ECB puts a kitten among the pigeons

The Department of Finance has issued a somewhat cryptic Friday afternoon statement from the Minister concerning the European Central Bank’s legal opinion on his legislation to create a new Central Bank Commission to consolidate the functions of the McCreevy-Harney two-headed hydra that was our former CBFSAI.  Somewhat tellingly, the statement doesn’t provide a link to the ECB opinion (it’s here) and indicates that it’s no big deal. 

Nevertheless –

While it will not be possible to conclude all aspects of this examination in time for the Report Stage of the Bill scheduled for Wednesday 30 June and Thursday 1 July 2010, I will be bringing forward two amendments at Report Stage to take on board some of the main independence-related issues raised in the opinion.  One of these is intended specifically to reinforce the Governor’s sole responsibility for the performance of the Bank’s objectives regarding ESCB-related tasks.  I will consider any further legislative changes that might be appropriate and how they might be implemented in the context of the second Central Bank Reform Bill in the autumn”.

In other words, he’s going to have the Dail pass the legislation without a full ECB sign-off and with a promise to fix anything that’s wrong later.   The ECB had two general issues.  One is that the new legislation is being passed as amendments to existing laws, which makes it impossible for all except those immersed in the legislative details to understand what is being proposed.  They wanted a revamped stand-alone consolidated Central Bank act.  Second, there are the complications in ensuring the independence required by EU treaty of the governor with his multiple roles in the system and his accountability to the Minister for Finance.   These things can of course be sorted out but they point to the messiness of what is essentially an unreformed legislative process.  If it takes the ECB lawyers this much effort to figure out what bills are actually doing, what chance does the average punter have?