“Whatever it takes”? The European Central Bank’s accountability today
It is commonly accepted that central banks need to be independent from political powers to fulfil their task adequately. This is because politicians tend to focus on short-term objectives, instead of making decisions that will be beneficial in the longer term. The European Central Bank (ECB), originally established to conduct the European Union (EU)’s monetary policy, is one of the most independent central banks worldwide. Several safeguards have been introduced in the EU Treaties to protect it from any kind of political influence. Nevertheless, such independent character does not imply that the ECB cannot be held accountable for its actions by other (EU) institutions. This simply means that the ECB’s accountability is a form of ‘soft’ accountability in the framework of which no sanctions can be imposed. This situation was recently further complicated as the ECB has undergone important changes in recent years. It has been led to stretch its mandate in the monetary policy area by resorting to unconventional monetary policy, and it was attributed new bank supervision powers with the recent creation of the Banking Union. The question can thus be asked as to whether these changes have been accompanied with an adequate adaptation of the accountability mechanisms in place.
This issue was addressed during a workshop on The ECB’s accountability in a multilevel European orderorganized by MCEL members Paul Dermine, Diane Fromage and Phedon Nicolaides on 29 and 30 May at UM Campus Brussels. The workshop conveyed a group of academics, practitioners and think-tankers, with the clear ambition to offer renewed perspectives on the question of the ECB’s accountability and independence, informed by the exceptional transformations that its mandate, functions and tasks have undergone over the last few years.
It started with an opening address by Johannes Lindner (European Central Bank) who gave an insider’s view on the question of the ECB’s accountability and shared some empirical data. Four panels then followed. The first one aimed at setting the background for the analysis by redefining the challenges of the ECB’s accountability. Christy-Ann Petit (European University Institute) examined how the balanced between accountability and independence has evolved since the creation of the ECB, while Fabian Amtenbrink (Rotterdam University) specifically focused on the relationship between these two concepts after the crisis. Christel Koop (King’s College London) looked at how the ECB’s democratic accountability and legitimacy are connected in the eyes of citizens, and at what the likely implications of enhancing the ECB’s transparency and accountability are. The second panel focused on the ECB’s accountability in the monetary policy area today. Paul Dermine assessed what the role of the ECB in Member States’ financial assistance has been and what this implies for the ECB’s accountability, and Klaus Tuori (University of Helsinki) turned to the Quantitative Easing while David Howarth (University of Luxembourg) focused on Unconventional Monetary Policy. The third panel considered the ECB’s accountability in Supervisory matters. Marta Bozina Beros (Juraj Dobrila University of Pula (UNIPU)) considered transparency issues, Phedon Nicolaides turned to accountability within the Single Supervisory Mechanism while Napoleon Xanthoulis (King’s College London) was interested in the judicial liability of the ECB in banking supervision. The final panel served to open up the debate and consider the future of the ECB’s accountability. Benjamin Braun (Max Planck Institute) presented Transparency International’s report “Two sides of the same coin? Independence and accountability at the ECB” and Larisa Dragomir (European Commission) looked at the balance between accountability and rules. Diane Fromage offered an analysis of the ECB’s numerous roles and their impact in terms of accountability and Ellen Vos concluded the workshop.
This event, which was supported by the Law Faculty, CERiM and SWOL, counted with approximately 40 participants from academia and practice.