Shortly after the EU’s Court of Auditors criticised the ECB’s lack of transparency vis-à-vis public auditors, the ECB is again in democratic deep water. The EU Ombudsman has now responded to a complaint from the non-governmental organisation Corporate Europe Observatory and demands that ECB president Mario Draghi leaves the controversial financial association G30.
Following a year-long complaint-based inquiry, the European Ombudsman, Emily O’Reilly, has recommended that ECB President Mario Draghi suspend his membership of the Group of 30 (G30) for the remainder of his term in office in order to protect the Bank and its President from any perception that the Bank’s independence could be compromised. The Ombudsman has also recommended that future presidents of the ECB do not become members of the G30.
The G30 is a Washington DC based private group whose members consist of a number of central bank governors, private sector bankers and academics. Membership is by invitation only. Among the members are representatives of banks supervised, directly or indirectly, by the ECB. Among the members are heads of major private banks and central banks, as well as members from academia and international institutions. Current members of the group include current and former heads of the central banks of Argentina, Brazil, Great Britain, Canada, China, France, Germany, India, Israel, Italy, Japan, Mexico, Poland, Singapore, Spain, and Switzerland, as well as two chairmen of the Federal Reserve Bank of New York, and two presidents of the European Central Bank, among which Draghi.
Sven Giegold, spokesman for the Greens in the Committee on Economic and Monetary Affairs (ECON) commented:
“Mario Draghi must now draw the consequences. It is high time for the ECB President to leave the G30. The ECB’s independence is at risk if Mario Draghi continues to be a permanent member of non-transparent forums with the leaders of the global financial business.”
“The ECB must now take the criticism of lack of transparency and conflicts of interest by EU authorities seriously. The EU Court of Auditors has a right of access to all relevant documents. The Ombudsman’s criticism deserves a quick response. The ECB should now comprehensively improve its own rules for greater transparency and integrity, rather than waiting for the next slap in the face.”
The Ombudsman said that the ECB can legitimately continue to participate in certain public activities of the G30 but in the interests of maintaining the public’s trust in the Bank she has outlined how this participation should be managed. This includes making public the agendas and summaries of the discussions in the meetings.
“The ECB has failed to show how the public interest in stakeholder engagement could be damaged by the President of the ECB not being a member of the G30, as opposed to being a participant at some of its meetings, like, for example, Janet Yellen of the US Federal Reserve. My recommendations would bring the relationship between the ECB and the G30 in alignment with certain of the Bank’s own governance rules and codes,” said Emily O’Reilly.