Fine Gael Dublin MEP and Economic and Monetary Affairs Committee member, Brian Hayes, has today asked the European Central Bank (ECB) to clarify if any new voting procedure will apply at the Bank when Lithuania joins the Euro from January next year.
“Lituania’s decision to join the Euro is good news for Europe and good news for the currency’s future. Only 18 months ago we heard a growing band of Euro sceptics predict that the Euro would break up or subdivide between Euro countries of the North and South. None of this took place, in fact the Euro is now stronger than ever as more counties contemplate joining. By increasing the number of countries from 18 to 19, the Euro is demonstrating to the world that it is a strong reserve currency and that it is here to stay.
“It is against this background, as new countries join the single currency, that some rearrangement of voting was always considered, so that effective decision making at the Executive Council would take place. It’s no different to the QMV procedure at the European Council or the rotation of countries voting at the IMF.
“It is anticipated that Lithuania’s entry into the euro zone will trigger the rotation of Ireland, along with 13 other countries, to share 11 votes at the ECB executive board. In effect, each of these countries, including Ireland, will miss the right to vote in one out of twelve months of the year, if this new voting system is deployed. Currently, it is one country one vote – with a simple majority applying. The five biggest countries will share four votes under this new system.
“Given the proximity of the financial crisis to ordinary European citizens and the need to bed down popular support for the Euro project, it makes sense to consider delaying this new voting system. In fact there is provision in the legislation which allows for an entirely new voting system when the Euro becomes 22 countries. It would be entirely wrong and counter productive if the impression was created that some form of second class Euro membership applied because of entitlement to vote at the executive council.
“Much of the success of the European Union to date are the real checks and balances put into the system to protect small counties and to ensure that all voices are heard before important decisions are taken. The same principal should apply at the ECB.
“I intend raising this matter with the President of the ECB, Mario Draghi, at the next monetary dialogue meeting between the ECB and the ECON Committee of Parliament.
“At the very least there should be a guarantee from the ECB, that if a country is not voting because of rotation, that the concerns of that country have to be reflected in the final decision of the ECB. This needs to be a minimum requirement and I believe that the ECB President has a duty to clarify how this new system will operate so as to maximise confidence especially in smaller Member States.”