In 2012, Mario Draghi vowed “ to do whatever it takes to preserve the euro”. Five years later, it is not a question of whether a new kind of Outright Monetary Transactions programme could save the euro, but rather a question of democratic legitimacy. In its report “ Two sides of the same coin? Independence and accountability at the ECB”, Transparency International points out that the ECB must increase its democratic oversight and accountability if the Euro is to survive the next crisis.
Even though the European Central Bank has played the main role in saving the economic and financial system, Transparency International highlights the need to improve the democratic legitimacy and scrutiny of this institution: “While the ECB has done more than any other actor to save the financial and economic system of the euro area from collapse, its crisis-related activities went well beyond what its architects had envisioned as the central bank’s role, and require greater scrutiny”.
The study undertaken by Transparency International submits 18 specific recommendations as to how the ECB can improve its governance and its democratic legitimacy.
The report points at the lack of political leadership and the granting of new powers without decisive reform which has led the ECB to stray into the area of political decision-making without appropriate democratic scrutiny. The organization warns that the ECB’s independence limits its accountability to citizens.
Transparency International also denounces the fact that elected politicians hand over their responsibilities to unelected technocrats who are left “to do the dirty work” for them. The ECB’s decision should not only be based on technical factors but should involve political considerations: “clearly decisions which affect the fate of whole economies should have some kind of democratic oversight. The ECB should not be in a position to pull the plug on a country’s euro membership, a decision ultimately down to democratically elected politicians”.
The report welcomes the improvements to transparency with the publication of the Governing minutes and diaries of Executive Board Members but proposes that the ECB should make it a rule to publish its decisions, recommendations and opinions.
Regarding its relations with the others institutions, Transparency International recommends that the ECB should seek an agreement with the Eurogroup and the EP outlining political approval procedures for measures which are necessary but go beyond the mandate of the bank (for instance when the ECB sends letters with specific recommendations to governments). Transparency International also calls the ECB to join the Transparency Register for EU lobby organizations.
Read Transparency International EU report here