
3.2 Under the Central Bank Acts, the employees of the Central Bank are to be employed on such 
conditions (including conditions as to remunerati on and allowances) as the Central Bank’s Board 
of Directors fixes from time to time
17. In order to protect the Central Bank’s autonomy in staff 
matters, which is a particular aspect of the pr inciple of central bank independence under Article 
108 of the Treaty, any pension-related deductions applicable to the officers and employees of the 
Central Bank in view of the current difficult economic circumstances should be decided in 
                                                 
13  Explanatory Memorandum to Financial Emergency Meas ures in the Public Interest Bill 2009, p. 1. 
14  ECB Convergence Report May 2008, p. 22.  
15  See paragraph 2.2 of ECB Opinion CON/2008/9 of 21 February  2008 at the request of the German Ministry of Finance 
on a draft law amending the Law on the Deutsche Bundesbank.  
16  See paragraph 3.2.2 of ECB Opinion CON/2008/10 of 21 Febr uary 2008 at the request of the Italian Ministry of 
Economic Affairs and Finance on some provisions of the Law on the State annual a nd pluriannual budget (2008 budget 
law).  
17  See Section 6D(5) of the Central Bank Act 1942. 
4 cooperation with the appropriate decision-maki ng bodies of the Central Bank. Such cooperation 
with the Central Bank should also ensure comp liance with the Treaty provisions on the prohibition 
of monetary financing established by Article 10118. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 24 February 2009. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
18  Compliance with the monetary financi ng prohibition requires that, in connection with the way the proposed arrangements 
between the Central Bank and the Exchequer are legally regulat ed and executed, no element of provision of Central Bank 
credit to the Exchequer arises in the form of Central Bank fi nancing of public sector obligati ons vis-à-vis third parties or 
otherwise. See Article 1(1)(b)(ii) of Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for 
the application of the prohibitions referred to in Artic les 104 [now 101] and 104b(1) [now 103(1)] of the Treaty 
(OJ L 332, 31.12.1993, p. 1); See also the eleventh recital of  Regulation (EC) No 3603/93, i ndicating the need to ensure 
that central bank transactions ‘do not result overall in a credit fo r the public sector'.