Opinion of the European Central Bank of 5 April 2012 on amendments to the Law on the Magyar Nemzeti Bank (CON/2012/26)
Date: 2012-04-05
Institutions: European Central Bank
Subjects: Eurosystem, Hungary, central bank, conduct of meetings, euro area, institutional activity, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 5 April 2012 

on amendments to the Law on the Magyar Nemzeti Bank 

(CON/2012/26) 

Introduction and legal basis 

On 7 March 2012, the European Central Bank (ECB) received a request from the Hungarian Ministry for 

the  National  Economy  for  an  opinion  on  a  draft  law  amending  Law  CCVIII  of  2011  on  the  Magyar 
Nemzeti Bank1 (hereinafter the ‘draft law’). 

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 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 Procedure of the European Central Bank, the Governing 

Council has adopted this opinion. 

1.  

Purpose of the draft law 

The  draft  law  will  repeal  certain  provisions  of  Law  CCVIII  of  2011  on  the  Magyar  Nemzeti  Bank 

(hereinafter the ‘MNB Law’).  

According  to  the  draft  law,  Article  34  of  the  MNB  Law  on  the  obligation  of  the  MNB  to  submit  the 

agendas  for  Monetary  Council  meetings  to  the  Government  and  on  the  right  of  the  Government’s 

representative to be present at Monetary Council meetings will be repealed. 

The  draft  law  repeals  Article  46(10)  of  the  MNB  Law,  thereby  cancelling  the  two  specific  dismissal 

scenarios. 

Furthermore, the draft law repeals Article 46(17) of the MNB Law that provides for the abolition of the 

Monetary Council on Hungary joining the euro zone. 

The  draft  law  also  repeals  Article  30  of  the  Transitional  Provisions  to  Hungary’s  Fundamental  Law, 

thereby  deleting  the  legal  provisions  regarding  the  possibility  of  a  merger  between  the  MNB  and  the 

Hungarian Financial Supervisory Authority (FSA). 

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2 

Magyar Közlöny, 2011/166., 30.12.2011, p. 41648. 
OJ L 189, 3.7.1998, p. 42. 

 
 
 
 
 
                                                 
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2.   General observations 

Some of the ECB’s earlier observations in Opinion CON/2011/106 regarding the principle of central bank 

independence have been taken into account by deleting Article 30 of the Transitional Provisions of the 

Fundamental Law, which would have enabled the MNB to merge with the FSA.  

3.   The number of Monetary Council members and decision-making 

The ECB reiterates its observations in Opinion CON/2011/104 and CON/2011/106 on the composition of 

the MNB’s decision-making bodies, as well as its observations with regard to the adverse effect of the 

frequent changes to the MNB’s institutional framework. Against the backdrop of the constant changes in 

the composition of the MNB’s decision-making bodies, the increase in the number of Monetary Council 

members, together with the possibility of increasing the number of deputy governors – without consulting 

the  MNB  and  giving  due  consideration  to  its  needs  or  providing  reasonable  arguments  to  support  the 

expansion  against  the  MNB’s  advice  –  gives  rise  to  serious  concerns  whether  this  could  be  used  to 

influence the decision-making process to the detriment of central bank independence.  

4. 

Grounds for dismissal of the members of the Monetary Council  

As stated in the ECB’s Convergence Reports3, the statute of a national central bank (NCB) must ensure 

that Governors may not be dismissed for reasons other than those mentioned in Article 14.2 of the Statute 

of  the  European  System  of  Central  Banks  (hereinafter  the  ‘Statute  of  the  ESCB’).  The  purpose  of  this 

requirement  is  to  prevent  the  authorities  involved  in  the  appointment  of  governors,  particularly  the 

Government or Parliament, from exercising discretion to dismiss a governor. NCB statutes should either 

contain grounds for dismissal that are compatible with those laid down in Article 14.2 of the Statute, or 

omit  any  mention  of  grounds  for  dismissal  since  Article  14.2  is  directly  applicable.  In  addition,  in  the 

light  of  Article  130  of  the  Treaty  and  Article  14.2  of  the  Statute  of  the  ESCB,  personal  independence 

would  be  jeopardised  if  the  same  grounds  for  dismissal  of  governors  were  not  also  to  apply  to  other 
members  of  the decision-making  bodies  of  NCBs  involved  in  the  performance  of  ESCB-related tasks4. 

This applies in particular where a governor is ‘first among equals’ with colleagues with equivalent voting 

rights or where such other members may have to deputise for the Governor. 

