Exclusive: ECB annuls Brussels appointment after complaints of favoritism

October 20, 2016 3:27 PM EDT

European Central Bank executive board member Peter Praet attends the 2016 Institute of International Finance (IIF) Spring Membership meeting in Madrid, Spain, May 25, 2016. REUTERS/Susana Vera


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By Francesco Canepa

FRANKFURT (Reuters) - The European Central Bank has annulled the appointment of its new Brussels representative after staff complained Stephane Rottier, an advisor to chief economist Peter Praet, had been handpicked for the job, denying other candidates a chance.

The ECB, which defended Rottier's appointment when news broke last summer that an appeal had been filed against it, told staff on Thursday the decision had been annulled, according to an intranet posting seen by Reuters.

The appeal, filed by staff representatives Carlos Bowles and Johannes Priesemann, also made allegations about favoritism at the ECB.

It cited, among other sources, an internal survey where 65 percent of respondents chose "knowing the 'right people'" as one of the typical ways of getting ahead at the ECB, a higher proportion than any other factor.

The Brussels vacancy had never been advertised and the ECB raised the salary band for the job just two weeks before choosing Rottier on June 21 from a list of previously unsuccessful candidates to other roles.

This meant that Rottier's basic annual salary was between 169,000 euros ($185,000) and 213,000 euros ($233,000).

"The Executive Board decided today to annul its decision in June appointing a new head of the ECB's Brussels office by means of direct appointment from a reserve list," the ECB said in the posting.

"This followed a partially successful special appeal to the Executive Board by members of staff in their personal capacity."

It added Rottier would be the acting head of the Brussels office for six months while a recruitment campaign is launched and a vacancy notice published.

An ECB spokesman would not comment further on the reasons for the annulment. Rottier did not immediately respond to Reuters' requests for comment

"It is a very good signal that the ECB decided to annul this appointment, that was not in line with a merit-based-recruitment process," appellant Carlos Bowles said.

"Now the next step would be to change our recruitment process so that personal ties and favoritism are not allowed to play a role in promotions."

One of the points made in the appeal is that staff rules dictate that a selection procedure, rather than direct appointment, must be used to choose candidates for positions that have been 'upgraded'.

The ECB said at the time of Rottier's appointment that the salary for the job had been raised due to the "increasing role played by the ECB during and after the financial crisis and the additional responsibilities attributed to the ECB in the context of the progress towards banking union".

Rottier had unsuccessfully applied for the job of ECB representative in Washington.

His profile on networking site LinkedIn showed on Thursday he had taken over as the head of the Brussels office in September after working for Praet for almost four years.

He had previously served in other roles as a counselor to the ECB's Executive Board since 2011, after moving from the National Bank of Belgium.

A study cited in the appeal and conducted by research firm CESiFO in 2011 found nationality was relevant in hiring and decision-making at the ECB, highlighting "the existence of national networks between adjacent management layers".

(Editing by Richard Balmforth)



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