Before it is decided who will chair the governing council for the next eight years, the authors look back and examine precisely how decisions have been taken since the ECB was created – by unanimity, by majority, or by consensus.
Given the peculiar multi-country nature of the Eurosystem, taking monetary policy decisions by unanimity, or at least by consensus, was considered a priority by the founder members of the governing council of the ECB to ensure that the new central bank would be seen as speaking with one ‘supra-national’ voice.
That is why ECB President Duisenberg declared in July 2002 that “the Governing Council’s decisions are decisions by a collegiate body and that every individual member of that body will defend and describe the outcome of certain discussions as if he had been 100% enthusiastic about those decisions. They will be supported by the entire Governing Council.”
During his appointment procedure in September 2003, asked by the members of the European Parliament about the objectives that he would pursue during his mandate as president of the ECB, Jean-Claude Trichet also identified “collegial decision-making” as one of the three essential principles that would guide his presidency, and added that “the President is the head of a team, and not a single player. The Executive Board is a team. The governing council is a team. And the success of the ECB, and that of the Eurosystem, can only be achieved through teamwork”.
However, faced with critical crises and major challenges in the second decade of its existence, the ECB’s governing council, and its president, recognised that reaching unanimity or even a consensus on every decision was not the utmost priority (and was probably too difficult to achieve given the circumstances) and that decisions could be taken by simple majority if needed.
This highlighted the important trade-off between having all, or at least most, of the members of the governing council on board when taking decisions – in order to be able to speak with one voice (and also in fine to avoid creating tensions between member states and resentment towards the ECB) – and making timely optimal decisions for the euro area as a whole.
The next president of the ECB, like his predecessors before him, will have the difficult task of dealing with that key trade-off and finding the right balance between these two concerns. Before the choice on who will chair the governing council during the next eight years is made, it is thus interesting to look back and examine precisely how decisions have been taken since the ECB was created. This is what we investigate in this blog post.