ECB New Voting Plan Gives More Power to Big Economies

The European Central Bank detailed plans on Thursday for changing the way the euro zone governors vote from next year, curbing smaller economies’ potential influence in favor of big countries, like Germany.

The move, triggered by the swelling of the euro zone 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.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza