Monthly Bulletin July 2009 - Banque de France

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ARTICLES Chart A Three-group rotation system for the Governing Council of the ECB with 27 countries in the euro area Rotation of voting rights in the Governing Council of the ECB MEMBERS OF THE EXECUTIVE BOARD Six permanent votes THIRD GROUP Eight governors Three rotating votes 21 votes in total Eight rotating votes Four rotating votes FIRST GROUP Five governors SECOND GROUP Fourteen governors The composition of the groups will be adjusted whenever changes in the ranking 7 lead to the revision of the groups, or whenever the number of governors increases as a consequence of the enlargement of the euro area. By way of illustration, Chart A above shows the three-group rotation system with 27 countries in the euro area. 2 THE IMPLEMENTING DECISION On 19 March 2009 the Governing Council adopted Decision ECB/2009/5 amending Decision ECB/2004/2 of 19 February 2004 adopting the Rules of Procedure of the European Central Bank (i.e. the implementing decision), which lays down the rules establishing the rotation scheme for voting rights in the Governing Council. In line with the requirements of Article 10.2 of the Statute of the ESCB, the Governing Council decided on the implementation measures with a two-thirds majority. Changes to those implementation measures, as well as any further measures which become necessary over time, will also have to be approved by a two-thirds majority of all Governing Council members (i.e. members with and without voting rights). As outlined in the recitals of the implementing decision, the implementation measures are based on three further principles: (i) equal treatment, meaning that the implications of euro area enlargement as regards the exercise of voting rights should, ex ante, be the same 7 This occurs whenever the data underlying the ranking are revised – i.e. on the occasion of the quinquennial review of the capital key and whenever the capital key has to be adapted to accommodate the accession of new countries to the EU (see also Section 2.5). ECB Monthly Bulletin July 2009 93
for each governor; (ii) transparency; and (iii) simplicity. The main elements of the implementing decision are explained below. 2.1 ROTATION ORDER The governors will be listed in their respective groups in accordance with the EU conventions for the listing of countries. 8 Rotation will start from a randomly chosen point in the list to avoid favouring or disadvantaging a governor as a consequence of the alphabetical positioning of his/ her country. When the end of the list is reached, the rotation will continue from the top of the list. The composition of groups can alter either: (i) because countries enter the euro area; or (ii) because the data underlying the indicator change, causing the governors to be ranked differently (see Section 2.5 for further information). Moreover, when the number of governors exceeds 21, this triggers the establishment of a third group. In all of these cases, the governor joining a group or changing group will be placed in the new group in accordance with the rule detailed above. The rotation will then continue, without interruption, down the list of governors in the group. 2.2 ROTATION PERIOD The rotation period is defined as the period during which the composition of the governors with voting rights in the various groups remains unchanged. The rotation period is set at one month, with rotation occurring at the beginning of the month. As a rule, two physical Governing Council meetings take place every month. The first is dedicated exclusively to monetary policy decisions, and the second generally deals with all other issues to be decided by the Governing Council. 9 The onemonth rotation period allows governors to exercise their voting rights in both types of meeting. 2.3 ROTATION RATE The rotation rate is defined as the number of governors gaining and relinquishing voting rights at the same time in each group at the start of each new rotation period (i.e. each month). The rotation rate for the first group is fixed, since the size of the group is not affected by the changing number of governors. It always consists of five governors with four votes, meaning that one governor does not have voting rights in any given month. The second and third groups require a discretionary rule to decide how many governors gain and relinquish the right to vote at the start of each month. In this respect, the Governing Council has decided that the number of governors gaining voting rights at the start of each month will be equal to the difference between the number of governors allocated to the group and the number of voting rights assigned to it, minus two. This means that not all of the governors without a vote in a given month will regain their voting rights in the subsequent rotation period. A quicker rotation scheme with a larger number of governors gaining and relinquishing the right to vote at the same time could have been applied, but this would have led to greater discontinuity in terms of voting members. The “minus two” option was seen as contributing to greater stability in the composition of the voting members. For illustrative purposes, Chart B shows voting and non-voting periods for the first and second groups for a Governing Council with 19 governors (i.e. immediately after the start of the rotation scheme). Similarly, Chart C shows voting and non-voting periods for the first, second and third groups for a Governing Council with 27 governors (i.e. indicating the situation were all current EU Member States to join the euro area, including those with an opt-out). The horizontal axis depicts time, while governors are ranked on the vertical axis. The first group always consists of five governors 8 Countries will be listed in alphabetical order, using the names of those countries in the national language using the Latin alphabet. 9 As a rule, only one physical Governing Council meeting is scheduled in January and August, that meeting being dedicated to monetary policy decisions. In these months, other decisions are taken by written procedure. 94 ECB Monthly Bulletin July 2009
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EN 0712009 EUROPEAN CENTRAL BANK MO
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© European Central Bank 2009 Addre
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ABBREVIATIONS COUNTRIES LU Luxembou
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Risks to the outlook for inflation
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ECONOMIC AND MONETARY DEVELOPMENTS
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LIST OF CHARTS C1 Monetary aggregat
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k) l) a t = ⎛ ⎜ −1⎟×100
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GENERAL NOTES The “Euro area stat
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EURO AREA STATISTICS General notes
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DOCUMENTS PUBLISHED BY THE EUROPEAN
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GLOSSARY This glossary contains sel
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Monthly Bulletin July 2009 - Banque de France

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