Why Christine Lagarde’s appointment as President of the European Central Bank is illegal (3)

The EU leaders negotiate intricate compromises based on country preferences, geographic representation, backing from major political parties, and policy concerns throughout the infamously political process of appointing the organization’s senior executives. Nonetheless, the EU continues to be, as the phrase goes, a Union of law, where choices must be taken within a legally agreed-upon framework and with reference to the founding treaties. This applies to both major political choices, like the hiring of high-ranking officials, and technical restrictions pertaining to banana curvature. So what can we learn about the ECB President’s appointment from the EU treaties? Actually, not at all.

Article 283 TFEU lays out the procedure for choosing members of the ECB Executive Board, including the President. The European Parliament and the ECB’s Governing Council are consulted before the European Council, acting by a qualified majority, appoints the Board. However, the Treaties are incredibly vague on the qualifications required for what is effectively one of the most powerful positions in the EU. They only specify two fundamental requirements: according to article 283(2) TFEU, the ECB President shall be chosen “from among persons of recognised standing and professional experience in monetary or banking matters” and shall be a citizen of a Member State.

As a French national, Lagarde satisfies the first requirement without a doubt. It is far less clear whether she satisfies the second, and it will take some careful interpretation of pertinent treaty terms to determine this. To be clear, I have no interest in discussing whether Lagarde is qualified to run the ECB given her background as a politician and lack of experience in central banking. Apart from the sexist undertone of the question (would we really be asking this if Lagarde was a man?), the European Central Bank (ECB) has taken on a very political function, particularly in the wake of the Eurozone crisis. Economics is, after all, far too important to be left to the purview of narrowly minded professional economists.

Why was Lagarde legitimately considered a “person of recognised standing” in light of her conviction in a significant financial criminal case. Finding out what the TFEU defines as “standing” is necessary in order to respond to this question. In English, “standing” typically refers to a person’s reputation, status, or place in society. It is axiologically neutral to stand here.

One’s position might be either excellent or terrible. “Person of recognised standing” in this context may simply refer to an individual with a well-established career in finance, a well-known individual with a substantial amount of professional experience, and skill in areas pertinent to the European Central Bank.

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