The government may not adjust the terms upon which the executives were appointed, and must consult the central bank ahead of any such decision, the ECB said in a statement signed by its governor Jean-Claude Trichet. The statement, issued late on Monday, was published in Hungarian and English on the ECB website,

The draft bill in question would reduce the salary of MNB governor András Simor by 75% to Ft 2 million a month. As the salaries of deputy governors and monetary council members are based on the governor’s salary, the law would also affect their remuneration, the statement noted.

Stressing that the salaries of central bank executives cannot be changed until their term ends, the ECB said “the draft law should specifically provide that such an amendment may apply only to future appointments”.

The ECB further emphasised that laws affecting the central bank should be drawn up in consultation with the MNB and with the ECB.

In addition, the ECB objected that the government had not allowed enough time for it to comment on the planned changes. The ECB received the plans on July 1 and was informed that a new law would be passed by July 19. The statement pointed out that the ECB should be consulted “at a point in the legislative process which affords the ECB sufficient time to examine the draft legislative provisions,” and that EU regulations require member states to suspend the process of adopting such legislation pending receipt of the ECB’s opinion.

The statement said, moreover, that the justification provided by the Economy Ministry cannot be considered as a matter of extreme urgency, before adding “the ECB would appreciate the Ministry for the National Economy giving due consideration to its obligation to consult the ECB in the future”.

The MNB welcomed the announcement.

Prime ministerial spokesman Péter Szijjártó said the cabinet will discuss the ECB statement at its Wednesday meeting."

Source: Hungary Around the Clock.

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