Opinion of the European Central Bank of 12 April 2011 on the draft Constitution with regard to the Magyar Nemzeti Bank (CON/2011/33)
Date: 2011-04-12
Institutions: European Central Bank
Subjects: Hungary, central bank, constitution, institutional activity, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 12 April 2011 

on the draft Constitution with regard to the Magyar Nemzeti Bank 

(CON/2011/33) 

Introduction and legal basis 

On  16  March  and  23  March  2011  the  European  Central  Bank  (ECB)  received  a  request  from  the 

Hungarian  Ministry  of  Public  Administration  and  Justice  and  the  Hungarian  Ministry  of  the  National 

Economy respectively for an opinion on the draft Constitution (hereinafter the ‘draft Constitution’). On 

4 April 2011, the Hungarian Ministry of Public Administration requested the ECB’s opinion also on two 

amending proposals that had been submitted to the Parliament for adoption before 11 April 2011.  

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  Central  Bank  by  national  authorities  regarding  draft 
legislative  provisions1,  as  the  draft  Constitution  relates  to  the  Magyar  Nemzeti  Bank  (MNB).  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 Constitution 

The purpose of the draft Constitution is to replace Law XX of 1949 on the Constitution of the Republic of 

Hungary (‘Law XX of 1949’). According to the explanatory memorandum, Law XX of 1949 needed to be 

replaced mainly due to its structure and wording that has become obsolete. This is also confirmed by the 

large number of Constitutional Court decisions and the 34 amendments introduced since 1989. 

The  draft  Constitution2  retains  the  provision  that  the  MNB  is  the  central  bank  of  Hungary  and  is 

responsible  for  monetary policy  in  the manner  specified  by  law.  It  also  overall  retains  the  appointment 

procedure  for  the  MNB’s  Governor,  except  that  the  term  is  extended  from  six  to  nine  years  and  the 

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2  

OJ L 189, 3.7.1998, p. 42. 
Article 41. 

 
 
 
 
 
 
                                                 
MNB’s  Deputy  Governors  will  be  appointed  by  the  MNB’s  Governor3.  The  Governor  will  also  be  a 

Fiscal  Council  member.  The  MNB’s  reporting  obligations  and  its  Governor’s  legislative  powers  will 

remain unchanged.  

The  two  amending proposals  foresee  that  (i)  the  Law  on  the  Magyar  Nemzeti  Bank  will  be  a  qualified 
legal act4 (hereinafter the ‘first amending proposal’)5 and (ii) the appointment and term of office of the 

MNB’s Governor and the Deputy Governors will be amended in the draft Constitution, and the Law on 

the MNB and the Law on the supervision of the financial intermediary system will be qualified legal acts 
(hereinafter the ‘second amending proposal’)6. 

2. 

Compatibility of the Constitution with the Treaties and the Statute of the European System 

of Central Banks and of the European Central Bank 

2.1   The ECB has assessed the compatibility of Hungarian legislation with the requirements of Union 

law relating to central bank independence, monetary financing and also the MNB’s participation in 

the ESCB and, prospectively, in the Eurosystem in its Convergence Reports since 2004, including 

Law  XX  of  1949.  In  the  latest  2010  Convergence  Report,  the  ECB  found  that  Article  32/D  of 

Law XX  of  1949,  which  establishes  the  MNB’s  powers  in  the  field  of  monetary policy, does  not 

recognise  the  ECB’s  powers  in  this  field.  The  ECB  notes  that  the  relevant  provision  in  the  draft 

Constitution remains the same as in Law XX of 1949. Hungary is a Member State with a derogation 

and  must  therefore  comply  with  all  adaptation  requirements  under  the  Treaty.  The  Hungarian 

authorities should, therefore, take this opportunity to make the necessary adjustments to ensure the 

MNB’s full integration into the Eurosystem which must enter into force on Hungary’s adoption of 

the euro.  

2.2.  The ECB would like to refer to its previous stance observing that Union law does not prescribe the 

manner in which national legislation should be adapted to achieve compatibility with the relevant 

requirements under the Treaty and the Statute of the European System of Central Banks and of the 

European Central Bank (hereinafter the ‘Statute of the ESCB’). This may be achieved by referring 

to the Treaty and the Statute of the ESCB, by incorporating provisions thereof and referring to their 
source, by deleting any incompatibility, or by using a combination of these methods7. Depending on 

the national legislator’s choice, and in line with the hierarchy of national legislation, such changes 

may be introduced in constitutional provisions, ordinary legislation, or both. 

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6  
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According  to  the  second  amending  proposal,  the  current  appointment  procedure  also  remains  overall  unchanged: 
Hungary’s President appoints the Governor and the Deputy Governors for six years, except that the Constitution will no 
longer provide for the Prime Minister’s right to recommend a candidate. 
A qualified or ’organic’ legal act could be adopted or amended only by a two-thirds majoriry vote.  
Amending proposal T/2627/55. 
Amending proposal T/2627/129. 
Convergence Report May 2010, Section 2.2.2.2 p. 17. CON/2011/9, paragraph 2.2. All ECB documents referred to are 
available on the ECB’s website at www.ecb.europa.eu. 

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3. 

Relationship between the draft Constitution and the Law on the Magyar Nemzeti Bank 

According  to  the  draft  Constitution,  the  MNB’s  Governor  may  appoint  the  Deputy  Governors,  while 

according  to Article  51(1)  of  the  Law  on  the  Magyar  Nemzeti  Bank,  Hungary’s  President may  appoint 

and  dismiss  the  Deputy  Governors  on  the  basis  of  the  Governor’s  recommendation  and  the  Prime 

Minister’s  consent.  The  ECB  understands  that  due  to  its  position  in  the  legislative  hierarchy,  the  draft 

Constitution  will  prevail.  Adopting  the  second  amending  proposal  would  overall  maintain  the  current 

appointment procedure.  

On  the  other  hand,  the  draft  Constitution  no  longer  provides  that  Hungary’s  President  dismisses  the 

Deputy  Governors  but  does  not  reassign  this  right.  Therefore,  the  ECB  understands  that  Hungary’s 

President  remains  entitled  to  dismiss  the  Deputy  Governors  on  the  basis  of  the  Law  on  the  Magyar 

Nemzeti Bank.  

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

Done at Frankfurt am Main, 12 April 2011. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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