MEPs renew bid to check ECB’s powers

Date: 12/11/1998

By Tim Jones

MEPS are stepping up their campaign to make the European Central Bank accountable to elected politicians.

Following last week's agreement between the monetary policy oversight committees of national parliaments and that of the European Parliament to create a joint accountability forum, prominent Euro MPs are pressing for early 'dialogue' with ECB President Wim Duisenberg.

British Socialist MEP Ken Collins, the chairman of the Parliament's environment committee, has also tabled a proposal to reform the committee structure.

Under his plan, the economic and monetary affairs panel would specialise in industrial and single market issues and the monetary subcommittee would become a monetary policy and banking panel.

Collins' insistence on the need for reform is echoed by James Elles, a leading British Conservative on the budget committee, which recently allocated funds to the drive to improve ECB accountability.

"I have just been to the States and when you tell people over there that the people dealing with Duisenberg and so on are not even a fully-fledged committee but a subcommittee of the Parliament, they can't believe it," he said.

But parliamentarians say the elevation of the subcommittee to the status of a full panel is being held back by the hiatus created by the run-up to next summer's Euro-elections.

Certain MEPs are nevertheless already jockeying for position in the race to chair the new committee, should the German Social Democrats not fare as well in next June's poll as they did in this autumn's general election. The current president of the subcommittee is German Social Democrat Christa Randzio-Plath.

However, some Euro MPs fear that waiting until next autumn to tighten up their procedures could give the ECB a head start from which Parliament would never recover.

Some members of the subcommittee are pressing for the formation of a specialised group within the secretariat of the economic affairs committee to monitor the work of the bank full-time.

This radical plan is designed to redress some of the imbalance between Parliament and the central bank. Existing economists on the committee's payroll and the Parliament's research staff would be used, and some MEPs have also proposed seeking officials who could be seconded from national administrations.

With this firepower, the subcommittee would appoint one staffer to monitor economic performance in two member states each and all would work together on scrutinising the bank.

They would keep close tabs on ongoing unpublished work by national institutes and report back on this to MEPs on the subcommittee, with institutes which have already offered their services asked to work on specific areas of policy.

However, the proposal for the special unit still has to be approved by Parliament Secretary-General Julian Priestly. In the meantime, MEPs are hoping to make steady improvements in their oversight of the bank.

A group of 13 MEPs paid its first visit to the six-member executive board of the bank in Frankfurt late last month and tried to pin down Duisenberg and ECB chief economist Otmar Issing on how much material they would make available to the subcommittee.

In particular, Dutch Socialist Alman Metten wanted to see the research papers prepared for Issing by his staff on the problems facing the bank in defining a target for money supply growth in the euro-zone.

Issing promised them a detailed breakdown of the debate within the bank over monetary targeting when the ECB's first quarterly report is published in January.

But he insisted that he could say nothing now, arguing that since he had asked his economists to "think the unthinkable", it would be wrong to release their papers.

"This kind of issue is precisely when there should be a dialogue between the ECB and the Parliament," said Metten. "We don't want to see just the data they used to get to a decision, but also the information they raised and then discarded."

Last week, the monetary subcommittee and its counterparts from 15 national parliaments agreed to meet twice a year to prepare for Duisenberg's appearances before the Parliament.