Letter from CEO to Mario Draghi

Dear Mr. Draghi.

I am writing to you on behalf of Corporate Europe Observatory in connection with your new role, following the change of presidents at the European Central Bank.  Our attention was drawn to both your and Jean-Claude Trichet’s membership of ’the Group of Thirty’. We find this membership  deeply concerning and believe it may be  in breach of the Treaty.

As you know, the institution you now lead is supposedly independent from any outside interference. This is stipulated in article 130 of the Treaty that reads: “When exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB and of the ECB, neither the European Central Bank, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body.”

Over the years, this article has been highlighted on several occasions when the ECB has attempted to stave off attempts by member state governments to influence the decisions of the Bank. The now former president of the Bank defended this principle with zeal.

However, as it’s clear from the Treaty, that independence also includes independence from other bodies. And the private financial sector and its representatives are prominent among the bodies that could exert undue influence over the bank. Consequently, the Bank and its president have an obligation to keep an appropriate distance from anything resembling  private financial sector lobby vehicles.

We believe you as president would be negligent, should you decide – as did the former president of the Bank – to retain your membership of ‘the Group of Thirty’.  We give three reasons for this.

Firstly, ‘The Group of Thirty’ is as a joint endeavour of bankers from the public and private sector. Prominent among its members are chief executives and advisors from Morgan Stanley, JP Morgan Chase International and BNP Paribas. When the group presents itself to the public, it is usually Jacob Frenkel from JP Morgan Chase International who acts as its spokesperson. The Group has the characteristics of a lobbying vehicle for private financial interests.

Secondly, it’s clear from the group’s mission statement  that the aim is to influence the debate on regulation of the financial sector worldwide. On more than one occasion, we’ve seen the Group of Thirty come out in support of the objectives of the banking lobby, for instance on Basel II.

Thirdly there’s the opaque nature of the activities of the members. We have no way of knowing the details of your involvement, since the meetings of the members are confidential. Information on what kind of discussions take place, and whether the members commit to certain lines of action is not accessible to the public.

We believe that any president of the Bank has to make it absolutely clear that he or she is not under the influence of the financial lobby at any time. In particular at this dramatic point in the history of the EU, with the eurocrisis and an ailing banking sector –recipients of trillions of euro in aid – it is completely unacceptable if doubt can be cast on the independence from the financial lobby of the Bank’s president.

We therefore strongly urge you to withdraw from the Group of Thirty.

Best regards,

Kenneth Haar

Corporate Europe Observatory

CEO-article on The Group of Thirty: click here