Parliamentary committee clears amendments to Central Bank Act for general debate

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The audit and budget committee of the Hungarian parliament cleared amendments to Hungary's Central Bank Act and a related constitutional amendment for general debate at a meeting on Monday. General debate on the amendments is due on Tuesday.

The amendments, proposed by the government in response to criticism by the European Union of the new Central Bank Act passed late last year, must take legal effect for the European Commission to start negotiations on precautionary financial assistance with Hungary, Tamás Fellegi, Hungary's chief negotiator at talks with the EU and the IMF, said last week.
The Commission decided two weeks earlier to close an infringement case regarding the independence of the National Bank of Hungary (MNB) once the relevant legislation is adopted, and said Hungary had taken sufficient action and commitments to start talks on precautionary financial assistance.
The infringement procedure was one of three such procedures launched early this year. The amendments cleared by the committee would annul provisions of the Central Bank Act under which the NBH is required to send the agenda of the Monetary Council to the government and the meetings of the rate-setters are attended by a representative of the government.
They would also annul regulations on the dismissal of Monetary Council members for dereliction of duty, a clause on the elimination of the Council in the event of the country's adoption of the euro and another clause establishing the possibility of a merger between the central bank and the financial supervisory authority.

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