The Riigikogu is working on an idea to amend the Bank of Estonia Act. One proposed change is for every parliament party to be able to nominate a representative for the central bank’s supervisory board, with chairman of the supervisory board nominating the remaining 3-5 members. As things stand, the entire supervisory board is nominated by its chairman and must be approved by the Riigikogu.
The amendment would give the parliament much more say in assembling the supervisory board. The latter nominates the central bank president and vice presidents.
Gaps in the law
The Riigikogu did not approve supervisory board chairman Mart Laar’s list of candidates for the central bank’s supervisory board in September. Laar was criticized for failing to consult with parliament parties when nominating candidates, even though the law does not require him to. Laar said he wanted a politically independent team.
Laar also took flak over the fact he presented his list this summer, even though the powers of the previous supervisory board expired in February. Introducing a deadline for when the new supervisory board needs to be nominated is another amendment considered. Because the law does not specify when Laar must present a new list of candidates to the Riigikogu, many believe the situation has become gridlocked.
Discussions of amending the Bank of Estonia Act were added to the Monday agenda of the Riigikogu Finance Committee. Member of the committee Aivar Sõerd (Reform) said discussions only concerned nomination of supervisory board members.
“No other topics regarding the activities of the central bank were discussed, just the supervisory board,” the politician said, adding that the committee chair told members draft legislation is in the works.
One idea proposed would see every Riigikogu group propose one member, with the supervisory board chairman nominating up to five specialists. While the former proposal depends on election results, the latter would be fixed in the Bank of Estonia Act. “All parliament parties should be represented,” said Aivar Kokk (Isamaa), chairman of the Riigikogu Finance Committee. Candidates proposed by Riigikogu groups would not have to be MPs or members of parties. “Parties would be free in nominating specialists they trust,” Kokk explained.
Stalemate needs to be solved
Kokk emphasized that the plan is in its early stages still and said he will write to Riigikogu factions to ask for other proposals. He said that he will not insist on the amendment should parties be disinterested. Several Riigikogu groups have told Postimees they want to go over the Bank of Estonia Act. Provided parties can reach a compromise in good time, the amendment could be passed before the year is out. “We need to solve this stalemate,” Kokk said.
The current Bank of Estonia Act states that the supervisory board has eight members who cannot be members of the government or Bank of Estonia employees. The supervisory board is appointed for a term of five years.
The supervisory board exercises supervision over the central bank’s activities. The pay of supervisory board members is regulated by the Salaries of Higher State Servants Act that also determines the salaries of the president and MPs. The monthly salary of a member of the Bank of Estonia supervisory board is €1,542 this year. The chairman of the board is paid €2,159 a month.