By Marton Dunai
BUDAPEST, July 12 (Reuters) - Hungary's government should consult the National Bank of Hungary (MNB) before going ahead with its plan to cut the compensation of the central bank's top officials, the European Central Bank said on Monday.
'The Hungarian authorities have an obligation to ensure that any amendment to the legislative provisions on the remuneration of the MNB's staff is decided in cooperation with the MNB, taking due account of the MNB's views,' the European Central Bank said in a statement posted on its website.
Hungary's new center-right Fidesz government has proposed to limit public sector pay, including at the central bank, severely cutting the salary of National Bank of Hungary Governor Andras Simor and his deputies. For details, see
Simor has come under fire from top Fidesz officials over his former investments in a Cyprus-based company as well as the bank's conduct of monetary policy during the financial crisis.
Simor, dubbed by Prime Minister Viktor Orban as an 'offshore knight,' has denied any wrongdoing and refused calls for his departure.
In a statement issued after the central bank's last rate-setting meeting, Simor called attempts to use the law to reduce salaries at the central bank an infringement of the bank's independence.
The ECB also said in its statement that the planned changes should not be retroactive.
'The draft law should specifically provide that such an amendment may apply only to future appointments,' the ECB said. 'The draft law should be amended to comply with the principle of central bank independence.'
((Reporting by Marton Dunai; Editing by Gary Crosse)) Keywords: HUNGARY CBANK/ECB (marton.dunai@reuters.com; +36-1-327-4742; Reuters Messaging: marton.dunai.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BUDAPEST, July 12 (Reuters) - Hungary's government should consult the National Bank of Hungary (MNB) before going ahead with its plan to cut the compensation of the central bank's top officials, the European Central Bank said on Monday.
'The Hungarian authorities have an obligation to ensure that any amendment to the legislative provisions on the remuneration of the MNB's staff is decided in cooperation with the MNB, taking due account of the MNB's views,' the European Central Bank said in a statement posted on its website.
Hungary's new center-right Fidesz government has proposed to limit public sector pay, including at the central bank, severely cutting the salary of National Bank of Hungary Governor Andras Simor and his deputies. For details, see
Simor has come under fire from top Fidesz officials over his former investments in a Cyprus-based company as well as the bank's conduct of monetary policy during the financial crisis.
Simor, dubbed by Prime Minister Viktor Orban as an 'offshore knight,' has denied any wrongdoing and refused calls for his departure.
In a statement issued after the central bank's last rate-setting meeting, Simor called attempts to use the law to reduce salaries at the central bank an infringement of the bank's independence.
The ECB also said in its statement that the planned changes should not be retroactive.
'The draft law should specifically provide that such an amendment may apply only to future appointments,' the ECB said. 'The draft law should be amended to comply with the principle of central bank independence.'
((Reporting by Marton Dunai; Editing by Gary Crosse)) Keywords: HUNGARY CBANK/ECB (marton.dunai@reuters.com; +36-1-327-4742; Reuters Messaging: marton.dunai.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.