Accountability of the European Central Bank in a Deepening Economic and Monetary Union

Abstract

This chapter examines the democratic dimension of the burgeoning competence of the European Central Bank (ECB) in the functioning of the EMU in the aftermath of the euro crisis. It begins by laying out the EU’s general monetary policy framework and the position of the ECB within it (section 2). On this basis, the next section analyses the variety of legal and policy measures that were taken following the crisis to contain the erosion of the Eurozone (section 3). The inquiry then turns to the existing mechanisms for the ECB’s accountability to parliaments, including both the EP and NPs. The chapter first focuses on the accountability practices with respect to the ECB’s monetary policy (section 4) and then on those concerning the Bank’s role in prudential supervision under the rules of Banking Union (section 5). The concluding section outlines both the pitfalls and the advantages that these arrangements carry and highlights how the ECB and the EU’s parliaments, particularly NPs, have adapted to the changed circumstances (section 6).