19 July 2012

Commission closes infringement procedure on the independence of the Hungarian central bank

The European Commission has formally closed the infringement procedure launched against Hungary on 17 January 2012 over the independence of its central bank, Magyar Nemzeti Bank (MNB).

Today's decision was made possible thanks to the adoption by the Hungarian Parliament of legal amendments to the central bank statute on 6 July, in line with the commitments Prime Minister Orbán made to President Barroso at their meeting on 24 April.

The Commission will now scrutinise closely the implementation of Hungary's commitment to respect the independence of the MNB. The Commission is also examining the compatibility with the Treaty of the inclusion of some monetary policy instruments of the MNB in the base taxed under the new financial transaction duty.

Mission teams of the Commission and the IMF, with the ECB participating as an observer, have now arrived in Budapest to begin discussions with the Hungarian authorities on a precautionary financial assistance programme. The Commission is counting on the openness of the Hungarian authorities to engage in a genuine policy dialogue to facilitate the success of the negotiations that can now get underway.

Background

Article 30 of the Transitional Provisions of the Fundamental Law, which provided for a possible merger of the central bank and the financial supervisory authority, had already been repealed separately through an amendment to the Constitution. The revised law adopted on 6 July integrates the most important remaining elements requested by the European Commission in its infringement procedure and by the three institutions (the Commission, the International Monetary Fund and the ECB) in the working group set up to maintain a dialogue with the Hungarian authorities on these issues.

The principal amendments regard the distribution of executive power between the Monetary Council and the Executive Board. The MNB's obligation to submit agendas for Monetary Council meetings to the Government, the right of the Government’s representative to be present at Monetary Council meetings and the abolition of the Monetary Council when Hungary adopts the euro have been removed. The Commission had considered that these provisions were incompatible with the independence requirements of the EU Treaties (Article 130 TFEU and Article 14 of the Statute of the European System of Central Banks and of the European Central Bank).

Press release

© European Commission