Business Irish

Wednesday 17 September 2014

Noonan's officials: we will have say at ECB

Published 12/08/2014 | 02:30

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Minister for Finance Michael Noonan
Minister for Finance Michael Noonan

FINANCE Minister Michael Noonan's officials are insisting Ireland will still have a voice at European Central Bank meetings, even after losing automatic voting rights.

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And the Department of Finance points out that larger countries, including Germany and France, will also lose their permanent votes. From January 1 next year, all members of the eurozone will get rotating votes at ECB Governing Council meetings.

Fine Gael MEP Brian Hayes has called for a guarantee from the ECB that if a country is not voting, the concerns of that country have to be reflected in the final decision of the ECB.

The changes are coming about because Lithuania is due to become the 19th member of the euro area in 2015. The latest arrival triggers a change in the ECB Governing Council's voting rules, which were agreed in 2003 and amended in 2008.

The Department said every country will still have a voice at the table, regardless of who votes. "Voting rights will rotate monthly which means that some governors will not be able to vote in any given month - though all can participate in the discussions. The rotation system will change again when the number of euro-area members reaches 22," the department said.

Rotation

The ECB's Governing Council currently consists of the six members of the Executive Board, plus the governors of the national central banks of the 18 euro area countries. However, once the euro area reaches 19 members, a rotation principle will apply for national central bank governors.

Governors will be allocated to groups based on the size of their economy and financial sector. The first group will comprise of the 5 largest countries - Germany, France, Italy, Spain and the Netherlands - and they will share four votes.

The remaining 14 central bank governors - including Ireland- will be grouped together and they will share 11 votes.

Each country will effectively have a vote on four out of every five occasions.

Mr Hayes said by increasing the number of countries from 18 to 19, the euro is demonstrating to the world that it is a strong reserve currency and that it is here to stay.

But Sinn Fein MEP Lynn Boylan accused the government of "sleepwalking" into the loss of voting rights on the ECB. She says the ending of one state-one vote for smaller member states is an "affront to democracy".

Irish Independent

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