EXTRANJEROS AL SERVICIO DE LA ADMINISTRACIÓN DEL TEMPLO

A second famous Eurosystem principle – namely that of ‘centralized decision-making, decentralized implementation’ – deserves some scrutiny as well. While the principle generally describes the division of labor between the central hub (the ECB) and the decentralized spokes (the NCBs) well, it should not lead us to assume that participa- tion in the GC is the only access point for NCBs in the decision-making process. Ra- ther, decisions are prepared in close cooperation between ECB and NCB staff within technical committees and subcommittees (Jung et. al. 2010). The Eurosystem’s com- mittee structure has evolved over time and by now mirrors the ECB’s organizational structure almost perfectly: most of the ECB’s DGs have a committee to chair (DG- International: International Relation Committee (IRC); DG-Market Operations: Mar- ket Operations Committee (MOC); DG-Statistics: Statistics Committee etc.). These subcommittees play an advisory role and should assist the Executive Board and the Governing Council in its decisions by providing expert opinions and technical advice. By far the most important and politicized among the committees is the Monetary Poli- cy Committee (MPC).43 While other committees are better thought of as fora of ex- change in which ECB and NCB staff work together cooperatively, this is less true for the MPC. Mirroring the tough choices the ECB had to make throughout the crisis, the 40 ibid. 41 Interviews (07), (13) 42 Interviews (02), (08) 43

The ECB’s MPC is a technical subcommittee and thus should not be confused with the Monetary Policy Committees of other central banks, which are the equivalents of the ECB’s Governing Council.

44 work in the MPC has become increasingly conflictual and even nurtured personal ani- mosities.44 The influence of individual NCBs in the committee structure is a function of several aspects, among which one stands out: manpower. For instance, the Bundes- bank’s sheer size45 allows its employees to specialize on selected aspects of monetary policy. Therefore they often become highly knowledgeable experts in those areas. As smaller NCBs often do not have the organizational capacity to develop such special- ized expertise, the Bundesbank representatives often appear particularly well prepared in committee meetings, giving their arguments additional weight.46

National central bank Capital key % Paid-up capital (€)

Deutsche Bundesbank, Germany 18.0 1,948,208,997.34

Banque de France 14.2 1,534,899,402.41

Banca d'Italia, Italy 12.3 1,332,644,970.33

Banco de España, Spain 8.8 957,028,050.02

De Nederlandsche Bank, Netherlands 4.0 433,379,158.03 Banque Nationale de Belgique, Belgium 2.5 268,222,025.17

Bank of Greece 2.0 220,094,043.74

Oesterreichische Nationalbank, Austria 2.0 212,505,713.78

Banco de Portugal 1.7 188,723,173.25

Suomen Pankki, Finland 1.3 136,005,388.82

Central Bank of Ireland 1.2 125,645,857.06

Národná banka Slovenska, Slovakia 0.8 83,623,179.61

Lietuvos bankas, Lithuania 0.4 44,728,929.21

Banka Slovenije, Slovenia 0.3 37,400,399.43

Latvijas Banka, Latvia 0.3 30,537,344.94

Banque centrale du Luxembourg 0.2 21,974,764.35

Eesti Pank, Estonia 0.2 20,870,613.63

Central Bank of Cyprus 0.2 16,378,235.70

Central Bank of Malta 0.1 7,014,604.58

Table 3.1: National contributions to the ECB’s capital key (Source: ECB)

Beyond this, interviewed ECB staff suggested that German voices generally find more attentive ears than others, even at the working level. This may also be due to the con- stituency they represent – implicitly speaking for the Euro area’s biggest economy with the largest share of the population and the biggest contribution to the ECB’s capi- tal (see Table 3.1 above).47 Of course, adopting a Euro area-wide perspective actually requires ECB staff and policymakers to pay more attention to the economic situation of the currency area’s bigger countries. It is perhaps stating the obvious, but the simple

44

Interview (14) with Bundesbank manager in Frankfurt, 21 Sep 2015.

45

At the end of 2012, the Bundesbank had 10,825 employees, while the ECB employed a meagre 1,638. The other main NBCs of the Eurosystem reported a staff size of 13,012 (France), 6,982 (Italy), 2,684 (Spain), 1,930 (Greece), and 1,672 (The Netherlands), see The Franklin Templeton Investments Central Bank Directory 2014 (Horakova & Jordan 2014).

46

Interview (08); Interview (14)

47

45 fact that inflation and growth dynamics in Germany have a much bigger impact on Eurozone aggregates than developments in Estonia or Cyprus is easily overlooked. Beyond its manpower and the constituency it represents, there are further reasons to believe that the Bundesbank plays a particularly important role within Eurosystem committees, prestige and tradition being amongst them. In terms of monetary policy- making the Bundesbank is de facto the ECB’s predecessor. Thanks to its dominating position in the European Monetary System (EMS), the German Bundesbank was re- garded as “the bank that rules Europe” (Marsh 1992). This obviously changed with the creation of the Eurosystem. Yet generations of European central bankers were social- ized while their institutions were shadowing the Bundesbank’s decisions and changed domestic policies following the German example. Even though the ECB “supplanted the Bundesbank as the leading central bank on the European continent” (Howarth 2009: 87) almost two decades ago, its dominating position in the past may still lend Bundesbank arguments particular credibility within Eurosystem committees.

Media Pressure: breaking the ranks

National central banks may choose to influence ECB decisions not through internal committees but by creating pressure from outside. One way to do so that has arguably gained importance in the crisis is the attempt to influence public opinion through me- dia interventions. While this was long seen as a violation of the ECB’s golden rule of collegial and consensual policymaking, this seems to have become the weapon of choice for the German Bundesbank – especially after the ECB started buying govern- ment bonds (see Chapter 6). The Bundesbank’s strategic reorientation towards this channel is arguably the main reason why media reports have focused so much on ten- sions between the ECB and the Bundesbank in their coverage of Eurosystem monetary policy. Another may be that it simply is a compelling story, given the Bundesbank’s status as implicit predecessor of the ECB and Germany’s notorious inflation fear. Therefore, other dissenting voices – from Estonia, Austria, the Netherlands, Finland, or Luxemburg – were all too easily overlooked.

Yet it is true that the German Bundesbank actively seeks media attention. It is particu- larly outspoken and consistent in its communication. While other NCBs known for a rather hawkish stance often share the German position, the Bundesbank’s communica- tion strategy is focused on clear, simple and consistent messages. This is due to the strong institutional theoretical framework the Bundesbank has developed. While this well-established framework serves as a ‘moral construct’ and guideline to Bundesbank representatives,48 other NCBs don’t have such a strong theoretical framework. They are more flexible – or, to phrase it more negatively: less consistent – in their positions. Bundesbank officials also focus more on shaping public opinion, while governors of

48

46 other NCBs are not as eager to talk to the press.49 This focus on voice by Bundesbank officials can be seen as a strategic reorientation after EMU: having lost its autonomy to set monetary policy, the post-euro Bundesbank has focused on its special role as ‘guardian’ of stability in Europe – notably through communication (Dyson 2009: 135). All this may explain why German opposition gains more media attention than, say, dissent from Estonia.