Thursday

22nd Feb 2024

France and Germany divided over new ECB status

The status of the European Central Bank (ECB) in the new EU treaty is causing friction between France and Germany.

France is pushing to have the bank written into the new treaty as one of the Union's institutions - on an equal footing with other EU bodies such as the European Commission or the European Parliament.

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  • Mr Sarkozy and Ms Merkel do not see eye to eye on the ECB (Photo: © Council of the European Union, 2000-2005)

This would make the bank more of a political institution subject to influence from national member states.

The rejected EU constitution gave the bank a special institutional status, taking into account its need for independence.

But this change was not carried over to the EU's proposed Reform Treaty, which member states are currently finalising.

Germany – the biggest defender of the bank's independence – is in favour of reintroducing the special status for the bank, according to French daily Le Monde.

ECB head Jean-Claude Trichet has also been lobbying to secure the bank's status. Over the summer he sent a letter to the EU presidency Portugal reminding it of the importance of the clause.

"Because of its specific institutional features, the ECB needs to be differentiated from the union's institutions," he wrote at the time.

The behind-the-scenes tussle is the latest in a series of spats between Berlin and Paris over the bank since French president Nicolas Sarkozy came to power before the summer.

Mr Sarkozy has repeatedly criticised the institution for its anti-inflation policy saying that the growth of the euro is hurting French exporters.

German chancellor Angela Merkel however has been equally tough in her defence of the independence of the bank.

The EU treaty negotiations are currently taking place at a technical level as legal experts finetune the political agreement reached by member states in June.

Governments are hoping to have agreement on the treaty by a summit later this month (18-19 October) and the document signed in December.

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