[A-List] EU integration struggles & UK eurozone membership
michael.keaney at mbs.fi
Wed Dec 11 07:19:14 MST 2002
ECB agrees three-speed voting model
By Tony Major and Andreas Krosta in Frankfurt
Financial Times: December 11 2002
The European Central Bank has agreed on a "three speed" model for voting
rights in its rate-setting governing council once the eurozone includes new
members from eastern and central Europe.
The central bank's proposed reform, finalised last week, will cap the number
of voting members at 21 but include a complex rotational voting system to
ensure states are not left unrepresented for long periods.
But the model, which officials describe as the "least worst" option, also
ensures that the five biggest countries in terms of gross domestic product
and population will have a decisive say in the decision-making process.
Other states will gain a vote on the ECB's governing council but at a
frequency determined by their relative size. "Basically, larger countries
will hold their voting rights for longer periods than smaller ones,"
according to bank officials.
Economists said the proposal, which has to be agreed by ministers, should
allay market fears that the monetary policy framework of the eurozone will
become unmanageable once the accession countries join the single currency
"It ensures democratic accountability . . . while ensuring that the voting
on the ECB's governing council does not become too unwieldy," said David
Walton, chief European economist at Goldman Sachs.
Wim Duisenberg, ECB president, said last week that the model would preserve
the current system of one man, one vote; and be transparent and robust.
He indicated that in an enlarged union of 27 countries, members would be
divided into three groups, depending on gross domestic product and
It is understood the first group, the five biggest countries - Germany,
France, the UK (if it joins monetary union), Italy and Spain - would get
four votes on the council, meaning, in effect, each country would lose its
vote once every five years.
The second group of roughly 14 medium-sized countries, such as Belgium,
Austria, Sweden, Finland and Poland, would be given a total of eight votes.
The eight smallest countries, including Cyprus, Estonia and Latvia, would
get three votes.
Bank officials said the proposal, the result of months of negotiation, was
an "acceptable compromise" for member states. It would mean the frequency of
rotation for smaller states was faster than for larger ones.
Only the bank's executive board of six members will have permanent voting
The ECB is expected to give full details of the new voting system, which
will start once more than three new countries join the eurozone, in the next
two to three weeks. Officials believe the model could be used for other EU
At the moment 10 countries, eight central European countries and two
Mediterranean island states, are negotiating to join the EU in 2004.
Their speed of entry will depend on how quickly the accession countries'
economies converge with those of existing EU states. The process is expected
to take several years.
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