The draft law proposes deleting Article 46(10) of the Law on the MNB. Pursuant to Article 46(10) of the 

Law on the MNB, a member of the Monetary Council, including the Governor, as Chair of the Monetary 

Council,  and  the  Deputy  Governors,  may  be  dismissed  only  if  they  no  longer  fulfil  the  conditions 

required  for  the  performance  of  their  duties  or  have  been  guilty  of  serious  misconduct.  Article  46(10) 

provides  that,  for  these  grounds,  the  Governor,  as  Chair  of  the  Monetary  Council,  and  the  Deputy 

Governors,  may  be  dismissed  by  Hungary’s  President  and  that  the  other  members  of  the  Monetary 

3  

4  

In  particular  2010  Convergence  Report,  p.  20.  All  ECB  Opinions  and  Reports  are  available  on  the  ECB’s  website  at 
www.ecb.europa.eu. 
See  paragraph  8  of  Opinion  CON/2004/35;  paragraph  8  of  Opinion  CON/2005/26;  paragraph  3.3  of  Opinion 
CON/2006/44; paragraph 2.6 of Opinion CON/2006/32; and paragraphs 2.3 and 2.4 of Opinion CON/2007/6. 

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Council  may  be  dismissed  by  the  Parliament.  Pursuant  to  Article  47(3)  of  the  Law  on  the  MNB, 

Article 46(10) also applies to the MNB’s Governor, which presumably refers to the Governor outside his 

function as chair of the Monetary Council. There are also other references in the Law on the MNB to 

Article  46(10).  The  draft  law  deletes  Article  46(10)  of  the  Law  on  the  MNB  without  deleting  the 

references to Article 46(10) in Article 47(3) and elsewhere in the Law on the MNB. 

For reasons of legal certainty, the ECB strongly recommends not deleting Article 46(10) of the Law on 

the MNB. Article 46(10) is in line  with the  grounds for dismissal  under  Article 14.2 of the Statute of the 
ESCB5  and  applies  to  all Monetary  Council  members.  Another reason to maintain Article 46(10) of the 

Law on the MNB is that,  if  Article 46(10) is  deleted, neither the  Fundamental  Law nor the Law on  the 

MNB  would  specify  whether  the  Parliament  or  Hungary’s  President  are  empowered  to  dismiss  the 

Monetary Council members.  

5. 

Other remaining concerns related to the Law on the MNB 

5.1 

Salaries  

The  ECB’s  Convergence Reports  in  2008  and  2010,  and  several  ECB  opinions6  on  autonomy  in 

staff matters, stressed that Member States may not impair an NCB’s ability to recruit and retain the 

qualified staff necessary for it 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 decision makers, or where a Member State’s government 

is in a position to influence the NCB’s policy on staff matters.  

To  protect  the  MNB’s  autonomy  in  remuneration  matters,  in  accordance  with  the  principle  of 

central bank independence under Article 130 of the Treaty, the Hungarian authorities must ensure 

that  any  amendment  to  the  legislation  on  the  remuneration  of  the  MNB’s  decision-makers  is 
decided in close cooperation with the MNB, taking due account of the MNB’s views7 regarding the 

impact  of  such  legislative  amendments  on  its  ongoing  ability  to  carry  out  its  tasks.  The  concern 

remains that the repeated amendments since September 2010 to legislation on salaries of members 

of  the  MNB’s  decision-making  bodies  have  been  implemented  without  taking  into  account  the 
above  aspects  of  the  MNB’s  financial  independence  addressed  repeatedly  in  previous  opinions8. 

All  recently  adopted  amendments  applied  from  the  moment  of  their  adoption  to  all  concerned 

subjects. Therefore, the observations in CON/2011/56, CON/2011/104 and CON/2011/106 are still 

valid.  The  remuneration  of  the  current  Governor  and  Deputy  Governors  has  been  significantly 

decreased compared to the remuneration paid at the beginning of their term of office. The manner 

and frequency of these changes in the remuneration of the members of the central bank’s decision-

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6  
7  
8 

The stated aim of the draft law, as specified in the explanatory memorandum, is precisely to bring the Law on the MNB 
in line with the Treaty and the Statute of the ESCB. 
ECB Opinions CON/2008/9, CON/2009/45, CON/2009/47, CON/2010/42, CON/2010/51 and CON/2010/56.  
See for example paragraph 4.3 of ECB Opinion CON/2010/42 and Opinion CON/2010/56. 
See CON/2010/56 and CON/2010/91.  

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making bodies represent signs of pressure on them from the national authorities. Article 51 of the 

Law  on the  MNB  should only  apply  for  future  appointments  and  after taking  due  account of  the 

MNB’s views.  

5.2  Replacement of the Governor 

The  ECB  reiterates  the  observation  in  Opinion  CON/2010/91  related  to  the  replacement  of  the 

MNB’s Governor. Pursuant to Article 47(8) of the Law, the Deputy Chair of the Monetary Council 

may replace the Governor in the latter’s absence. The Law needs to provide sufficient guarantees 

and rules for a successor to the Governor in the event of termination of office due to expiry of the 

term of office, resignation, dismissal or death to avoid any external ad hoc interference and at the 
same time to ensure the smooth and continuous functioning of the Monetary Council9.  

