2003/223/EC: Decision of the Council, meeting in the composition of the Heads of State or Government of 21 March 2003 on an amendment to Article 10.2 of the Statute of the European System of Central Banks and of the European Central Bank
Date: 2003-03-21
Institutions: Council of the European Union
Subjects: European Central Bank, European System of Central Banks, central bank, decision-making body (EU), vote

L 83/66

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Official Journal of the European Union

1.4.2003

II

(Acts whose publication is not obligatory)

COUNCIL

DECISION OF THE COUNCIL, MEETING IN THE COMPOSITION OF THE HEADS OF STATE OR
GOVERNMENT

on an amendment to Article 10.2 of the Statute of the European System of Central Banks and of
the European Central Bank

of 21 March 2003

THE COUNCIL MEETING IN THE COMPOSITION OF THE HEADS OF
STATE OR GOVERNMENT,

(2)

(2003/223/EC)

Having regard to the Statute of the European System of Central
Banks and of the European Central Bank (1), and in particular
to Article 10.6 thereof,

Having regard to the recommendation from the European
Central Bank (2),

Having regard to the opinion of the European Parliament (3),

Having regard to the opinion of the Commission (4),

Whereas:

(1)

The enlargement of the euro area will lead to an increase
in the number of members of the Governing Council of
the European Central Bank (ECB). There is a need to
maintain the Governing Council's capacity for efficient
and timely decision-making in an enlarged euro area,
irrespective of the number of Member States that adopt
the euro. In order to do so, the number of governors
having voting rights will have to be smaller than the
overall number of governors in the Governing Council.
A rotation system is an equitable, efficient and accep-
table way of assigning voting rights among the gover-
nors in the Governing Council. A number of 15 voting
rights for the governors strikes an appropriate balance
between, on the one hand, continuity with the existing
set-up including a balanced assignment of voting rights
between the six members of the Executive Board and the
other members of the Governing Council and, on the
other hand, the need to ensure efficient decision-making
in a substantially enlarged Governing Council.

(1) Statute laid down by the Protocol annexed to the Treaty establishing

the European Community, as amended by the Treaty of Nice.

(2) OJ C 29, 7.2.2003, p. 6.
(3) Opinion delivered on 13 March 2003 (not yet published in the Offi-

cial Journal).

(4) Opinion delivered on 21 February 2003 (not yet published in the

Official Journal).

(3)

(4)

In view of their appointment at European level by a
Treaty procedure and their role at the ECB, the compe-
tence of which spans the whole euro area, each member
of the Executive Board has to maintain a permanent
voting right in the Governing Council.

The voting modalities in the Governing Council are
adjusted on the basis of Article 10.6 of the Statute. As
this Article only concerns amendments to Article 10.2
of the Statute, any adjustment of the voting modalities
has no implications for voting on decisions taken in
accordance with Articles 10.3, 10.6 and 41.2 of the
Statute.

Five fundamental principles are reflected in the constitu-
tive elements of the chosen rotation system. The ‘one
member, one vote’ principle, which is the Governing
Council's core decision-making principle, continues to
apply to all members of the Governing Council having a
voting right. All members of the Governing Council
continue to participate in its meetings in a personal and
independent capacity, irrespective of whether they have
a voting right or not. The rotation system is robust in
the sense that it is able to accommodate any euro area
enlargements up to the currently envisaged maximum
the rotation
number of Member States. Moreover,
system avoids producing situations
in which those
governors having a voting right are from the national
central banks (NCBs) of Member States which,
taken
together, are perceived as unrepresentative of the euro
area economy as a whole. Finally, the rotation system is
transparent.

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(5)

(6)

The allocation of governors to groups and the assign-
ment of specific numbers of voting rights to these
groups are designed to ensure that
those governors
having a voting right are from the NCBs of Member
States which, taken together, are representative of the
euro area economy as a whole. Governors will exercise
their voting right with different frequencies depending
on the relative size of
their NCB's Member State's
economy within the euro area. The allocation of gover-
nors to groups is thus dependent on a ranking of their
NCB's Member State based on an indicator with two
components: the size of the share of their NCB's Member
in the aggregate gross domestic product at
State (i)
market prices (hereinafter GDP mp) of
the Member
States which have adopted the euro; and (ii) in the total
aggregated balance sheet of the monetary financial insti-
tutions (hereinafter TABS-MFIs) of the Member States
which have adopted the euro. The economic weight of a
Member State as reflected in its GDP mp is an appro-
priate component as the impact of central bank deci-
sions is greater in Member States with larger economies
than in those with smaller economies. At the same time,
the size of a Member State's financial sector also has a
particular relevance for central bank decisions, since the
counterparties of central bank operations belong to this
sector. A 5/6 weight is attributed to GDP mp and a 1/6
weight to TABS-MFIs. This choice of weights is suitable,
as this will mean that the financial sector is sufficiently
and meaningfully represented.

