Opinion of the European Central Bank of 18 May 2009 on measures on public sector remuneration with regard to central bank independence (CON/2009/47)
Date: 2009-05-18
Institutions: European Central Bank
Subjects: Latvia, central bank, national law, public service employee, remuneration of work

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 18 May 2009  

on measures on public sector remuneration with regard to central bank independence 

(CON/2009/47) 

Introduction and legal basis 

On 8 May 2009 the European Central Bank (ECB) received a request from Latvijas Banka for an opinion 

on  a  draft  law  on  a  uniform  remuneration  system  for  government  and  local  government  officials 

(employees)  (hereinafter  the  ‘draft  law’)  and  its  possible  application  to  Latvijas  Banka.  Although, 

according to its current wording, the draft law does not apply to Latvijas Banka, the consulting authority 

is aware that the Latvian Government is considering applying the draft law to Latvijas Banka and that it is 

highly possible that amendments will be made to the draft law during the legislative process to include 

Latvijas Banka within its scope. 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European Community 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  Latvijas  Banka.  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 

The purpose of the draft law is to establish uniform conditions for determining the remuneration of public 

and local government officials and employees. The draft law sets out principles for establishing monthly 

wages and salaries, additional payments, bonuses and cash awards, allowances, compensation and leave. 

In all other respects the existing provisions of legal acts governing employment will continue to apply.  

The remuneration of members of Parliament and of local government authorities, and the remuneration of 

officials  approved  and  appointed  by  Parliament,  will  be  established  by  linking  it  to  the  average 
remuneration of employees in Latvia2. The remuneration of officials of other public institutions will be 
set according to a scale determined by the Latvian Government3.  

1 
2  
3  

OJ L 189, 3.7.1998, p. 42. 
Article 4(1), Articles 5 and 6 of the draft law. 
Article 4(2) and Article 7 of the draft law. 

 
 
 
 
                                                 
Under  the  draft  law  remuneration  may  be  further  reviewed  as  part  of  the  process  of  drawing  up  or 
amending the state budget4. 

2. 

General observations 

2.1  The ECB recognises the very difficult economic circumstances, both in Latvia and internationally, 

and the current efforts being made by the Latvian Government to stabilise public finances. 

2.2  As  noted  in  the  ECB  Convergence  Report  of  May  2008  under  the  heading  ‘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  conferred  on  it  by  the  Treaty  and  the 
Statute5. 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’6. This point has been stressed by the ECB in its recent opinions on draft Irish and German 
legal  acts  on  matters  concerning  national  central  bank  staff7.  In  its  opinion  on  draft  Italian 

legislation establishing a threshold for the overall remuneration of the national central bank staff, 

the ECB also pointed out ‘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 Statute [of the ESCB]’8. 

3. 

Specific observations 

Under the Law on Latvijas Banka, the remuneration of the Governor of Latvijas Banka, members of the 

Council  of  Latvijas  Banka  and  the  Board,  as  well  as  Latvijas  Banka’s  employees  is  determined  by  the 

Council of Latvijas Banka. The Council of Latvijas Banka also approves the staff numbers and positions. 

In order to protect Latvijas Banka’s autonomy in staff matters, which is a particular aspect of the principle 

of  central  bank  independence  under  Article  108  of  the  Treaty,  the  Latvian  authorities  are  under  an 

obligation  to  ensure  that  any  determination  of  the  remuneration  of  the  employees,  members  of  the 

Council and of the Board, and the Governor of Latvijas Banka is decided in cooperation with the Council 

of Latvijas Banka, taking into account its specific central bank tasks and the need to ensure compliance 
with  the  prohibition  of  monetary  financing  in  Article 101  of  the  Treaty9.  To  this  end,  such  cooperation 

should take due account of the views of Latvijas Banka. 

4  
5  

6  
7  

8  
9  

Article 3(5) of the draft law. 
‘Statute’ refers to the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the 
‘Statute of the ESCB’). 
ECB Convergence Report of May 2008, p. 22.  
See paragraph 2.2 of Opinion CON/2009/15 and paragraph 2.2 of Opinion CON/2008/9. All ECB opinions are available 
on the ECB website at www.ecb.europa.eu/ecb/legal/opinions/html/index.en.html.   
See paragraph 3.2.2 of Opinion CON/2008/10.  
As implemented by Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application 
of the prohibitions referred to in Articles 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1.). 

2 

 
 
 
                                                 
This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 18 May 2009. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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