June 26th, 2012

Parliament to wait on European Central Bank before voting on bill seen crucial for new bailout

Hungary’s parliament will vote on the amendments proposed to its central bank law once the European Central Bank (ECB) had sent its own observations about the law, Antal Rogan, head of the Fidesz parliamentary group, said on Monday.

Lawmakers will not fast-track the amendments but see to them under normal house rules, Rogan said. A general debate on the laws will commence on Monday and a more detailed one on Tuesday, he said.

A vote had been scheduled for July 2, parliament’s press office said earlier. A Fidesz official said, however, that a response from the ECB was expected on July 6.

Andras Simor, the central bank governor, told parliament’s economic committee on Monday that the bank maintained its standpoint that it was unnecessary to expand the rate-setting Monetary Council or to appoint a third deputy governor, but he could accept a moratorium on appointments of new rate-setters in the next nine months.

He added, however, it would be preferable if the National Bank of Hungary governor had the right to express opinions with regard to Monetary Council members, including the central bank’s deputy governors, in the long run.

The Monetary Council will continue to be responsible for policy over Hungary’s international reserves, Mihaly Varga, minister without portfolio in charge of talks with the IMF, said, according to parliament’s website. Both their level and the use to which they are put will remain in the council’s exclusive domain, he said, adding that the government wanted to keep international reserves as high as possible to support economic stability.

The audit and budget committee and the economic committee on Monday supported the motion to send the amendments onto parliamentary debate.

Last week Gyorgy Matolcsy, the economy minister, submitted the amendments to lawmakers, drafted with the aim of meeting the expectations of the ECB, the NBH and the International Monetary Fund.

The amendments clarify that the council’s right to make strategic rather than operational decisions, removing its executive powers and its right to decide the powers of the deputy governors and the communication of its decisions.

The amendments also change rules on removing the bank’s governor and Monetary Council members from office, and specify that the council should have no fewer members than five and not more than nine.

Currently there are three internal members and four external members.

Under the amendments, the Monetary Council will no longer have to send its agenda to the government or invite a government representative to its sessions.

But the new amendments do not touch on the introduction of the position of third deputy governor.

  • Democrat

    They will wait for the comments and then vote it through!! Why wait? Do they fear that the IMF will want 100% instead of the 99%? I smell yet another change to the law coming up. Why can they not get it right first time?

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