The six-head Executive Board (EB) is undoubtedly the power center of the Eurosys- tem. It consists of the ECB President, the Vice-President and four other members, all of which are appointed for one non-renewable term of eight years by the European Council. And while all six EB members have only one vote in the GC, they have con- siderable agenda-setting power because they prepare and manage GC meetings (McNamara 2006b: 177). This goes for two individuals in particular: the President who chairs the meetings, and the chief economist who presents an assessment of the Eurozone economy, projections of future developments, and – crucially - tables the policy options to be discussed by the committee.
Fig. 3.1: ECB Executive Board members and their terms in office (Source: ECB)
Mirroring the EB’s central role in the ECB’s decision-making process, the appoint- ment process of board members has become more politicized over time. Of course, this is particularly true for the selection of the ECB President. However, the nomina-
25
Yet it needs to be considered that the ECB bases its decisions on Eurozone averages, and economic develop- ments in, say, France or Spain logically impact these averages more than data from smaller economies such as Cyprus would. In this light, the findings of Hayo & Méon (2013) seem less surprising.
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Board member / chief economist Board member / chief economist Spain Germany France Italy
Yves Mersch (LUX) 12/2012*-11/2020
Tommaso Padoa-Schioppa (I) 06/1998-05/2005
Lorenzo Bini Smaghi (I) 06/2005-12/2011*
Benoit Coeuré (F) 01/2012-12/2019
Mario Draghi (I) 11/2011-10/2019
Christian Noyer (F) 06/1998-05/2002
Lucas Papademos (GRE) 06/2002-05/2010
Vi tor Constancio (POR) 06/2010-05/2018
Peter Praet (BEL) 06/2011-05/2019 Otmar Issing (GER)
06/1998-05/2006
Jürgen Stark (GER) 06/2006-12/2011*
Asmussen 2012-13*
Sabine Lautenschläger (GER) 01/2013-12/2020 President
Vice-President
Board member
Board member Eugenio Domi ngo-Solans (ESP)
06/1998-05/2004
Sirkka Hämäläi nen (FIN) 06/1998-05/2003
Gertrude Tumpel-Gugerell (AUT) 06/2003-05/2011 Wim Duisenberg (NL)
06/1998-10/2003
Jean-Claude Tri chet (F) 11/2003-10/2011
José Manuel González-Páramo (ESP) 06/2004-05/2012
40 tion of other board members has led to diplomatic tensions between European gov- ernments as well, usually mirroring conflicts about national representation. While a strict application of the formal ‘one person, one vote’-rule would imply that small countries are too powerful within the ECB (see Berger & De Haan 2002) there is an informal rule about national representation in the EB which seems to counter such concerns: four out of the six positions at the EB are always occupied by the four big- gest member states, namely Germany, France, Italy, and Spain (see figure 3.1 above). This informal rule can lead to ugly rows. A case in point is the conflict between the French President Nicolas Sarkozy and the Italian Prime Minister Silvio Berlusconi in 2011. After Mario Draghi had been confirmed as Trichet’s successor, a situation loomed in which two out of six seats were taken by Italian citizens – Mario Draghi and Lorenzo Bini Smaghi – whereas France would walk away empty-handed. Needless to say, this was not what Sarkozy wanted. He insisted that “there is an unwritten rule that everyone knows well, which is that among the six members of the ECB board, it’s in the ECB’s interest that all big countries are represented” – adding that “two Italians on the six-member board is not a very European solution.”26 Berlusconi had reportedly promised Sarkozy that Bini Smaghi would resign and make room for a French re- placement in exchange for Sarkozy’s support of Draghi’s presidency. Bini Smaghi, however, had different plans. He initially insisted on the ECB’s statutory independ- ence according to which ECB board members must not take orders from politicians. Yet his resistance would not last long. After a few months of diplomatic tensions be- tween Paris and Rome, Bini Smaghi gave up his post and made way for Frenchman Benoît Coeuré in November 2011 – a move which restored diplomatic ties but called the political independence of ECB policymakers into question.27
The six members of the executive board divide among themselves the responsibilities for managing the ECB’s various departments, called Directorates-General (DGs). Tra- ditionally, the most relevant units for the formation of monetary policy are DG- Economics, DG-Research, and DG-International & European Relations (Issing 2008). As a consequence of the financial crisis and the adoption of unconventional policies, DG-Macroprudential Policy and Financial Stability and, in particular, DG-Market Op- erations have also gained importance.28 While all these DGs have their role to play in the preparation of ECB decisions, DG-Economics is the monetary policy powerhouse – both in terms of its size and its prominent role in the decision-making process.29 The member of the EB who is responsible for DG-Economics, currently Peter Praet, is therefore often called the ECB’s “chief economist”. Officially, this position does not exist. The financial press awarded the title of ‘chief economist’ informally to Otmar
26
“Draghi ECB Succession Deal Pressures Bini Smaghi to Resign”, Bloomberg, 17 June 2011.
27
“Bini Smaghi quits ECB after French pressure”, Financial Times, 10 Nov 2011.
28
Interview (20) with senior ECB staff in Frankfurt, 25 Sep 2015.
29
41 Issing in the ECB’s first years because Issing’s portfolio included “much of [the ECB’s] intellectual firepower”,30 namely both DG-Economics and DG-Research (see Ch. 3.2). And even though both his successors in heading the Economics department, Jürgen Stark and Peter Praet, did not receive the same powerful portfolio combination, the term continues to be used.