Agreement on Bundesbank allowance

After lengthy discussions, the Federal Ministry of Finance and the Deutsche Bundesbank have agreed on a mutually acceptable ruling on the amendment sought by the ministry to the Bundesbank allowance (section 31 of the Bundesbank Act). It has been agreed that, as a result of this ruling and an additional reduction in staff up to 2011, the Bundesbank will make a further contribution to cost savings of EUR 73 million.

The Bundesbank allowance, a supplement to the basic salary which currently amounts to 19%, will be amended as follows. In future, an allowance of 9% will be paid to staff at Central Office and 5% to staff in the regional offices; the allowance will cease to be paid at all to staff at Bundesbank branches. This is to be achieved by offsetting half of the future increases in salary against the Bundesbank allowance. This means that Bundesbank staff will not sustain any loss of income. This ruling will be applied in full to new staff as soon as it becomes law. In future, the Bundesbank allowance will not be affected by general increases in pay. In addition, the Bundesbank retains the right to continue granting performance-related bonuses, of which it will be able to make greater and more flexible use than hitherto.

The draft submitted to the Federal Cabinet by the Federal Minister of Finance no longer proposes to amend the existing accounting rules relating to the reserve assets (section 27 of the Bundesbank Act) and as such accords with the Bundesbank’s previously stated position.