The European Central Bank detailed plans on Thursday for changing the way the eurozone governors vote from next year, curbing smaller economies’ potential influence in favour of big countries, like Germany.
The move, triggered by the swelling of the eurozone to 19 countries with Lithuania’s accession next year, will divide national central bank governors into groups of smaller and larger economies to ensure efficient decision making.
The five largest economies with the biggest financial sectors will share four votes. These are Germany, France, Italy, Spain and the Netherlands. The ECB said on Thursday that Spain would sit out first when the rotation starts in January.
The rotational system means financial markets are likely to focus on meetings when some of the most influential governors, such as Bundesbank chief Jens Weidmann, cannot vote.
Weidmann, the arch-hawk on the ECB Governing Council, will not vote at the May and October meetings next year. In 2016, he will not vote in March and August.
The remaining 14 smaller economies will share 11 votes, but will get to vote less frequently as more countries join the governing council. Here, Estonia, Ireland and Greece will be the first to relinquish their voting rights, the ECB said.
The system was set by the ECB and European Union leaders as far back as 2003, but only from next year could the numbers could get high enough to trigger the change.
The six members of the ECB’s executive board, which implements monetary policy and runs the everyday business, are exempt from the monthly vote rotation and have permanent votes.
These seats have traditionally been occupied by the euro zone heavyweights: Germany, France, Italy and until 2012 Spain. At the moment Portugal, Luxembourg and Belgium are also seated at the top table, but their presence is not set in stone.
The Governing Council comprises the executive board and the national central bank governors.
At meetings when they cannot vote, all governors will continue to participate in the Governing Council’s discussions, the ECB said. [Reuters]