The European Central Bank (ECB) is operationally independent, within the limits of the treaty and the statute, but especially in matters concerning the member states, the national central banks or outside operators, certain additional parameters are subject to outside political control, with the Council as decision-maker.
We look at the system for complementary ECB legislation.
***
Article 107(6) of the Treaty establishing the European Community (TEC), in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/88, provides the legal base for certain provisions referred to in the ESCB Statute:
Article 107(6) TEC
6. The Council, acting by a qualified majority either on a proposal from the Commission and after consulting the European Parliament and the ECB or on a recommendation from the ECB and after consulting the European Parliament and the Commission, shall adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of the Statute of the ESCB.
***
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (annexed to the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/256─280) contains the Articles referred to.
Article 4 ESCB Statute concerns the mandatory consultation of the European Central Bank on any proposed Community act in its fields of competence and by national authorities regarding any draft legislative provision in its fields of competence.
Article 42 ESCB Statute gave the Council an obligation to act:
Article 42 ESCB Statute
Complementary legislation
In accordance with Article 107(6) of this Treaty, immediately after the decision on the date for the beginning of the third stage, the Council, acting by a qualified majority either on a proposal from the Commission and after consulting the European Parliament and the ECB or on a recommendation from the ECB and after consulting the European Parliament and the Commission, shall adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of this Statute.
Pursuant to ESCB Statute Article 5.4, the Council, in accordance with the procedure laid down in Article 42, shall define the natural and legal persons subject to reporting requirements, the confidentiality regime and the appropriate provisions for enforcement.
According to ESCB Statute Article 19.2 the Council shall, in accordance with the procedure laid down in Article 42, define the basis for minimum reserves and the maximum permissible ratios between those reserves and their basis, as well as the appropriate sanctions in cases of noncompliance.
Article 20 ESCB Statute gives the ECB Governing Council the right to decide, by a majority of two thirds of the votes cast, upon the use of such other operational methods of monetary control as it sees fit, but within the scope of such methods defined by the Council, if they impose obligations on third parties.
Article 28.1 ESCB Statute concerns the capital of the ECB. Initially it was set at ECU (later euro) 5 000 million, but subject to later increases by such amounts as may be decided by the
Governing Council acting by the qualified majority provided for in Article 10.3, within the limits
and under the conditions set by the Council under the procedure laid down in Article 42.
ESCB Statute Article 29.2 regards the statistical data used to determine the ECB capital key subscription. The data shall be provided by the Commission in accordance with the rules adopted by the Council under the procedure provided for in Article 42.
Article 30.4 ESCB Statute provides for the possible transfer of additional foreign reserve assets from national central banks to the European Central Bank, within the limits and under the conditions set by the Council in accordance with the procedure laid down in Article 42.
Article 34.3 ESCB Statute provides for the Council to set the limits and the conditions of the fines and periodic penalty payments the ECB is entitled to impose on undertakings for failure to comply with obligations under its regulations and decisions.
***
At this stage, I leave it to the interested reader to look for the concrete Council Decisions and Regulations implementing ESCB Statute Article 42.
Ralf Grahn
Showing posts with label Article 107. Show all posts
Showing posts with label Article 107. Show all posts
Thursday, 30 October 2008
Wednesday, 29 October 2008
European Central Bank Ig: Amending ESCB Statute
Amending the treaties of the European Union is a laborious (some would say impossible) process in a union of 27. All the same, the member states have negotiated voluminous treaties and protocols in fine detail. This leads to recurring needs for amendments when policies evolve and circumstances change.
The member states have generally put themselves in the place of Tantalus: Constant hunger and thirst, but no satisfaction.
Well, not totally. The enabling clause (passerelle) has been introduced to make simplified amendments possible, in details here and there.
***
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (annexed to the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/256─280) is a treaty level document, in principle requiring the application of the rules for treaty amendment if something has to be changed.
Mercifully, the member states’ governments have agreed that some household rules can be tweaked without a full-scale intergovernmental conference and ratification in every EU member state.
***
Article 107(5) of the Treaty establishing the European Community (TEC) offers an ‘amendment light’ procedure for changing parts of the ESCB Statute. This ‘passerelle’ type provision is limited to certain Articles, and four EU bodies are involved in each change, with the representatives of the member states (the Council) making the decision.
Here is paragraph 5 on the scope of simplified amendments (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/88):
Article 107(5) TEC
5. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of the Statute of the ESCB may be amended by the Council, acting either by a qualified majority on a recommendation from the ECB and after consulting the Commission or unanimously on a proposal from the Commission and after consulting the ECB. In either case, the assent of the European Parliament shall be required.
***
For some people, enabling clauses are one more devious example of power-creep by ‘Brussels’ (although the European Central Bank is located in Frankfurt am Main), so we have to take a closer look at how the TEC places our distinct heritages and age-old freedoms at risk. In other words, we have to turn to the ESCB Statute to see what the Articles cover.
Article 5.1: Collecting statistical information.
Article 5.2: National central banks gathering statistical information.
Article 5.3: ECB rules for the collection, compilation and distribution of statistics.
Article 17: The ECB and the national central banks have the authority to open accounts
for credit institutions, public entities and other market participants and accept assets, including
book entry securities, as collateral.
Article 18: The ECB and the national central banks carry out open market and credit operations according to general principles established by the ECB.
Article 19.1: The ECB can determine the minimum reserve accounts credit institutions and national central banks have to hold, and the ECB can levy penalty interest and impose sanctions in case of non-compliance.