5.3  Oath 

Pursuant to Article 46(7) in conjunction with Article 47(3) and 48(2) of the Law on the MNB, the 

MNB’s  Governor  and  Deputy  Governors  must  take  an  oath  before  Hungary’s  President,  while 

other Monetary Council members take an oath before the Parliament. Law XXVII of 2008 specifies 
the wording of the oath to be taken by public officials appointed by the Parliament10. Therefore, it 

is  not  clear  if  the  same  oath  is  taken  by  the  Governor  and  the  Deputy  Governors  as  the  other 

members of the Monetary Council. The MNB’s Governor acts in a dual capacity as a member of 

the MNB’s Monetary Council and of the ECB’s decision-making bodies. The wording of the oath 

should  take  into  account  and  reflect  the  status  and  the  obligations  and  duties  of  the  MNB’s 

Governor as a member of the ECB’s decision-making bodies.  

Furthermore, the other members of the Monetary Council are also involved in the performance of 

ESCB-related  tasks.  The  oath  should  not  affect  the  personal  independence  of  the  Governor,  the 

Deputy Governors and the other members of the Monetary Council and therefore should not hinder 

them from performing ESCB-related tasks. Articles 46(7), 47(3) and 48(2) of the Law on the MNB, 

and Law XXVII of 2008, need to be adapted in this regard. 

5.4   Jurisdiction of the Court of Justice of the European Union 

Pursuant  to  Article  46(12)  and  (13)  of  the  Law  on  the  MNB,  an  appeal  may  be  brought  in  the 

Labour Court against a motion for dismissal of a member of the Monetary Council, in accordance 

with the Labour Code. As regards the MNB’s Governor, similar provisions apply in Article 47(5) 

and  (6),  and,  as  regards  the  Deputy  Governors,  in  Article  48(2)  of  the  Law  on  the  MNB. 

Articles 47(5)  and  46(12) of  the  Law  on  the MNB  specifically  refer  to  the right  to  appeal  to the 

Court  of  Justice  of  the  European  Union  pursuant  to  Article  14.2  of  the  Statute  of  the  ESCB. 

However, Article 77 of the Law on the MNB, which amends Articles 46(12) and 47(5) of the Law 

9  
10  

See Opinion CON/2010/91. 
Law XXVII of 2008 on the oath of certain public officials specified the following wording: ‘I, ….[name of the person 
taking  the  oath],  hereby  undertake  to  be  faithful  to  Hungary  and  to  its  Fundamental  Law,  I  will  comply  and  ensure 
compliance  with  its  laws,  I  will  fulfil  my  office  as  [name  of  the  position]  for  the  benefit  of  the  Hungarian  people. 
(Depending on the belief of the person taking the oath:) So help me God!’ 

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from 1 January 2013, does not contain any reference to Article 14.2 of the Statute of the ESCB and 

to  the  right  to  seek  a  remedy  before  the  Court  of  Justice  of  the  European  Union.  The  amended 

Article 47(5) of the Law on the MNB will only provide that the Prime Minister sends the dismissal 

proposal pursuant to Article 47(4) to the MNB’s Governor, who may appeal to the Labour Court in 

accordance  with  the  Labour  Code.  Pursuant  to  Article  47(6)  and  (7),  the  decision  to  dismiss  the 

Governor  is  taken  by  the  President  and  countersigned  by  the  Prime  Minister  after  the  period  for 

appeal  at  the  Labour  Court  expires  or  after  the  Court’s  decision  is  rendered  final.  Although 

Article 77  of  the  Law  on  the  MNB  is  silent  on  the  jurisdiction  of  the  Court  of  Justice  of  the 

European  Union,  Article  14.2  of  the  Statute  of  the  ESCB  is  directly  applicable  and  continues  to 

apply. 

5.5  Legal integration of the MNB into the Eurosystem  

The  ECB  reiterates  its  observations  in  Opinion  CON/2011/104  and  CON/2011/106  on  Hungary 

being  a  Member  State  with  a  derogation  and  therefore  obliged  to  comply  with  all  adaptation 

requirements under the Treaties. Previous ECB Opinions have already pointed out that the recast of 

the MNB Law offered the Hungarian authorities the opportunity to make the necessary adjustments 

to ensure the MNB’s full integration into the Eurosystem when Hungary adopts the euro.  

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

Done at Frankfurt am Main, 5 April 2012. 

[signed] 

The Vice-President of the ECB 

Vítor CONSTÂNCIO 

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