Amendment to the European Central Bank Act

Istkalen

PREAMBLE

NOTING that the Constitution of the European Union (henceforth referred to as ?the Constitution?) is the supreme law of the land.

EXPRESSING concern that not all constitutional requirements are being met by the current Office of Economics.

EXPRESSING concern that the monetary policy of the European Union is the euro, and that all supranational transactions are conducted in this currency.

NOTING that there is no place for euros to be printed, despite it being a mandate in the constitution.

This proposal looks to bring into action the European Central Bank.

SECTION I

This Act shall establish the European Central Bank.
The European Central Bank will be located in the ~~Duchy~~ Free City of Europolis
The European Central Bank will be a part of the Office of Economics, as expressed in the Constitution.
The European Central Bank will be held responsible to the Commissioner of Economics and the European Council.
The European Central Bank will be capitalized by the member nations of the European Union at a rate of .001% of GDP in a one-time transaction. The European Central Bank will return the investment at a rate of 5% interest per year.
As such, the European Council will represent the shareholders.

7. Shareholding is restricted to the central banks or, in the absence of a central bank, the highest state-controlled monetary authority, of member-states.

SECTION II.

The European Central Bank will be headed by the President of the European Central Bank (referred to as 'the President').
The President will be elected to his office by members of the shareholders of the European Central Bank every 12 months.

3. The responsibility of initiating an election to the Presidency of the European Central Bank falls on the incumbent President; in their absence, the Internal Affairs Commissioner; in their absence, the Premier Commissioner.

~~3. The President will have the authority to set monetary policy of the Eurozone.~~

4. This includes the ability to define and implement the monetary policy for the Eurozone, to conduct foreign exchange operations, to promote smooth operation of the financial market infrastructure, authorise the issue of euro banknotes and coins by national banks, purchase national bonds.

~~5. The President also has the authority to carry out orders that pertain to the aforementioned duties, known as explicit authority.~~

~~6. The actions of the President of the European Central Bank must be approved by the shareholders of the European Central Bank. The actions must be approved by a simple majority.~~

4. The European Central Bank has the responsibility of maintaining the stability of price levels across Europe, advising and coordinating European monetary policy, and maintaining confidence in and issuing the Euro.

5. The European Central Bank must ensure that the Euro is convertible into all the currencies of the European Union at all times. It may set limits and regulation on conversion as to maintain confidence and the stability of the Euro. Convertibility may be suspended for up to a calendar year if the European Central Bank has insufficient funds, extendable only by act of the European Council.

6. The President of the European Central Bank has the responsibility of carrying out the duties of the European Central Bank itself, and has the authority to issue such orders that pertain to said duties.

7. Actions of the President of the European Central Bank must be approved by the shareholders of the European Central Bank. The actions must be approved by a simple majority.

SECTION III

1. Member-states may petition the European Central Bank to extend a loan or other forms of financial aid as for the purpose of augmenting national foreign-exchange reserves, central bank reserves, preventing in general the collapse of a central bank, or preventing sovereign default.

2. Loan requests are not to be denied except in the following scenarios:

there is a high risk that the provided loan will be mismanaged
the foreign-exchange reserves, other reserves, capital, or ability to pay a loan on verge of default of the requesting member-state are deemed adequate, whichever is appropriate for the request
the European Central Bank does not have the funds necessary to extend the loan
the European Central Bank, while posessing the necessary funds, would be placed into an unstable situation by extending the loan

3. The President of the European Central Bank is tasked with determining whether a loan request is to be denied based upon the criteria set out by this Act. Their decision is subject to approval, by majority vote, by the shareholders of the European Central Bank.

4. If a loan request is approved, it is then the responsibility of the President to, in coordination with the requesting member-state, set an interest rate and schedule for repayment, subject to the approval of the shareholders of the European Central Bank by majority. If financial aid is approved, it is also the responsibility of the President to set an schedule for repayment, subject to the approval of the shareholders of the European Central Bank by majority.

5. Loans for the purpose of augmenting foreign exchange are made in Euros alone, but may be repaid in national currency. Loans for other purposes are to be made and repaid solely in the national currency of the requesting state. Financial aid may come in any form so long as it is approved by a simple majority of shareholders.

6. In the case of a default, or inability to repay according to the developed schedule for repayment financial aid given by the European Central Bank, the European Central Bank is to, alongside the defaulting state, develop a new plan for repayment, with the approval of a majority of shareholders. Austerity may be imposed, but it may only be imposed in such a scenario. In the case that it is decided that austerity be imposed, the plan must be approved by a supermajority of the European Council.

7. Loans may be renegotiated with the approval of the President and a majority of the shareholders of the European Central Bank.

8. The European Central Bank cannot at any time demand economic restructuring of a member-state in return for the extension of a loan except in the scenario described by clause 6.

SECTION IV

1. The European Central Bank will be funded through:

funds provided through the central budget of the European Union
loans that it itself applies for
investment that it itself makes
interest accrued from loans
the issuing of bonds
donations or grants made to it
the initial capital provided through the purchase of shares in it

As promised, I have proposed this amendment, with the exception of the original section IV. The reasons remain the same; to provide to EU member states a stable medium of foreign exchange, and to ensure limitations on the power of the ECB while keeping it effective. Further amendments are invited and encouraged.

Iras Tilkanas
Councillor for the Republic of Istkalen

Spain

Debate begins NOW and will last until 22:08 GMT on September 24th, 2021.

Donald Tusk
Deputy Speaker and Councillor for Spain

Istkalen

As this bill is several months old, as well as because of concerns brought to me privately, I withdraw this legislation from consideration.

Iras Tilkanas
Councillor for the Republic of Istkalen

Spain

This bill has been withdrawn from consideration.

Donald Tusk
Deputy Speaker and Councillor for Spain