Article 22: the ECB may make regulations to ensure efficient and sound clearing and payment systems.
Article 23: The ECB and the national central banks can establish international relations with central banks and financial institutions in other countries and, where appropriate, with international organisations, and they can conduct international banking operations.
Article 24: the ECB and national central banks may enter into operations for their administrative purposes or for their staff.
Article 26: On annual financial accounts of the ECB and a consolidated ESCB balance sheet.
Article 32.2: Guidelines for determining each national central bank’s annual monetary income from its assets.
Article 32.3: An alternative method for determining the national central bank’s monetary income.
Article 32.4: Deductions from the monetary income.
Article 32.6: Clearing and settlement of monetary income.
Article 33.1(a): Allocation of the net profit of the ECB.
Article 36: The Governing Council lays down the conditions of employment of the staff of the ECB, and the Court of Justice has jurisdiction in disputes.
***
Most of the tasks listed above look necessary, if the ECB is to function as a central bank, so it is difficult to imagine the abolishment of (m)any powers. On the other hand, only a few of the Articles seem to leave any room for positive amendments, because the ECB appears to have the (necessary) power.
This leaves us puzzled.
Has the enabling clause for simplified amendments been written for (educational) reasons of principle or for fun?
Or are there concrete and practical reasons to anticipate amendments of the ESCB Statute?
I would be most pleased, if knowledgeable readers would care to comment.
Ralf Grahn
The member states have generally put themselves in the place of Tantalus: Constant hunger and thirst, but no satisfaction.
Well, not totally. The enabling clause (passerelle) has been introduced to make simplified amendments possible, in details here and there.
***
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (annexed to the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/256─280) is a treaty level document, in principle requiring the application of the rules for treaty amendment if something has to be changed.
Mercifully, the member states’ governments have agreed that some household rules can be tweaked without a full-scale intergovernmental conference and ratification in every EU member state.
***
Article 107(5) of the Treaty establishing the European Community (TEC) offers an ‘amendment light’ procedure for changing parts of the ESCB Statute. This ‘passerelle’ type provision is limited to certain Articles, and four EU bodies are involved in each change, with the representatives of the member states (the Council) making the decision.
Here is paragraph 5 on the scope of simplified amendments (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/88):
Article 107(5) TEC
5. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of the Statute of the ESCB may be amended by the Council, acting either by a qualified majority on a recommendation from the ECB and after consulting the Commission or unanimously on a proposal from the Commission and after consulting the ECB. In either case, the assent of the European Parliament shall be required.
***
For some people, enabling clauses are one more devious example of power-creep by ‘Brussels’ (although the European Central Bank is located in Frankfurt am Main), so we have to take a closer look at how the TEC places our distinct heritages and age-old freedoms at risk. In other words, we have to turn to the ESCB Statute to see what the Articles cover.
Article 5.1: Collecting statistical information.
Article 5.2: National central banks gathering statistical information.
Article 5.3: ECB rules for the collection, compilation and distribution of statistics.
Article 17: The ECB and the national central banks have the authority to open accounts
for credit institutions, public entities and other market participants and accept assets, including
book entry securities, as collateral.
Article 18: The ECB and the national central banks carry out open market and credit operations according to general principles established by the ECB.
Article 19.1: The ECB can determine the minimum reserve accounts credit institutions and national central banks have to hold, and the ECB can levy penalty interest and impose sanctions in case of non-compliance.
Article 22: the ECB may make regulations to ensure efficient and sound clearing and payment systems.
Article 23: The ECB and the national central banks can establish international relations with central banks and financial institutions in other countries and, where appropriate, with international organisations, and they can conduct international banking operations.
Article 24: the ECB and national central banks may enter into operations for their administrative purposes or for their staff.
Article 26: On annual financial accounts of the ECB and a consolidated ESCB balance sheet.
Article 32.2: Guidelines for determining each national central bank’s annual monetary income from its assets.
Article 32.3: An alternative method for determining the national central bank’s monetary income.
Article 32.4: Deductions from the monetary income.
Article 32.6: Clearing and settlement of monetary income.
Article 33.1(a): Allocation of the net profit of the ECB.
Article 36: The Governing Council lays down the conditions of employment of the staff of the ECB, and the Court of Justice has jurisdiction in disputes.
***
Most of the tasks listed above look necessary, if the ECB is to function as a central bank, so it is difficult to imagine the abolishment of (m)any powers. On the other hand, only a few of the Articles seem to leave any room for positive amendments, because the ECB appears to have the (necessary) power.
This leaves us puzzled.
Has the enabling clause for simplified amendments been written for (educational) reasons of principle or for fun?
Or are there concrete and practical reasons to anticipate amendments of the ESCB Statute?
I would be most pleased, if knowledgeable readers would care to comment.
Ralf Grahn
Tuesday, 28 October 2008
European Central Bank If: ESCB and ECB Statute
The legal framework of the European System of Central Banks (ESCB) and the European Central Bank (ECB) is set out at treaty level in the Treaty establishing the European Community (TEC) and in the Statute of the European System of Central Banks and of the European Central Bank (ESCB Statute).
***
Article 107(4) TEC is the bridge between the treaty proper and the ESCB Statute:
4. The Statute of the ESCB is laid down in a Protocol annexed to this Treaty.
***
ESCB Statute
We have referred to individual Articles of the ESCB Statute in a number of posts (and will do so again), because Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (annexed to the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/256─280) not only repeats, but elaborates on the treaty provisions.
This blog post is content to give you an overview of the ESCB Statute, by presenting a table of contents, which makes it easier to find what you want.
