Gros, Daniel. (2003) Reforming the Composition of the ECB Governing Council in View of Enlargement: An Opportunity Missed!. CEPS Policy Brief No. 32, April 2003. [Policy Paper]
Abstract
[Introduction]. It is widely accepted that enlargement requires reform of the highest decision-making bodies of the European Central Bank (ECB). In particular, there are concerns that the Governing Council, which is composed of the six-member Executive Board of the ECB plus the governors of the participating national central banks (NCBs), will grow too large to work efficiently. In the absence of reform, it could end up having over 30 members – resembling more a mini-parliament than a decision-making body that has to manage a global currency in fast-moving financial markets. Moreover, the accession of a number of small countries is often perceived as a threat to the “power balance” in the Governing Council. The official proposal acknowledges the first problem of “numbers and efficiency”, but it completely fails to offer a reasonable solution. It is apparent that the proposal was designed to address the second concern, i.e. the disproportionate representation of small countries. The proposed rotation in groups, however, is worse than the status quo. It is inefficient, opaque, internally inconsistent and arbitrary. Fortunately, it is not too late to stop it. The European Parliament has already expressed its opposition and the official proposal still has to be ratified by all member states before it enters into force. As the Convention on the Future of Europe is about to draft a new Treaty, a Constitution for the EU, there is still hope that alternatives can be considered.
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