Published 21 December 2011

you have been warnedEuropean Commission President José Manuel Barroso asked Hungarian Prime Minister Viktor Orbán yesterday (20 December) to withdraw legislation that could threaten the central bank’s independence.

 

“The president [Barroso] has sent a letter to Prime Minister Orbán, expressing his strong concerns on this issue,” Commission spokesperson Pia Ahrenkilde Hansen told the Brussels press.

 

According to the Wall Street Journal, Barroso was referring to the Hungarian government’s plans to reshape the structure of the central bank by designating a third deputy governor and also raising the number of members in the Monetary Policy Council.

 

The newspaper quoted National Bank of Hungary Governor András Simor as saying that these elements of the legislation could serve no other purpose than to increase government influence on monetary policy.

 

The Commission has serious doubts about the compatibility of the Magyar Nemzety Bank (Hungarian National Bank) bills with Article 130 of the Lisbon Treaty on the independence of the European Central Bank, Hansen said. She added that Barroso also expressed his regrets that the last drafts of these laws were not subject to prior consultation with the ECB, which had repeatedly expressed its concerns.

 

Article 130 says that neither the ECB nor a national central bank, nor any member of their decision-making bodies, shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a member state or from any other body.

 

Barroso wrote to Orbán that if national laws are incompatible with EU legislation, they would need to be changed, Hansen said. She added that Barroso advised the Hungarian prime minister to withdraw the two bills in question from Parliament and to work with the EU institutions so that they are compatible with EU law.

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