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/2014/38)
Date: 2014-05-26
Institutions: European Central Bank
Subjects: Italy, central bank, civil servant, national law, remuneration of work

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/2014/38) 

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 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/EC2, 

as the Law relates to the Banca d’Italia. 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 Decree-Law 

1.1   Under  Italian  law,  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 individuals receiving salaries and other types of compensation from public authorities. 

Article 13(1) of the Decree-Law caps such remuneration 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 EUR 156 000, was raised to EUR 7.5 billion 
and the shares held by shareholders were revalued accordingly5. The Decree-Law provides 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 

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4 
5 

Gazzetta Ufficiale della Repubblica Italiana No 95, 24.4.2014. 
Council  Decision  98/415/EC  of  29  June  1998  on  the  Consultation  of  the  European  Union  by  national  authorities 
regarding draft legislative provisions (OJ 189, 3.7.1998, p. 2). 
Gazzetta Ufficiale della Repubblica Italiana No 281, 30.11.2013. 
Gazzetta ufficiale della Repubblica Italiana No 23, 29.1.2014. 
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. 

 
 
 
 
                                                 
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well as any surcharges. The 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  that 

enables  the  ECB  to  adopt  its  opinion  in  all  required  language  versions  and  that  enables  the 

authority  initiating  the  legislative  provision  to  take  the  ECB’s  opinion  into  account  before  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 into law on the date 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 decree-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, the consultation request was made well after the entry into force of the 

Decree-Law. In its request, the Ministry of Economy and Finance maintains 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  individuals  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  regulate  the  remuneration  of  civil  servants  and  public  managers  as  well  as  the 

remuneration of anyone 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 law. 

6 

7 

See Title IV, Section I of the Guide to consultation of the European Central Bank by national authorities regarding draft 
legislative provisions. 
See Opinions CON/2012/64, CON/2012/61 and CON/2012/20. 

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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 States 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  ceiling  of  EUR  240  000  on  remuneration  is  expressly  described  as  a 
principle9 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  whether  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 Banca d’Italia’s internal regulations, determining 

staffing  levels,  recruitment  and  dismissal  of  employees,  and  approval  of  agreements  negotiated 
with trade unions11. 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)  ter  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 

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12 

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. 
Article 13(5) of the Decree-Law. 
See  reference  to  the  Technical  Report  attached  to  the  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 atwww.senato.it. 
See Articles 7 and 19 of the Statute of the Banca d’Italia. 
See Opinions CON/2010/58 and CON/2013/92. 

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be paid into the ‘Fund for amortisation of government securities’, which are then transferred to the 

Italian State. It 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  applies  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  is  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, the 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  use  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  amortisation  of 

government  securities  if  applied  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 Banca d’Italia’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 is 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 and publicly-

owned companies. 

13  

14  

15 
16 

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’). 
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  finance  discipline  and  of  prohibiting  NCBs  from  financing  the  public 
sector. 
See Opinions CON/2010/51, CON/2010/69 and CON/2010/80. 
See Opinion CON/2010/80. 

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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 
18  

See Opinion CON/2014/12. 
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. 

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