CHAPTER I
CONSTITUTION OF THE ESCB
Article 1 The European System of Central Banks
CHAPTER II
OBJECTIVES AND TASKS OF THE ESCB
Article 2 Objectives
Article 3 Tasks
Article 4 Advisory functions
Article 5 Collection of statistical information
Article 6 International cooperation
CHAPTER III
ORGANISATION OF THE ESCB
Article 7 Independence
Article 8 General principle
Article 9 The European Central Bank
Article 10 The Governing Council
Article 11 The Executive Board
Article 12 Responsibilities of the decision-making bodies
Article 13 The President
Article 14 National central banks
Article 15 Reporting commitments
Article 16 Banknotes
CHAPTER IV
MONETARY FUNCTIONS AND OPERATIONS OF THE ESCB
Article 17 Accounts with the ECB and the national central banks
Article 18 Open market and credit operations
Article 19 Minimum reserves
Article 20 Other instruments of monetary control
Article 21 Operations with public entities
Article 22 Clearing and payment systems
Article 23 External operations
Article 24 Other operations
CHAPTER V
PRUDENTIAL SUPERVISION
Article 25 Prudential supervision
CHAPTER VI
FINANCIAL PROVISIONS OF THE ESCB
Article 26 Financial accounts
Article 27 Auditing
Article 28 Capital of the ECB
Article 29 Key for capital subscription
Article 30 Transfer of foreign reserve assets to the ECB
Article 31 Foreign reserve assets held by national central banks
Article 32 Allocation of monetary income of national central banks
Article 33 Allocation of net profits and losses of the ECB
CHAPTER VII
GENERAL PROVISIONS
Article 34 Legal acts
Article 35 Judicial control and related matters
Article 36 Staff
Article 37 Seat
Article 38 Professional secrecy
Article 39 Signatories
Article 40 Privileges and immunities
CHAPTER VIII
AMENDMENT OF THE STATUTE AND COMPLEMENTARY LEGISLATION
Article 41 Simplified amendment procedure
Article 42 Complementary legislation
CHAPTER IX
TRANSITIONAL AND OTHER PROVISIONS FOR THE ESCB
Article 43 General provisions
Article 44 Transitional tasks of the ECB
Article 45 The General Council of the ECB
Article 46 Rules of Procedure of the General Council
Article 47 Responsibilities of the General Council
Article 48 Transitional provisions for the capital of the ECB
Article 49 Deferred payment of capital, reserves and provisions of the ECB
Article 50 Initial appointment of the members of the Executive Board
Article 51 Derogation from Article 32
Article 52 Exchange of banknotes in Community currencies
Article 53 Applicability of the transitional provisions
***
ECB Rules of Procedure
The ECB Rules of Procedure supplement the Treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank, and they define the term ‘Eurosystem’ to mean the European Central Bank (ECB) and the national central banks of those Member States whose currency is the euro.
In other words, for added detail on the operating rules of the ECB, you can go to the Decision of the European Central Bank of 19 February 2004 adopting the Rules of Procedure of the European Central Bank (ECB/2004/2); OJ 18.3.2004 C 080/33.
***
ECB General Council Rules of Procedure
Since the European Union is doomed to have non-euro area national central banks for the forseeadle future, the European Central Bank has adopted Rules of Procedure of the ‘transitional’ General Council:
Decision of the European Central Bank of 17 June 2004 adopting the Rules of Procedure of the General Council of the European Central Bank (ECB/2004/12); OJ 30.6.2004 L 230/61.
Ralf Grahn
***
Article 107(4) TEC is the bridge between the treaty proper and the ESCB Statute:
4. The Statute of the ESCB is laid down in a Protocol annexed to this Treaty.
***
ESCB Statute
We have referred to individual Articles of the ESCB Statute in a number of posts (and will do so again), because Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (annexed to the latest consolidated version of the current treaties, OJ 29.12.2006 C 321 E/256─280) not only repeats, but elaborates on the treaty provisions.
This blog post is content to give you an overview of the ESCB Statute, by presenting a table of contents, which makes it easier to find what you want.
