Jens Weidmann, the president of Germany’s central bank, the Bundesbank, might as well go on vacation in May and October, the months this year during which the Bundesbank will have no voice on the governing council of the European Central Bank.
When this new policy became public, many German columnists and economics professors were up in arms over what they characterized as a “regulatory lapse.” They decried it as a “violation of the established business insight that liability and responsibility should go hand in hand,” noting that the “underrepresentation of German interests in this body” would only be exacerbated.
The rotation system for the allocation of voting rights in the ECB governing council, in place since the beginning of the year, is undoubtedly a bizarre and pointless creation. But it doesn’t mean that legitimate German interests are being undermined.
These populist arguments distort our view of what is really needed, namely a drastic reduction in the size of the ECB council.