In March, the EU-funded project for central banks and banking supervisory institutions in the six Western Balkan states was launched. The European Commission is providing €2 million for the project, which will run for 24 months. Besides the Bundesbank, 19 ESCB central banks and the ECB are involved. Martin Dinkelborg, you are the responsible project manager. How did the Bundesbank come to assume the leading role in this project?

In 2016, the Bundesbank took over the chairmanship and the secretariat of the Task Force on Central Bank Cooperation from the ECB. This also involved the question of who should take over the projects following on from the major ESCB projects of the early 2000s. Again, the Bundesbank said it would be happy to and additionally assumed the chairmanship of the Programme Steering Committee, which was responsible for preparing the Western Balkans project. Besides the Bundesbank, this committee was made up of the central banks of France, Italy, Poland and Austria as well as the ECB, in the role of observer. We then used the planning meetings prescribed in the statutes, which took place in the various capitals, to develop the project together.

How long did the planning process take?

Planning began in 2016 when we assumed the chairmanship of the Task Force and continued until the project was launched in Vienna at the end of March 2019. The preparatory work consequently took not quite three years. At first glance, that seems long, but it is actually at the lower end of the norm, mainly because of the overlapping planning processes especially at EU and ESCB level. As it was the first project of this nature for us, we laid great store by careful preparation.

How large was the willingness of ESCB central banks to take part in the project?

Their willingness grew continuously as project planning progressed. At the beginning, members of the Steering Committee, in particular, declared their willingness to participate in the project, as was to be expected. As plans progressed, the circle of involved central banks expanded very rapidly. In the end, we were even joined by two “latecomers”. As a result, 20 ESCB central banks will now work on the project together.

How many institutions in the Western Balkans will receive assistance?

Eight institutions will receive assistance, namely the six central banks of the Western Balkan states and the two banking supervisory authorities in Bosnia and Herzegovina. The Dayton Agreement means that government structures are completely different in this country than in the other countries in this region; as a result, it makes sense to include these institutions from a functional perspective.

What exactly are the aims of the programme?

The programme has a rather clunky title: “Strengthening the Central Bank Capacities in the Western Balkans with a View to the Integration to the European System of Central Banks”. Ultimately, the aim is to ensure central banks are "state of the art" all the while respecting their individual requirements. The subject field is very broad and ranges from banking supervision through payment system issues to questions relating to possible EU integration.

What concrete form does assistance take?

The project has four major elements, the first consisting of joint training sessions for all six Western Balkan states in various western European capitals. The second stage comprises bilateral onsite measures resulting from these training events. In addition, two high-level policy workshops and internships are planned.

What were the largest hurdles before the project could get started?

Designing the project was pretty complicated, overall. The largest hurdles were setting up administrative structures and developing a secure legal basis. The cooperation with so many ESCB central banks proved surprisingly unproblematic. Substantive questions were quickly settled, and the willingness to get involved was very great, as I just mentioned. However, many elements of project development were out of our control as they lay with the European Commission, which has its own planning processes and deadlines, meaning that we had to wait.

Was cooperation with the European Commission smooth otherwise?

To say it was smooth is actually an understatement. Cooperation with our colleagues at the European Commission was excellent from the outset. We always tried to solve problems rather than create new ones. If everywhere in Europe worked as smoothly as in this project, we would not need to worry about its future.

What challenges lie ahead?

The largest challenge is to conclude the project as per the contract and in line with the ideas of the recipient institutions. The problem I see and that was quietly mentioned at the last Steering Committee meeting is that the project might work “too well”. The European Commission has already approached us and asked whether we would be interested in a further project for a different circle of central banks. That would be something to consider for the medium term, however. But the query itself clearly demonstrates that the European Commission’s response to the project is also very positive.

Questions were asked by Silke Schrupp