CHAPTER I
CONSTITUTION OF THE ESCB
Article 1 The European System of Central Banks
CHAPTER II
OBJECTIVES AND TASKS OF THE ESCB
Article 2 Objectives
Article 3 Tasks
Article 4 Advisory functions
Article 5 Collection of statistical information
Article 6 International cooperation
CHAPTER III
ORGANISATION OF THE ESCB
Article 7 Independence
Article 8 General principle
Article 9 The European Central Bank
Article 10 The Governing Council
Article 11 The Executive Board
Article 12 Responsibilities of the decision-making bodies
Article 13 The President
Article 14 National central banks
Article 15 Reporting commitments
Article 16 Banknotes
CHAPTER IV
MONETARY FUNCTIONS AND OPERATIONS OF THE ESCB
Article 17 Accounts with the ECB and the national central banks
Article 18 Open market and credit operations
Article 19 Minimum reserves
Article 20 Other instruments of monetary control
Article 21 Operations with public entities
Article 22 Clearing and payment systems
Article 23 External operations
Article 24 Other operations
CHAPTER V
PRUDENTIAL SUPERVISION
Article 25 Prudential supervision
CHAPTER VI
FINANCIAL PROVISIONS OF THE ESCB
Article 26 Financial accounts
Article 27 Auditing
Article 28 Capital of the ECB
Article 29 Key for capital subscription
Article 30 Transfer of foreign reserve assets to the ECB
Article 31 Foreign reserve assets held by national central banks
Article 32 Allocation of monetary income of national central banks
Article 33 Allocation of net profits and losses of the ECB
CHAPTER VII
GENERAL PROVISIONS
Article 34 Legal acts
Article 35 Judicial control and related matters
Article 36 Staff
Article 37 Seat
Article 38 Professional secrecy
Article 39 Signatories
Article 40 Privileges and immunities
CHAPTER VIII
AMENDMENT OF THE STATUTE AND COMPLEMENTARY LEGISLATION
Article 41 Simplified amendment procedure
Article 42 Complementary legislation
CHAPTER IX
TRANSITIONAL AND OTHER PROVISIONS FOR THE ESCB
Article 43 General provisions
Article 44 Transitional tasks of the ECB
Article 45 The General Council of the ECB
Article 46 Rules of Procedure of the General Council
Article 47 Responsibilities of the General Council
Article 48 Transitional provisions for the capital of the ECB
Article 49 Deferred payment of capital, reserves and provisions of the ECB
Article 50 Initial appointment of the members of the Executive Board
Article 51 Derogation from Article 32
Article 52 Exchange of banknotes in Community currencies
Article 53 Applicability of the transitional provisions
***
ECB Rules of Procedure
The ECB Rules of Procedure supplement the Treaty establishing the European Community and the Statute of the European System of Central Banks and of the European Central Bank, and they define the term ‘Eurosystem’ to mean the European Central Bank (ECB) and the national central banks of those Member States whose currency is the euro.
In other words, for added detail on the operating rules of the ECB, you can go to the Decision of the European Central Bank of 19 February 2004 adopting the Rules of Procedure of the European Central Bank (ECB/2004/2); OJ 18.3.2004 C 080/33.
***
ECB General Council Rules of Procedure
Since the European Union is doomed to have non-euro area national central banks for the forseeadle future, the European Central Bank has adopted Rules of Procedure of the ‘transitional’ General Council:
Decision of the European Central Bank of 17 June 2004 adopting the Rules of Procedure of the General Council of the European Central Bank (ECB/2004/12); OJ 30.6.2004 L 230/61.
Ralf Grahn
Monday, 27 October 2008
European Central Bank Ie: Governing Council and Executive Board
The governing bodies of the European System of Central Banks (ESCB) are written into the Treaty establishing the European Community (TEC) as if all EU member states had adopted the euro currency. In practice, the European Central Bank (ECB) is at the core of the Eurosystem, including the national central banks of the eurozone countries, but additional decision-making structures will have to accommodate three groups of “outsider” countries for a long time, possibly even permanently:
First, there are the old member states the United Kingdom and Denmark with, in principle, permanent opt-outs from the single currency, and Sweden technically not fit for the third stage of economic and monetary union (EMU).
The second group consists of the new member states with a derogation, not yet able (or willing) to adopt the euro currency.
Third, future EU member states will mean new recruits to the non-euro group, if the enlargement process continues, before they fulfil the convergence criteria.
***
Eurosystem
Article 107(3) TEC reflects the “official position”, which is a reality for the 15 (soon 16) eurozone countries (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/88):
Article 107(3) TEC
3. The ESCB shall be governed by the decision-making bodies of the ECB which shall be the Governing Council and the Executive Board.
***
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (OJ 29.12.2006 C 321 E/256─280) repeats and elaborates on the treaty provisions in Chapter III Organisation of the ESCB.
The single currency evidently needs centralised decision-making structures, reflected in the ESCB Statute, which reiterates that the decision-making bodies of the ESCB are those of the ECB:
Article 8 ESCB Statute
General principle
The ESCB shall be governed by the decision-making bodies of the ECB.
***
The rest of Article 107(3) TEC is repeated in Article 9.3 of the ESCB Statute, which names the Governing Council and the Executive Board of the ECB as the decision-making bodies:
Article 9 ESCB Statute
The European Central Bank
9.1. The ECB which, in accordance with Article 107(2) of this Treaty, shall have legal personality, shall enjoy in each of the Member States the most extensive legal capacity accorded to legal persons under its law; it may, in particular, acquire or dispose of movable and immovable property and may be a party to legal proceedings.
9.2. The ECB shall ensure that the tasks conferred upon the ESCB under Article 105(2), (3) and (5) of this Treaty are implemented either by its own activities pursuant to this Statute or through the national central banks pursuant to Articles 12.1 and 14.
9.3. In accordance with Article 107(3) of this Treaty, the decision making bodies of the ECB shall be the Governing Council and the Executive Board.
***
The basic treaty provisions on the composition of the decision-making bodies are set out in Article 112 TEC (ex Article 109a). The core group is the ECB Executive Board, with six members, the President, the Vice-President and four other members. They are also members of the larger Governing Council, where the Governors of the national central banks sit:
CHAPTER 3
INSTITUTIONAL PROVISIONS
Article 112 TEC
1. The Governing Council of the ECB shall comprise the members of the Executive Board of the ECB and the Governors of the national central banks.
2. (a) The Executive Board shall comprise the President, the Vice-President and four other members.
(b) The President, the Vice-President and the other members of the Executive Board shall be appointed from among persons of recognised standing and professional experience in monetary or banking matters by common accord of the governments of the Member States at the level of Heads of State or Government, on a recommendation from the Council, after it has consulted the European Parliament and the Governing Council of the ECB.
Their term of office shall be eight years and shall not be renewable.
Only nationals of Member States may be members of the Executive Board.
