Is the European Central Bank going soft? Some hard-money types, including Axel Weber, think so. They consider the central bank’s support of troubled eurozone members a dangerous deviation from the old anti-inflation hard line of the Bundesbank, the institution that
Mr Weber now leads.

The ECB’s one country, one vote governing structure creates the perception of Club Med dominance. In the 22-person governing council, eight of the 16 national representatives and four of the six bank staff members come from lands with coastlines on or very near the Mediterranean. Ireland is now an honorary southerner.

But contrary to appearances, this institutional framework pushes the ECB towards behaving like a second Bundesbank. Its staff members are all influenced by Frankfurt’s rigorous monetary culture. Meanwhile, one country, one vote wildly over-represents prudent nations. Using an index of prudence based on recent deficits and the ratio of total debt to gross domestic product, there are nine prudent nations that jointly account for only 40 per cent of the eurozone’s gross domestic product. But thanks to three small but prudent Mediterranean nations – Cyprus, Malta and Slovenia, which jointly account for 0.6 per cent of eurozone GDP – the prudence bloc controls 56.3 per cent (nine out of 16) of the national represntiatives.

The imprudent minority includes France, never fully persuaded by the Bundesbank’s rigour, and all the peripheral countries that face a struggle for market funding. Their pleas have been heard.

And even the old Buba was sometimes political. In 1990 it succumbed to political pressure on the issue of the exchange rate needed during German reunification and flooded the new nation with cash. Similar pragmatism now may lead the ECB to elevate eurozone unity above the purity of policy. So even if Mr Weber becomes the next ECB president, anti-bail-out types are likely to be disappointed. And not because of a rigged council.

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