The expiration of ECB Vice-President Vítor Constancio's term in June and the subsequent appointment of Luis de Guindos as his successor marked the beginning of the European Central Bank’s senior management renewal. But, how are ECB executive board members appointed?
The three pillars of the European Central Bank’s structure are the Executive Board, the Governing Council and the General Council. The Executive Board consists of the President, the Vice-President and four other members. All members are appointed for a non-renewable 8-year term.
Currently, the Chairs of the ECB’s Executive Board are occupied by Mario Draghi (President); Luis de Guindos (Vice-president), Benoît Coeuré; Sabine Lautenschläger; Yves Mersch and Peter Praet. They all meet at least once a week to decide how to implement the monetary policy, prepare the Governing Council meetings and manage the day-to-day business of the ECB.
To date, three Spaniards have been appointed members of the Executive Board. Eugenio Domingo Solans, during the first stage of the ECB between 1998 and 2004; José Manuel González-Páramo, Executive Member of the Board, Head of Global Economics, Regulation and Public Affairs at BBVA, and member of the ECB Governing Council from 2004 to 2012; and Luis de Guindos, vice-president of the ECB since the past June 1.
The members of the Executive Board are also members of the Governing Council of the Bank, the ECB's main governing body. This body also comprises the governors of the National Central Banks of the euro area countries. As a general rule, the members of this Governing Council meet twice a month at the ECB’s headquarters in Frankfurt. Every six weeks, the institution publishes an assessment on economic and monetary trends and adopts monetary policy decisions.
The third essential organ in the ECB’s organization chart is the General Council. This council comprises the President and Vice-President of the European, as well as the governors of the national central banks of all members states of the EU (19 of the euro area and 9 of other EU countries). According to the European Central Bank itself, the General Council can be defined as a “transitory body”, as not all EU members have adopted the euro yet. According to ECB statutes, this organ will be dissolved once all EU Member States have introduced the single currency.
A key date in the ECB’s renovation will be October 31, 2019, when Mario Draghi’s term is set to expire. Draghi has led the institution during the most critical moments of the economic crisis. The successor of the Italian economist will still face huge challenges, including the normalization of interest rates within the euro area and the completion of the banking union.
The ECB president’s appointment depends on the European Council, and must be ratified by a qualified majority. According to EU rules, the ministers of Economy and Finance of the EU must choose “from among persons of recognised standing and professional experience in monetary or banking matters.” Also, the candidacy must be preceded by a consultation with the European Parliament and the ECB Governing Council, and the recommendation of the EU Council.