The cabinet is resolute in its intention to impose a maximum monthly salary of Ft 2 million on everyone who is paid from public funds, spokeswoman Anna Nagy told reporters after the cabinet met.

The announcement came after a warning from the ECB in response to a government draft bill that aims to slash the monthly salary of MNB governor András Simor by 75%, from about Ft 8 million to Ft 2 million. Any change in employment conditions should apply only to future appointments, the ECB said.

The ECB further stated that such steps should be preceded and carried out in consultation with the MNB, and that the independence of the central bank should be observed.

Prime ministerial spokesman Péter Szijjártó said later that the cabinet had concluded that its decision to impose a ceiling on public-sector wages was the right one.

The decision to reduce the MNB governor’s salary does not affect the central bank’s independence he said, because the wage cut applies to the entire public sector. This includes other independent institutions, such as the Supreme Court, the Constitutional Court, the State Audit Office and the financial supervisory, Szijjártó pointed out.

In addition, he said the MNB and ECB had been consulted on the decision, in accordance with regulations.

Earlier, cabinet spokeswoman Nagy said experts asked by the government to study the ECB statement had disputed it on several points, but she gave no specifics."

Source: Hungary Around the Clock.

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