In order to provide for the smooth introduction of the
rotation system,
its establishment takes place in two
stages. In the first stage the governors will be allocated
to two groups as soon as their number exceeds 15. The
frequency of voting rights of the governors allocated to
the first group will not be lower than the frequency of
voting rights of those of the second group. When a
significant number of new Member States have entered
the euro area, i.e. the number of governors exceeds 21,
they will be allocated to three groups. Within each
group governors have a voting right for equal amounts
of time. The detailed implementing provisions regarding
the two principles as well as any possible decision to
postpone the start of the rotation system so as to avoid
the situation that governors within any group have a
voting frequency of 100 % are to be adopted by the
Governing Council, acting by a two-thirds majority of all
its members, with and without a voting right.

(7)

The shares of each NCB's Member State in the aggregate
GDP mp and in the TABS-MFIs of the Member States
which have adopted the euro are to be adjusted when-

ever the aggregate GDP mp is adjusted in accordance
with Article 29.3 of the Statute or whenever the number
of governors in the Governing Council
increases. The
new shares resulting from the regular adjustments will
apply as from the first day of the following year. Upon
the
one or more governors becoming members of
Governing Council, the reference periods to be used to
calculate the shares of their respective NCB's Member
State in the aggregate GDP mp and in the TABS-MFI of
the Member States which have adopted the euro should
be identical to those used for the latest quinquennial
adjustment of the shares. The new shares resulting from
such non-regular adjustments will apply as from the day
on which the governor(s) join(s) the Governing Council.
These operational details are part of the implementing
provisions to be adopted by the Governing Council,

HAS DECIDED AS FOLLOWS:

Article 1

The Statute of the European System of Central Banks and of
the European Central Bank is hereby amended as follows:

Article 10.2 of the Statute shall be replaced by the following:

Each member of

‘(10.2)
the Governing Council shall
have one vote. As from the date on which the number of
members of
the Governing Council exceeds 21, each
member of the Executive Board shall have one vote and the
number of governors with a voting right shall be 15. The
latter voting rights shall be assigned and shall rotate as
follows:

the share of

institutions of

the monetary financial

— as from the date on which the number of governors
exceeds 15, until it reaches 22, the governors shall be
allocated to two groups, according to a ranking of the
their national central bank's
size of
Member State in the aggregate gross domestic product
at market prices and in the total aggregated balance
sheet of
the
Member States which have adopted the euro. The
shares in the aggregate gross domestic product at
market prices and in the total aggregated balance sheet
of the monetary financial institutions shall be assigned
weights of 5/6 and 1/6, respectively. The first group shall
be composed of five governors and the second group
of the remaining governors. The frequency of voting
rights of the governors allocated to the first group shall
not be lower than the frequency of voting rights of
those of the second group. Subject to the previous
sentence, the first group shall be assigned four voting
rights and the second group eleven voting rights;

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— as from the date on which the number of governors
reaches 22, the governors shall be allocated to three
groups according to a ranking based on the above
criteria. The first group shall be composed of
five
governors and shall be assigned four voting rights. The
second group shall be composed of half of the total
number of governors, with any fraction rounded up to
the nearest integer, and shall be assigned eight voting
rights. The third group shall be composed of
the
remaining governors and shall be assigned three voting
rights;

— within each group,

the governors shall have their

voting rights for equal amounts of time;

— for the calculation of the shares in the aggregate gross
domestic product at market prices Article 29.2 shall
apply. The total aggregated balance sheet of the mone-
tary financial institutions shall be calculated in accor-
dance with the statistical framework applying in the
European Community at the time of the calculation;

— whenever

the aggregate gross domestic product at
market prices is adjusted in accordance with Article
29.3, or whenever the number of governors increases,
the size and/or composition of the groups shall be
adjusted in accordance with the above principles;

— the Governing Council, acting by a two-thirds majority
of all
its members, with and without a voting right,
shall take all measures necessary for the implementation
of the above principles and may decide to postpone the
start of the rotation system until the date on which the
number of governors exceeds 18.

The right to vote shall be exercised in person. By way of
derogation from this rule, the Rules of Procedure referred
to in Article 12.3 may lay down that members of the
Governing Council may cast their vote by means of tele-
conferencing. These rules shall also provide that a member
of the Governing Council who is prevented from attending

meetings of the Governing Council for a prolonged period
may appoint an alternate as a member of the Governing
Council.

the previous paragraphs are without
The provisions of
the
prejudice to the voting rights of all members of
Governing Council, with and without a voting right, under
Articles 10.3, 10.6 and 41.2.

Save as otherwise provided for
the
Governing Council shall act by a simple majority of the
members having a voting right. In the event of a tie, the
President shall have the casting vote.

in this Statute,

In order for the Governing Council to vote, there shall be a
quorum of two-thirds of the members having a voting
right. If the quorum is not met, the President may convene
an extraordinary meeting at which decisions may be taken
without regard to the quorum.’

Article 2

1.
This Decision shall be ratified by all Member States in
accordance with their respective constitutional requirements.
The instruments of ratification shall be deposited with the
Government of the Italian Republic.

2.
This Decision shall enter into force on the first day of the
second month following that in which the instrument of ratifi-
cation is deposited by the last signatory Member State to fulfil
that formality.

Done at Brussels, 21 March 2003.

For the Council, meeting in the composition of
the Heads of State or Government

The President

C. SIMITIS