Germany Demands More Power Over ECB

Germany wants more control over the eurozone’s new banking supervisor, set to be run by the European Central Bank (ecb).

Currently, each nation has one vote on the ecb’s board, meaning Germany can be easily overruled. Germany controls other key leavers of the eurozone economy, meaning its demands can’t be ignored. But a banking authority organized with the same structure as the ecb would put Germany in another position where it lacks the formal power to stop proposals it doesn’t like.

Instead, Germany wants a nation’s votes to be weighed according to the size of its banking sector—giving Germany one of the largest votes on the board. The Financial Times (FT) reported October 9 that Germany raised the idea in private talks with EU officials.

The idea “touches on some of the founding principles of the single currency and is likely to rile smaller eurozone countries fearful of Germany’s growing willingness to flex its muscles,” it writes.

“The boost in influence would give Germany and other states with big financial sectors a much better handle on the supervision work of the ecb—extra clout that EU officials fear could hamper its independence,” the FT continues.

Germany is also pushing for the board to appoint its own leaders, removing more power from the general ecb board, where Germany has just one vote.

Continue to watch for Germany to push for greater control over EU institutions. It’s already powerful behind the scenes. Now, it’s increasingly using that power to give itself greater formal control.