CJEU case law: independence of national central bank governors is subject to special protection
The case law of the Court of Justice of the European Union (CJEU) demonstrates that the independence of national central bank governors is subject to special protection. The press office of the CJEU, in the information sent to PAP, draws attention to the opinion and the 2019 judgment concerning the head of the Latvian central bank.
On October 21 in the Sejm, the lower house of Polish parliament, Donald Tusk, the leader of the Civic Coalition (KO) said that the opposition has a majority to put Adam Glapinski, the National Bank of Poland's (NBP) governor, before the State Tribunal. "At the moment we have a majority sufficient to put the NBP president before the State Tribunal. We are analysing this issue, because we want to use this very serious tool of bringing politicians and functionaries of the highest level to political and sometimes also criminal responsibility," Tusk said.
In response, Mateusz Morawiecki, the Polish prime minister, said he would speak to representatives of the International Monetary Fund, the World Bank and the European Central Bank (ECB), to draw their attention to the fact that the announcements made by Donald Tusk and the Civic Coalition, are "the biggest attack on central bank independence."
PAP asked the Court of Justice of the European Union in Luxembourg whether the CJEU had ever ruled on cases involving EU central bank governors before and whether there were EU rules on central bank governors.
In response, the Court's press office stipulated that the CJEU had not had many occasions to rule on the interpretation of EU law as it applies to the governors of Member States' central banks. However, it drew attention to a judgment of February 26, 2019 concerning the suspension of the head of the Latvian central bank. It referred to Article 14.2 of the Statute of the European System of Central Banks (ESCB) and the ECB, which states that the governor of a national central bank may only be dismissed from office if he or she no longer fulfils the conditions necessary for the performance of his or her functions or has committed serious misconduct.
In a case from almost five years ago, the Court annulled a decision suspending the Governor of the Central Bank of Latvia. Latvia, it argued, had failed to provide evidence of the serious misconduct allegedly committed by Ilmars Rimsevics.
As part of the investigation against him for corruption and paid patronage, the Latvian anti-corruption agency has applied a number of measures to Rimsevics, including a ban on him performing his duties as central bank governor, an obligation to provide an asset surety and a ban on him leaving the country without prior authorisation.
Complaints against these decisions were brought before the CJEU by both the person concerned and the European Central Bank. In the preface to the judgment, the CJEU stated that these were the first actions brought before the CJEU on the subject of the jurisdiction conferred on it by Article 14.2 of the Statute of the ESCB and the ECB "to hear actions against decisions to dismiss from office the governors of the central banks of the Member States."
"The conferral of this competence on the Court is intended to ensure the independence of the Governors of the national central banks, which are undoubtedly national authorities but operate within the ESCB. The governors of the national central banks of a Member State whose currency is the euro, as is the case in Latvia, also sit on the ECB's Governing Council," the CJEU said.
The CJEU press office also drew attention to the opinion of Juliane Kokott, a CJEU Advocate General preceding the judgment.
The German lawyer pointed out that "it is inevitably linked to the positions of members of the EU institutions and to the highest public positions in the Member States that the holders of these positions are not subject to any hierarchical control nor can they be dismissed for reasons relating to the exercise of their functions."
"Consequently, repressive powers to punish a possible abuse of power by a person occupying such a position are generally vested either in the institution to which he or she belongs or in another institution of equivalent status in constitutional terms," states the opinion.
In her follow-up, Kokott stressed that "even without attempting to define exhaustively the prerequisites for being a central bank governor, it must be said that independence is in any case their inviolable core."
"... the independence of the ESCB national central banks, as well as of the members of the ECB's Governing Council, as the primary decision-making body of that bank and of the Eurosystem, is enshrined in the Treaty on European Union (TEU) as an indispensable factor for price stability, which is the primary objective of the economic and monetary policies of the Union and of the ESCB. For this reason, Article 130 of Treaty on the Functioning of the European Union (TFEU) and Article 7 of the Statute of the ESCB and the ECB expressly provide that the members of any of the decision-making bodies of the ECB and national central banks, when exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB and the ECB, shall neither seek nor take instructions from any body," she explained. (PAP)
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