***
ESCB Statute
Article 10 of the ESCB Statute modifies the voting rights in the ECB Governing Council, when the number of Eurosystem national central banks increases, for the first time when the number exceeds 15 (as it will on 1 January 2009), if the Governing Council does not decide to postpone the rotation system until the number of governors exceeds 18.
For certain decisions the votes are weighted according to the national central banks' shares in the subscribed capital of the ECB.
***
ESCB Statute Article 11 reiterates and expands upon the provisions on the ECB Executive Board in Article 112 TEC.
***
The main responsibilities of the ECB Governing Council and the Executive Board are set out in Article 12 of the ESCB Statute.
***
ECB Executive Board members
The first President of the Executive Board was Wim Duisenberg (from 1998 to 2003). The appointment of the current President Jean-Claude Trichet runs from 2003 to 2011.
Lucas Papademos is Vice-President and the four other members of the Executive Board are: Gertrude Trumpel-Guderell, José Manuel González-Páramo, Lorenzo Bini Smaghi and Jürgen Stark.
The European Central Bank offers additional information on the Executive Board, including current and past members, at:
http://www.ecb.europa.eu/ecb/orga/decisions/eb/html/index.en.html
***
ECB Governing Council members
In addition to the six members of the Executive Board, the ECB Governing Council consists of the governors of the fifteen Eurosystem national central banks:
Guy Quaden (Nationale Bank van België / Banque Nationale de Belgique)
Axel A. Weber (Deutsche Bundesbank)
John Hurley (Central Bank and Financial Services Authority of Ireland)
Georgios Provopoulos (Bank of Greece)
Miguel Fernández Ordóñez (Banco de España)
Christian Noyer (Banque de France)
Mario Draghi (Banca d’Italia)
Athanasios Orphanides (Central Bank of Cyprus)
Yves Mersch (Banque centrale du Luxembourg)
Michael C. Bonello (Central Bank of Malta)
Nout Wellink (De Nederlandsche Bank)
Ewald Nowotny (Oesterreichische Nationalbank)
Vítor Manuel Ribeiro Constáncio (Banco de Portugal)
Marko Kranjec (Banka Slovenije)
Erkki Liikanen (Suomen Pankki – Finlands Bank)
The ECB’s web page on the Governing Council is available at:
http://www.ecb.europa.eu/ecb/orga/decisions/govc/html/index.en.html
***
Member States with a derogation
ECB General Council
The General Council of the European Central Bank is, in principle, a transitional body, where the President and the Vice-President of the ECB Executive Board and the governors of the Eurosystem national central banks are joined by the 12 governors of the non-eurozone national central banks.
Article 44 of the ESCB Statute on transitional tasks provides that the ECB shall take over those tasks of the EMI which, because of the derogations of one or more member states, still have to be performed in the third stage, and that the ECB shall give advice in the preparations for the abrogation of the derogations specified in Article 122 TEC.
ESCB Statute Article 45 is the main provision on the composition of the General Council:
Article 45 ESCB Statute
The General Council of the ECB
45.1. Without prejudice to Article 107(3) of this Treaty, the General Council shall be constituted as a third decision-making body of the ECB.
45.2. The General Council shall comprise the President and Vice-President of the ECB and the Governors of the national central banks. The other members of the Executive Board may participate, without having the right to vote, in meetings of the General Council.
45.3. The responsibilities of the General Council are listed in full in Article 47 of this Statute.
***
The Rules of Procedure of the General Council are dealt with in Article 46 and the Responsibilities of the General Council are laid down in Article 47 of the ESCB Statute.
***
ECB General Council members
In addition to the President and the Vice-President of the ECB Executive Board and the governors of the Eurosystem national central banks the ECB General Council joins the 12 governors of the non-eurozone national central banks (member states with a derogation):
Ivan Iskrov (Bulgarian National Bank)
Zdeněk Tůma (Česká národní banka)
Nils Bernstein (Danmarks Nationalbank)
Andres Lipstok (Eesti Pank)
Ilmārs Rimšēvičs (Latvijas Banka)
Reinoldius Šarkinas (Lietuvos bankas)
András Simor (Magyar Nemzeti Bank)
Slawomir Skrzypek (Narodowy Bank Polski)
Mugur Isǎresku (Banca Natională a Romăniei)
Ivan Šramko (Národná banka slovenska)
Stefan Ingves (Sveriges Riksbank)
Mervyn King (Bank of England)
The ECB’s web page on the General Council is accessible at:
http://www.ecb.europa.eu/ecb/orga/decisions/genc/html/index.en.html
Ralf Grahn
First, there are the old member states the United Kingdom and Denmark with, in principle, permanent opt-outs from the single currency, and Sweden technically not fit for the third stage of economic and monetary union (EMU).
The second group consists of the new member states with a derogation, not yet able (or willing) to adopt the euro currency.
Third, future EU member states will mean new recruits to the non-euro group, if the enlargement process continues, before they fulfil the convergence criteria.
***
Eurosystem
Article 107(3) TEC reflects the “official position”, which is a reality for the 15 (soon 16) eurozone countries (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/88):
Article 107(3) TEC
3. The ESCB shall be governed by the decision-making bodies of the ECB which shall be the Governing Council and the Executive Board.
***
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (OJ 29.12.2006 C 321 E/256─280) repeats and elaborates on the treaty provisions in Chapter III Organisation of the ESCB.
The single currency evidently needs centralised decision-making structures, reflected in the ESCB Statute, which reiterates that the decision-making bodies of the ESCB are those of the ECB:
Article 8 ESCB Statute
General principle
The ESCB shall be governed by the decision-making bodies of the ECB.
