Vulcan Insight

European Parliament criticises ECB Executive Board selection process

8 October 2020

Frank Elderson’s candidacy as successor to Luxembourgish Yves Mersch, on the Executive Board of the European Central Bank, was supported by the Eurogroup this week. Mersch’s term will end in December of this year. Elderson is currently an Executive Board Member of the Dutch national bank.

The selection process was controversial and faced criticism from many in the European Parliament for the fact that both candidates proposed were male.

While the Parliament can only issue a non-binding opinion on Elderson’s appointment to the Executive Board, it could block any appointment to the Supervisory Board.

A number of Socialist, Liberal and Green lawmakers have released statements threatening to veto a supervisory appointment on the basis that the list of candidates provided was not in line with the European Parliament Resolution of 14 March 2019 on Gender Balance in EU Economic and Monetary Affairs Nominations.

The Resolution stresses that gender balance on boards and in governments ensures broader competence and wider perspectives, and that the lack of gender balance means institutions risk missing out on potentially excellent candidates.

It also underlines that in the future the Parliament commits itself not to take into account lists of candidates where the gender balance principle has not been respected, alongside the requirements concerning qualifications and experience in the selection process.

Speaking on the subject Luis Garicano MEP and Vice-President of Renew Europe said: “Right now only two of the twenty-five members of the ECB’s Governing Council are women. EU governments continue to perpetuate this unacceptable situation when they insist on defying the Parliament’s wish for gender balanced shortlists.”

In response, President of the Eurogroup Paschal Donohoe said: “My message to those parliamentarians is that I absolutely respect their role in the appointment process but on this particular occasion the member states put forward male candidates and we’ve ended up with a candidate that’s very, very well qualified to serve on the Executive Board of the ECB.”

Donohoe has been vocal about the need for greater diversity, writing in the Irish Times in 2019 that “the task ahead of us is to ensure that the potential business leaders of tomorrow are not side-lined because of their gender” and encouraging those in business and politics to renew their efforts to guard against “the habit of the default male bias”.

In his role as Minister for Finance and Public Expenditure and Reform, Donohoe launched the Balance for Better Business in May 2019. The initiative set a target of 33% females on the boards of the top 20 listed companies and 25% on boards of the smaller lister companies in Ireland by 2023. It also set a target of no all-male boards by the end of 2020.

Having subsequently pledged to improve gender equality for future top EU jobs during his presidency of the Eurogroup, Donohoe was criticised for supporting this nomination process considering that the next board opening is not expected until 2026.

In keeping with Article 283 of the Treaty on the Functioning of the EU, the Council of the European Union is now expected to formally recommend Elderson’s candidacy to the European Council. The European Council will then consult the European Parliament and the ECB Governing Council before formally appointing him to his new role.