Ryan, John, (2016), “The European Central Bank: A Central Bank Operating In A Democratic Void”, Social Europe, 24 June
The ECB is far more independent than the Federal Reserve, whose legal status is far weaker and which is directly accountable to Congress and the government. The ECB was supposed to be like the German central bank, the Bundesbank. It has, however, failed to emulate the distinctive attributes that made the Bundesbank successful, such as accountability and interdependence with other democratic institutions. The Maastricht Treaty, which defines the role of the ECB, says that the ECB has a primary mandate to maintain stable prices. It also says that, ‘where it is possible without compromising the mandate to maintain price stability’, the ECB will also support the ‘general economic policy of the EU’, which includes, among others, ‘steady, non-inflationary and environmentally friendly growth’ and ‘a high level of employment’. However, the emphasis is explicitly on price stability. The ECB can justly claim to have held together a poorly designed system in difficult circumstances. But the mission creep is its own responsibility.
Relevant posts
- Papadia, Francesco, Wolff, Guntram B., (2016), “Central banks: from omnipotence to impotence?”, Bruegel Blog, 2 March
- Claeys, Grégory, Wolff, Guntram B., (2015), “Have central banks lost their ability to control inflation?”, Bruegel Blog, 1 December