***
The rest of Article 107(3) TEC is repeated in Article 9.3 of the ESCB Statute, which names the Governing Council and the Executive Board of the ECB as the decision-making bodies:
Article 9 ESCB Statute
The European Central Bank
9.1. The ECB which, in accordance with Article 107(2) of this Treaty, shall have legal personality, shall enjoy in each of the Member States the most extensive legal capacity accorded to legal persons under its law; it may, in particular, acquire or dispose of movable and immovable property and may be a party to legal proceedings.
9.2. The ECB shall ensure that the tasks conferred upon the ESCB under Article 105(2), (3) and (5) of this Treaty are implemented either by its own activities pursuant to this Statute or through the national central banks pursuant to Articles 12.1 and 14.
9.3. In accordance with Article 107(3) of this Treaty, the decision making bodies of the ECB shall be the Governing Council and the Executive Board.
***
The basic treaty provisions on the composition of the decision-making bodies are set out in Article 112 TEC (ex Article 109a). The core group is the ECB Executive Board, with six members, the President, the Vice-President and four other members. They are also members of the larger Governing Council, where the Governors of the national central banks sit:
CHAPTER 3
INSTITUTIONAL PROVISIONS
Article 112 TEC
1. The Governing Council of the ECB shall comprise the members of the Executive Board of the ECB and the Governors of the national central banks.
2. (a) The Executive Board shall comprise the President, the Vice-President and four other members.
(b) The President, the Vice-President and the other members of the Executive Board shall be appointed from among persons of recognised standing and professional experience in monetary or banking matters by common accord of the governments of the Member States at the level of Heads of State or Government, on a recommendation from the Council, after it has consulted the European Parliament and the Governing Council of the ECB.
Their term of office shall be eight years and shall not be renewable.
Only nationals of Member States may be members of the Executive Board.
***
ESCB Statute
Article 10 of the ESCB Statute modifies the voting rights in the ECB Governing Council, when the number of Eurosystem national central banks increases, for the first time when the number exceeds 15 (as it will on 1 January 2009), if the Governing Council does not decide to postpone the rotation system until the number of governors exceeds 18.
For certain decisions the votes are weighted according to the national central banks' shares in the subscribed capital of the ECB.
***
ESCB Statute Article 11 reiterates and expands upon the provisions on the ECB Executive Board in Article 112 TEC.
***
The main responsibilities of the ECB Governing Council and the Executive Board are set out in Article 12 of the ESCB Statute.
***
ECB Executive Board members
The first President of the Executive Board was Wim Duisenberg (from 1998 to 2003). The appointment of the current President Jean-Claude Trichet runs from 2003 to 2011.
Lucas Papademos is Vice-President and the four other members of the Executive Board are: Gertrude Trumpel-Guderell, José Manuel González-Páramo, Lorenzo Bini Smaghi and Jürgen Stark.
The European Central Bank offers additional information on the Executive Board, including current and past members, at:
http://www.ecb.europa.eu/ecb/orga/decisions/eb/html/index.en.html
***
ECB Governing Council members
In addition to the six members of the Executive Board, the ECB Governing Council consists of the governors of the fifteen Eurosystem national central banks:
Guy Quaden (Nationale Bank van België / Banque Nationale de Belgique)
Axel A. Weber (Deutsche Bundesbank)
John Hurley (Central Bank and Financial Services Authority of Ireland)
Georgios Provopoulos (Bank of Greece)
Miguel Fernández Ordóñez (Banco de España)
Christian Noyer (Banque de France)
Mario Draghi (Banca d’Italia)
Athanasios Orphanides (Central Bank of Cyprus)
Yves Mersch (Banque centrale du Luxembourg)
Michael C. Bonello (Central Bank of Malta)
Nout Wellink (De Nederlandsche Bank)
Ewald Nowotny (Oesterreichische Nationalbank)
Vítor Manuel Ribeiro Constáncio (Banco de Portugal)
Marko Kranjec (Banka Slovenije)
Erkki Liikanen (Suomen Pankki – Finlands Bank)
The ECB’s web page on the Governing Council is available at:
http://www.ecb.europa.eu/ecb/orga/decisions/govc/html/index.en.html
***
Member States with a derogation
ECB General Council
The General Council of the European Central Bank is, in principle, a transitional body, where the President and the Vice-President of the ECB Executive Board and the governors of the Eurosystem national central banks are joined by the 12 governors of the non-eurozone national central banks.
Article 44 of the ESCB Statute on transitional tasks provides that the ECB shall take over those tasks of the EMI which, because of the derogations of one or more member states, still have to be performed in the third stage, and that the ECB shall give advice in the preparations for the abrogation of the derogations specified in Article 122 TEC.
ESCB Statute Article 45 is the main provision on the composition of the General Council:
Article 45 ESCB Statute
The General Council of the ECB
45.1. Without prejudice to Article 107(3) of this Treaty, the General Council shall be constituted as a third decision-making body of the ECB.
45.2. The General Council shall comprise the President and Vice-President of the ECB and the Governors of the national central banks. The other members of the Executive Board may participate, without having the right to vote, in meetings of the General Council.
45.3. The responsibilities of the General Council are listed in full in Article 47 of this Statute.
***
The Rules of Procedure of the General Council are dealt with in Article 46 and the Responsibilities of the General Council are laid down in Article 47 of the ESCB Statute.
