Business

Ireland’s push to shore up share of ECB staff triggers call for nationality quotas

Union hits out at warning by bank’s chief economist that retirement wave risks diluting Ireland’s presence

Philip Lane, chief economist of the European Central Bank (ECB). Photograph: Paulo Nunes dos Santos/Bloomberg

Martin Arnold
Mon May 20 2024 - 08:07

The European Central Bank is facing union calls to introduce nationality quotas for recruitment after an Irish member of the bank’s executive board urged Dublin to preserve his country’s outsized presence among the bank’s staff.

Union representatives wrote to the ECB board to raise concerns after chief economist Philip Lane warned a minister in Ireland’s government that the country risked its share of bank employees being diluted.

He said few of his countrymen were applying to join the ECB and many — including Lane himself — would retire over the next decade.

The staff committee’s letter, seen by the Financial Times, said: “It is very disturbing to see that a member of the executive board is not aiming at achieving an overall balanced representation of nationalities within the ECB, but only at having the representativeness of his own country/government addressed.”

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ECB employees are supposed to put their national interests aside when they join the Frankfurt-based central bank, but the issue of whether some countries are over-represented still raises political hackles.

The staff committee said: “The role played by nationality in hiring and promotions should be monitored and made transparent via adequate statistics.”

It called for a “system identifying a threshold under which specific efforts must be made to hire and promote certain nationalities”. This would “ensure a suitable balance of nationalities”, it said. A similar system was already in place at the European Commission, it added.

However, the ECB is expected to reject the committee’s request. “We have no nationality quotas,” the bank said. “We hire colleagues based on their abilities and merit.”

The ECB’s recruitment plans are attracting attention because about 500 of its roughly 5,100 employees are due to retire in the next decade, opening a window to rebalance nationalities.

Germans make up the largest share of ECB staff, accounting for almost a quarter of the total and nearly a third of managers. The proportion is larger than Germany’s 21 per cent share of ECB capital, which is based on the size of a country’s economy and population.

The numbers, which sometimes fuel suspicion that Germany has greater sway over the ECB, are partly a reflection of greater local recruitment by the Frankfurt-based bank, officials said.

Irish staff make up 3.3 per cent of the total and 3.7 per cent of managers — well above Ireland’s 1.8 per cent share of ECB capital.

Neale Richmond, Ireland’s minister with responsibility for financial services, said after meeting Lane in Frankfurt earlier this month that the ECB chief economist had flagged the importance of encouraging more Irish people to apply for jobs at the bank to maintain numbers as others retired.

“Philip made the point quite clearly: it is important for Irish ministers and officials to have counterparts in the ECB to pick up the phone to,” Richmond told the Business Post. “He wasn’t concerned as such, but he was very keen to make sure that we work in tandem to encourage people to work there.”

Richmond said he would seek to ensure more Irish people applied for ECB posts. He said Ireland had a “unique position”, with its citizens holding several senior posts in European institutions, including Lane at the ECB, Paschal Donohoe as Eurogroup president and Mairead McGuinness as EU commissioner for financial services.

Several countries bailed out during the Eurozone debt crisis a decade ago have an outsize staff presence at the ECB relative to their share of its capital, including Greece and Portugal, as well as Ireland.

The ECB said Lane regularly encouraged people of all nationalities to apply for jobs at the bank, as he did while delivering a lecture in March at the Aix-Marseille School of Economics in France.

The central bank has a number of diversity and inclusion policies and takes gender and nationality diversity into account when deciding between people with equivalent qualifications for a job. – Copyright The Financial Times Limited 2024

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