Banco de Portugal's participation in the capital of the ECB declined – The Economic Journal

Banco de Portugal's participation in the capital of the ECB declined - The Economic Journal

The European Central Bank (ECB) today published a new capital key, which reduces the participation of the Bank of Portugal, according to a statement published on the institution's website.

Thus, from January 2019, Portugal will have a 1.6367% stake in the ECB's capital, compared to 1.7434% that it has until December 31 of this year. That is, in absolute value, the participation of Banco de Portugal will be worth 177,172,890.71 euros.

As a result of these changes, 12 national central banks have reduced their participation in the ECB and 16 have risen, with the southern European countries being the most penalized. France and Germany gain weight.

This capital key is used in the calculations of debt purchase programs, in which Portugal has participated.

The European institution justifies this new key with demographic changes in each country and with the GDP of the European Union (EU).

The ECB explains that the position of each central bank is calculated according to "the total population of each Member State and the EU Gross Domestic Product in equal measure".

These calculations are based on data provided by the European Commission, with central banks now having to transfer capital among themselves "to ensure that the distribution of shares corresponds to the adjusted key," the ECB notes.

According to the institution, the total subscribed capital remains the same at EUR 10,825,007,069.61, and this decision will now be published in the Official Journal of the European Union.

The ECB's rotating voting system, using the central bank governors of each country, will remain the same.

These changes occur every five years.

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