***
ECB General Council members
In addition to the President and the Vice-President of the ECB Executive Board and the governors of the Eurosystem national central banks the ECB General Council joins the 12 governors of the non-eurozone national central banks (member states with a derogation):
Ivan Iskrov (Bulgarian National Bank)
Zdeněk Tůma (Česká národní banka)
Nils Bernstein (Danmarks Nationalbank)
Andres Lipstok (Eesti Pank)
Ilmārs Rimšēvičs (Latvijas Banka)
Reinoldius Šarkinas (Lietuvos bankas)
András Simor (Magyar Nemzeti Bank)
Slawomir Skrzypek (Narodowy Bank Polski)
Mugur Isǎresku (Banca Natională a Romăniei)
Ivan Šramko (Národná banka slovenska)
Stefan Ingves (Sveriges Riksbank)
Mervyn King (Bank of England)
The ECB’s web page on the General Council is accessible at:
http://www.ecb.europa.eu/ecb/orga/decisions/genc/html/index.en.html
Ralf Grahn
Saturday, 25 October 2008
European Central Bank Ib: European System of Central Banks
The European System of Central Banks (ESCB) is composed of the European Central Bank (ECB) and of the national central banks.
***
In addition to the provisions in the Treaty establishing the European Community (TEC), treaty level rules have been set out in a Protocol annexed to the treaty.
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (1992) defines the Constitution of the ESCB in Chapter 1, Article 1 (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/256):
Article 1 ESCB Statute
The European System of Central Banks
1.1. The European System of Central Banks (ESCB) and the European Central Bank (ECB) shall
be established in accordance with Article 8 of this Treaty; they shall perform their tasks and carry
on their activities in accordance with the provisions of this Treaty and of this Statute.
1.2. In accordance with Article 107(1) of this Treaty, the ESCB shall be composed of the ECB
and of the central banks of the Member States (‘national central banks’). The Institut monétaire
luxembourgeois will be the central bank of Luxembourg.
***
Article 107(1) TEC applies to all member states. Consequently the national central banks of all EU member states form part of the ESCB, together with the ECB.
The term Eurosystem is narrower, in that it is applied to the ECB and the national central banks of the countries that have adopted the euro.
***
The 27 EU national central banks are the following:
Austria: Oesterreichische Nationalbank
Belgium: Nationale Bank van België/Banque Nationale de Belgique
Bulgaria: Bulgarian National Bank
Cyprus: Central Bank of Cyprus
Czech Republic: Česká národní banka
Denmark: Danmarks Nationalbank
Estonia: Eesti Pank
Finland: Suomen Pankki - Finlands Bank
France: Banque de France
Germany: Deutsche Bundesbank
Greece: Bank of Greece
Hungary: Magyar Nemzeti Bank
Ireland: Central Bank and Financial Services Authority of Ireland
Italy: Banca d´Italia
Latvia: Latvijas Banka
Lithuania : Lietuvos bankas
Luxembourg : Banque centrale du Luxembourg
Malta: Central Bank of Malta
Netherlands: De Nederlandsche Bank
Poland: Narodowy Bank Polski
Portugal: Banco de Portugal
Romania: Banca Naţională a României
Slovakia: Národná banka Slovenska
Slovenia: Banka Slovenije
Spain: Banco de España
Sweden: Sveriges Riksbank
United Kingdom: Bank of England
Source: European Central Bank (a web page with links to the central banks)
http://www.ecb.europa.eu/home/html/links.en.html
***
On 1 January 2009 Slovakia will join the Eurosystem, but until the end of the year 15 of the national central banks belong to the euro area and 12 countries are outside the eurozone.
Euroland: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Spain (15).
Outside the eurozone: Bulgaria, the Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Sweden, United Kingdom (12).
***
Later, we are going to see that the different groups of national central banks have repercussions for the tasks and the decision-making of the ESCB.
The next posts are going to present some reading suggestions for students of history, politics, economics and law, as well as for other interested EU citizens, and to look more closely at the legal framework of the ESCB.
Ralf Grahn
***
In addition to the provisions in the Treaty establishing the European Community (TEC), treaty level rules have been set out in a Protocol annexed to the treaty.
Protocol (No 18) on the Statute of the European System of Central Banks and of the European Central Bank (1992) defines the Constitution of the ESCB in Chapter 1, Article 1 (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321 E/256):
Article 1 ESCB Statute
The European System of Central Banks
1.1. The European System of Central Banks (ESCB) and the European Central Bank (ECB) shall
be established in accordance with Article 8 of this Treaty; they shall perform their tasks and carry
on their activities in accordance with the provisions of this Treaty and of this Statute.
1.2. In accordance with Article 107(1) of this Treaty, the ESCB shall be composed of the ECB
and of the central banks of the Member States (‘national central banks’). The Institut monétaire
luxembourgeois will be the central bank of Luxembourg.
***
Article 107(1) TEC applies to all member states. Consequently the national central banks of all EU member states form part of the ESCB, together with the ECB.
The term Eurosystem is narrower, in that it is applied to the ECB and the national central banks of the countries that have adopted the euro.
