Thank you for your Explanatory Memorandum of 13 May 2003, which Sub-Committee A considered at its meeting on 20 May. The Sub-Committee decided to clear the documents from scrutiny.

  The Sub-Committee accepts that, as the UK has not adopted the euro, the Government do not participate in appointments to the Governing Council of the European Central Bank (ECB) and should not comment on the suitability of individual candidates.

  As you will be aware, however, the Sub-Committee is conducting an inquiry into the ECB and would like to know the Government's views on the current procedure for appointing members of the Governing Council. It would be helpful first of all if you could clearly set out for the Sub-Committee what the Government consider to be the merits and demerits of the current system of appointments to the Executive Board.

  You will recall that one of the questions on the Sub-Committee's Call for Evidence is: What should be the roles of the Commission, the European Council, the European Parliament and national parliaments in appointing the President and the other Members of the Executive Board? In your answer to this broad question, the Sub-Committee would like you to address the following specific issues:  

(a)

The European Parliament claims the right to confirm appointments to the Governing Council in the same manner as the American Senate with the Federal Reserve. Would you support such a move? Do the Government intend to pursue any such amendments in the forthcoming IGC?

(b)

The Parliament considers that it is important to ensure diversity with regards to nominations to the Executive Board. First, it deems it necessary to nominate for the ECB executive board not only central bankers but also persons with economic and monetary expertise recruited from outside the inner circle of central banking. Secondly, it has declared that more needs to be done to correct the current female under-representation on the ECB Board. What steps would the Government like to see taken to ensure these two forms of diversity?

(c)

The Parliament also considers it important to ensure diversity when Member States nominate national central bank governors. What steps are the Government taking to promote such diversity?

  The Sub-Committee looks forward to receiving, in your reply to this letter, the Government's answers to the questions raised here, and, in due course, to reading your full response to the other questions in the Call for Evidence.

20 May 2003

  Thank you for your Explanatory Memorandum on the above document, which Sub-Committee A considered at its meeting on 15 July. The Sub-Committee would like to express their strong support for the recommendation that Mr Trichet should be the next President of the European Central Bank. The Sub-Committee is also very pleased to note that the recommendation is that Mr Trichet should be appointed for the full period of eight years. We trust that this decision reflects the fact that the Ecofin Council has now understood that it is a mistake to have split terms of office for the President and other members of the Executive Board of the ECB. That is certainly the view of the Committee.

16 July 2003

  Thank you for your letter to the Paymaster General of 16 July 2003 regarding Explanatory Memorandum 10893/03 on the Appointment of the President of the European Central Bank (ECB).

  In the context of the views expressed by Sub-Committee A with regard to this issue, may I refer you to the Recommendation adopted by the ECOFIN Council on 15 July 2003. As reported in the press release issued after the Council met in Brussels:

"The Council adopted the Recommendation for the nomination of Mr Trichet as next President of the ECB. In doing so, the procedure for consulting the European Parliament and the ECB has been launched.

The Council Recommendation establishes that Mr Trichet should be appointed President of the ECB as from 1 November 2003 for a period of eight years. This date is in line with the regular procedure, since the European Parliament consultation is expected to take place at the 22-25 September plenary session.

The Governing Council of the ECB is expected to give its opinion before the summer holidays.

The formal appointment will then be made by the Council in the composition of Heads of State or Government in October, either by written procedure, or alternatively, in the margins of the meeting of the European Council.

It is recalled that the Heads of State or Government agreed in Thessaloniki that Jean-Claude Trichet will become the successor to Wim Duisenberg."

22 July 2003