site.btaEuropean Central Bank Not Consulted about Bulgarian National Bank Act Amendments

Asked by BTA whether the Bulgarian authorities should coordinate the amendments to the Bulgarian National Bank (BNB) Act with the European Central Bank, the ECB replied that it had not been consulted about the changes.

Under the amendments adopted by the National Assembly this week, the appointed caretaker prime minister will be able to suspend his credentials during his time in office, and after that to extend the mandate for which he is elected.

BTA sent the same inquiry to the BNB, from where they replied that "any legal changes concerning the status of the national central bank should be consulted with the European Central Bank (ECB)."

"The arrangements for the consultation of the ECB by national authorities are contained in Council Decision 98/415/EC of June 29 1998 on the consultation of the European Central Bank by national authorities with regard to draft legislative provisions," the BNB said. "This Decision lists several categories of matters that are explicitly considered to fall within the ECB's competences, including those concerning the national central bank."

Asked whether the changes could have a negative impact on an upcoming convergence report on Bulgaria’s readiness to join the euro area in terms of legal compliance assessment, the BNB said: "Legal compliance, or the so-called legal convergence, shall be established by the ECB through a review of the compatibility between the national legislation of each Member State with a derogation, including the statutes of its national central bank and Articles 130 and 131 of the Treaty on The Functioning of the European Union and the relevant Articles of the Statute. That review shall be contained in the convergence reports drawn up at least every two years or at the request of a Member State with a derogation. The latter was prepared in 2022 and is available on the ECB's website. At present, work continues on the preparation of the regular convergence report for 2024, which will reflect all changes in the legislative framework governing the BNB's activities since the last convergence report in 2022.

After his meeting with President Rumen Radev in connection with the procedure for nominating a caretaker prime minister, held last week, BNB Governor Dimitar Radev said in connection with his potential appointment that "there is a collision with the national legislation, which is obvious, but what little is said is that there is a collision with the European legislation."

Dimitar Radev told reporters: "There is a collision with national law, which is obvious, but what is little talked about is the collision with European law. The central bank governor and his role are explicitly defined in the Treaty on the Functioning of the EU, its protocols, the statute of the European Central Bank, the statute of the European System of Central Banks (ESCB). They are very clear that these positions cannot be combined. I am a member of the General Council of the European Central Bank. The code of ethics there explicitly states that the governor should avoid any participation in the political process and also should not attempt to take public positions outside that of a governor." 

The Code of Conduct for the Members of the Governing Council says that, in accordance with Article 108 of the Treaty establishing the European Community and Article 7 of the Statute of the ESCB, "members of the Governing Council, when exercising the powers and carrying out the tasks and duties conferred upon them, shall not seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body, including any decision-making body that they belong to. The members of the Governing Council shall act in the general interest of the euro area. For decisions to be taken in accordance with Article 10.3 of the Statute of the ESCB, Governors may also take into account the interest of their respective national central bank as shareholder."