Positive Money Europe has published a new briefing outlining 12 recommendations on how the accountability of the ECB could be improved.
The European Parliament’s (EP) current ability to hold the European Central Bank (ECB) to account is riven with pitfalls and limitations. This is partly due to the EP’s Economic and Monetary Affairs (ECON) committee not making full use of the existing powers it has.
This lack of accountability is weakening the ECB’s public legitimacy at a crucial time. The bank will play a key role in aiding the recovery from the economic shock caused by Covid-19. For people across Europe to trust the ECB enough to play its role, the bank must be held accountable for its decisions.
Positive Money Europe’s new briefing, Strengthening the European Parliament’s role in ECB scrutiny, outlines how the EP could improve the way it scrutinises the ECB. We have released the briefing ahead of a public hearing on improving the accountability of the ECB, hosted by the ECON committee at 13:45 on Wednesday 2 December 2020.
Key recommendations from the paper include:
- More effectively consulting the European Parliament in the appointment process of ECB’s executive board members by allowing ECON to longlist possible candidates upstream in the selection process;
- Improving the monetary dialogue hearings by allowing more flexibility in speaking time, creating a sub-committee, improving communication, and increasing diversity in the ECON monetary expert panel;
- Using the EP’s annual resolution on the ECB to clarify the ECB’s secondary mandate and validate the inflation target proposed by the ECB.
The European Parliament currently has no formal agreement with the European Central Bank on the accountability framework, which makes it less visible and accessible for civil society. This is probably one of the factors that fuel distrust in the ECB, as citizens gain the impression that the central bank is faced with no real checks and balances, despite its far-reaching powers. To fix this problem, Positive Money Europe recommends setting out an inter-institutional agreement between the ECB and the European Parliament.