***
The 27 EU national central banks are the following:
Austria: Oesterreichische Nationalbank
Belgium: Nationale Bank van België/Banque Nationale de Belgique
Bulgaria: Bulgarian National Bank
Cyprus: Central Bank of Cyprus
Czech Republic: Česká národní banka
Denmark: Danmarks Nationalbank
Estonia: Eesti Pank
Finland: Suomen Pankki - Finlands Bank
France: Banque de France
Germany: Deutsche Bundesbank
Greece: Bank of Greece
Hungary: Magyar Nemzeti Bank
Ireland: Central Bank and Financial Services Authority of Ireland
Italy: Banca d´Italia
Latvia: Latvijas Banka
Lithuania : Lietuvos bankas
Luxembourg : Banque centrale du Luxembourg
Malta: Central Bank of Malta
Netherlands: De Nederlandsche Bank
Poland: Narodowy Bank Polski
Portugal: Banco de Portugal
Romania: Banca Naţională a României
Slovakia: Národná banka Slovenska
Slovenia: Banka Slovenije
Spain: Banco de España
Sweden: Sveriges Riksbank
United Kingdom: Bank of England
Source: European Central Bank (a web page with links to the central banks)
http://www.ecb.europa.eu/home/html/links.en.html
***
On 1 January 2009 Slovakia will join the Eurosystem, but until the end of the year 15 of the national central banks belong to the euro area and 12 countries are outside the eurozone.
Euroland: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Spain (15).
Outside the eurozone: Bulgaria, the Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Sweden, United Kingdom (12).
***
Later, we are going to see that the different groups of national central banks have repercussions for the tasks and the decision-making of the ESCB.
The next posts are going to present some reading suggestions for students of history, politics, economics and law, as well as for other interested EU citizens, and to look more closely at the legal framework of the ESCB.
Ralf Grahn
European Central Bank Ia: Article 107 TEC
A single currency is all very well, but someone has to care for it.
***
Article 7 of the Treaty establishing the European Community (TEC) mentions the institutions of the Community: the European Parliament, the Council, the Commission, the Court of Justice and the Court of Auditors.
The European Central Bank is not mentioned among the Community institutions.
Article 8 TEC (ex Article 4a) sets out the main institutional rules for monetary policy, with the establishment of the European system of central banks and the European Central Bank (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321/47):
Article 8 TEC
A European system of central banks (hereinafter referred to as ‘ESCB’) and a European Central Bank (hereinafter referred to as ‘ECB’) shall be established in accordance with the procedures laid down in this Treaty; they shall act within the limits of the powers conferred upon them by this Treaty and by the Statute of the ESCB and of the ECB (hereinafter referred to as ‘Statute of the ESCB’) annexed thereto.
***
Article 107 TEC (ex Article 106) lays out the basic structure of the European System of Central Banks (ESCB) and the European Central Bank (ECB), OJ 29.12.2006 C 321/88:
Article 107 TEC
1. The ESCB shall be composed of the ECB and of the national central banks.
2. The ECB shall have legal personality.
3. The ESCB shall be governed by the decision-making bodies of the ECB which shall be the Governing Council and the Executive Board.
4. The Statute of the ESCB is laid down in a Protocol annexed to this Treaty.
5. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of the Statute of the ESCB may be amended by the Council, acting either by a qualified majority on a recommendation from the ECB and after consulting the Commission or unanimously on a proposal from the Commission and after consulting the ECB. In either case, the assent of the European Parliament shall be required.
6. The Council, acting by a qualified majority either on a proposal from the Commission and after consulting the European Parliament and the ECB or on a recommendation from the ECB and after consulting the European Parliament and the Commission, shall adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of the Statute of the ESCB.
***
Next, this blawg, founded on the rules of law, is going to take a closer look at the current Article 107 TEC.
Ralf Grahn
***
Article 7 of the Treaty establishing the European Community (TEC) mentions the institutions of the Community: the European Parliament, the Council, the Commission, the Court of Justice and the Court of Auditors.
The European Central Bank is not mentioned among the Community institutions.
Article 8 TEC (ex Article 4a) sets out the main institutional rules for monetary policy, with the establishment of the European system of central banks and the European Central Bank (in the latest consolidated version of the treaties, OJ 29.12.2006 C 321/47):
Article 8 TEC
A European system of central banks (hereinafter referred to as ‘ESCB’) and a European Central Bank (hereinafter referred to as ‘ECB’) shall be established in accordance with the procedures laid down in this Treaty; they shall act within the limits of the powers conferred upon them by this Treaty and by the Statute of the ESCB and of the ECB (hereinafter referred to as ‘Statute of the ESCB’) annexed thereto.
***
Article 107 TEC (ex Article 106) lays out the basic structure of the European System of Central Banks (ESCB) and the European Central Bank (ECB), OJ 29.12.2006 C 321/88:
Article 107 TEC
1. The ESCB shall be composed of the ECB and of the national central banks.
2. The ECB shall have legal personality.
3. The ESCB shall be governed by the decision-making bodies of the ECB which shall be the Governing Council and the Executive Board.
4. The Statute of the ESCB is laid down in a Protocol annexed to this Treaty.
5. Articles 5.1, 5.2, 5.3, 17, 18, 19.1, 22, 23, 24, 26, 32.2, 32.3, 32.4, 32.6, 33.1(a) and 36 of the Statute of the ESCB may be amended by the Council, acting either by a qualified majority on a recommendation from the ECB and after consulting the Commission or unanimously on a proposal from the Commission and after consulting the ECB. In either case, the assent of the European Parliament shall be required.
6. The Council, acting by a qualified majority either on a proposal from the Commission and after consulting the European Parliament and the ECB or on a recommendation from the ECB and after consulting the European Parliament and the Commission, shall adopt the provisions referred to in Articles 4, 5.4, 19.2, 20, 28.1, 29.2, 30.4 and 34.3 of the Statute of the ESCB.
***
Next, this blawg, founded on the rules of law, is going to take a closer look at the current Article 107 TEC.
Ralf Grahn
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