The European Central Bank has been much criticised for the opacity of its deliberations. However, over the past year or two a picture has emerged of how it goes about its business.

The 18-member governing council - six executive board members based in Frankfurt, plus the heads of the eurozone's 12 national central banks - meets twice a month. In the early days, it was making monetary policy pronouncements after all these meetings, but this proved too much for financial markets to digest. Last November the council decided it would confine monetary policy discussions to its first meeting each month.

Two days before a scheduled meeting on monetary policy, members receive an analysis of economic and monetary conditions, known as the "orange book", which is prepared by Otmar Issing, the ECB's chief economist, and his team of about 150 researchers and economists. This comes with a recommendation on interest rates.

Those close to the council say that members often have informal contacts, for example by telephone or at dinner the evening before a council meeting, to sound each other out.

During a monetary policy meeting, those present are limited to the 18 council members, a minute-taker, translators (although English is the informal common language) and, if they attend, the European commissioner for economic and monetary affairs, now Pedro Solbes of Spain, and the chairman of the 12-strong "eurogroup" of eurozone finance ministers, now Didier Reynders of Belgium.

The session usually takes up the whole of a Thursday morning. It starts with a concise presentation by Mr Issing of the eurozone's economic outlook. Members then take turns to make their comments.

"Everyone speaks," says one official. "Some normally speak less than others. Some put forward their views without giving particular explanations. Some argue and provide explanations. But there is always a first round in which everyone says something."

Whether this format increases Mr Issing's ability to stamp the council with the mould of his opinions is open to question. It is known that some smaller national central banks feel the ECB headquarters is disinclined to place its trust in economic judgments made in the eurozone's periphery.

It falls to Wim Duisenberg, the ECB president, to summarise the discussion. If he deems there is a majority large enough for a decision - which could be, but is not necessarily, an interest rate change - he proposes that the council take the move by consensus.

ECB officials contend that the search for consensus does not delay decision-making. Hard evidence to the contrary is difficult to uncover, since the ECB neither publishes official minutes nor makes any reference to conflicting views among council members in its monthly press statement.

But many experts believe the apparent slowness with which the ECB cut rates this year in response to the economic slowdown reflected differences within the council. "The main reason is that the executive board, on the basis of the chief economist's analyses, long opposed rate changes," says Allan Saunderson of the Eurozone Advisors consultancy. Representatives of several national central banks confirm this view.

There is no evidence that the 18-member council is split into factions, but the strict anti-inflationary culture of the institution sits well with France and the old D-Mark zone countries - Germany, the Netherlands, Austria.

At the same time, the startling outbreak of hostilities last year between the eurogroup and the ECB suggests all is not always well. Mr Reynders initiated the sniping in September 2000, when Mr Duisenberg failed to appear at a eurogroup meeting.

Mr Duisenberg has been unfazed, making clear in a memorable phrase that he is not going to bow to political pressure: "I hear, but I don't listen."

Additional reporting by Peter Norman and Fernando Saiz