Conservatives want more power for Germany in ECB

9th November 2011, Comments 0 comments

Germany's ruling conservative party said Wednesday it wants to redraw the balance of power within the European Central Bank to give Europe's biggest economy a greater say.

The Christian Democratic Union or CDU party of German Chancellor Angela Merkel is to propose a radical overhaul of the current system so that instead of each of the 17 eurozone member states having an equal say on the ECB's policy-setting governing council, votes are weighted according to a country's economic size and importance, officials said.

They were confirming information contained in a report in the Financial Times Deutschland.

Furthermore, decisions made by the bank's six-member executive board are to be taken on a majority basis, rather than by consensus as is currently the case.

The CDU leadership is to the a recommendation to the party congress in Leipzig next week.

Under the ECB's current statutes, each eurozone country has one vote on the governing council, the body responsible for setting interest rates for the single currency area.

That means that Germany, the region's economic powerhouse and Europe's de-facto paymaster, has no more say than a tiny country such as Malta.

The governing council also decides on other policy matters, notably the bank's responses to the eurozone debt crisis, including the provision of liquidity to banks and the controversial decision to buy the sovereign bonds of debt-wracked countries.

Germany was a vocal opponent of the latter decision and Bundesbank President Axel Weber and the ECB's German chief economist Juergen Stark both resigned in protest at the move.

© 2011 AFP

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