ECB voting rights change is democracy, but not quite as we know it
Insecure about the Republic’s reduced voting rights? Get used to it
Graffiti on a fence surrounding the construction site for the new headquarters of the European Central Bank in Frankfurt. Photograph: Reuters/Kai Pfaffenbach
It is democracy at the ECB, but not quite as we know it, or perhaps as we would like it to be. From January, the Republic will be among a group of 14 smaller euro zone states to vote on interest rate decisions less often than a group of five bigger states.
The idea is that as the euro area expands, the ECB needs to maintain some kind of order in how it agrees its key policies, so it can’t let everybody vote all the time. The principle makes sense, as does the fact that it will kick in when Lithuania brings the number of euro zone states to 19 at the start of next year.
What makes sense is not always palatable, however, particularly when you are the one who ends up with the lesser form of a right you previously enjoyed in full.
The ECB makes no pretence about the issue, baldly stating that “euro-area countries are divided into groups according to the size of their economies and their financial sectors”. No prizes then, for guessing that the Republic falls outside the top five states including Germany that will share four votes between them.
Instead, we get to share 11 votes between ourselves and 13 of our pals, including Lithuania. Don’t worry though, the ECB promises that we will still get to speak and be heard at meetings and points out that most decisions are made by consensus anyway. Hmmm – given that holding an actual vote has rarely got us the interest rate the Irish economy has needed, it is hard to see how making a speech might manage it.
Then there is the matter of what happens if and when more countries join the euro. After Lithuania, Romania is due to sign up in 2019, with other states including Croatia, the Czech Republic, Hungary and Poland waiting in the wings. If the total membership exceeds 22, smaller countries will get squeezed even more as member states are divided into three groups with diminishing voting rights.
Feeling monetarily insecure? It might be a good idea to get used to it.