independence.’On the other hand, central banks exercise a level of regulatory authority that is simply incompatible
with basic principles of democratic accountability under conditions of operational independence. As a result, their
independence is ubiquitously accompanied by commitments to legal and political accountability. Central banks,
including the ECB, are asked to perform two seemingly conflicting tasks—to be both independent and accountable.
Central banks themselves have often responded to this dilemma by simply denying its existence. Independence and
accountability are frequently said to be ‘necessary counterparts’to one another or ‘two sides of the same coin’.
this account, accountability and particularly the transparency of central bank decisions can increase public
confidence in their activities, thereby protecting them from undue political interference.
In this article, we unpack the idea of a ‘virtuous circle’between independence and accountability of central banks.
By discussing the case of the ECB, we argue that such a notion is premised on a proceduralconception of accountability
that can be contrasted to a substantive understanding of the term. We use the qualifiers ‘procedural’and ‘substantive’
in a legal sense, referring to the distinction between evaluating a norm according to its content or evaluating it
according to the process leading to its creation.
Transported to ECB accountability, a procedural view would mean
accounting for how the ECB has reached a decision, whereas a substantive perspective would refer to accounting
for the decision itself. But what does it mean to account for decisions in a substantive sense? First, it means justifying
an action within constitutionally acceptable terms; second, it entails a requirement to modify ill‐conceived policies; and
third, it assumes the possibility to make amends for errors of judgement rather than of process.
Looking more closely
at the elements of substantive accountability, constitutionally acceptable terms as normative benchmarks can be found
in theTreaty framework concerning the ECB. First, Article 119 TFEU lists not only price stability and the ‘support [of]
the general economic policies in the Union, in accordance with the principle of an open market economy with free
competition’, but also provides underlying principles guiding all Member State and Union action: stable prices,
sound public finances and monetary conditions, and a sustainable balance of payments. Constitutionally agreed
terms also include the prohibition of monetary financing in Article 123 TFEU. The remaining two elements,
modification of an ill‐conceived policy and making amends for errors of judgement, would need to be assessed against
these constitutionally acceptable terms.
As this article will demonstrate, such substantive forms of contesting and rendering accountable ECB action have
increasingly been discarded in favour ofa more procedural conception of the accountability of central banks(a view to
which academia has lentsignificant support).This proceduralnotion of accountabilitycarries four mainpillars. The first is
that strong accountabilityis linked to narrow mandates,able to specify clearly the goalsof the ECB ex ante and thereby
allowits activities to be evaluatedex post. The secondlinks accountabilityto transparency:the more openand transparent
the ECB is, the more accountable its governance. The third is a multi‐level conception of central bank accountability:
accountabilityis strengthenedby creating multiplechannels of accountability,whereby the failureof one routecan be rec-
tifiedby the presenceof others.The final pillarcouples accountabilitywith judicialreview: in the absenceof politicalrespon-
siveness,it posits judicial reviewas a mechanism to limit discretionaryECB activity and tie it to rule of law guarantees.
We posit these pillars of ECB accountability as procedural in that they do not conceptualise accountability as
involving or requiring modifying or making amends for ECB policies per se. Rather, accountability is confined to the
presence (or absence) of mechanisms and procedures controlling the ECB's decision‐making process. These four
pillars of procedural accountability represent commonly‐held assumptions used to develop a baseline understanding
of how an accountable ECB should act in a democratic European Union (EU). The assumptions are found both in
official ECB discourse and in the academic literature on central bank accountability. The list discussed here may
not be exhaustive but reflects, we argue, a current consensus on improving ECB accountability.
For the former, see https://www.ecb.europa.eu/ecb/orga/accountability/html/index.en.html (accessed 29 June 2018); for the latter,
see https://www.ecb.europa.eu/press/key/date/2017/html/sp170328_1.en.html (accessed 29 June 2018)
K. Lenaerts, ‘The European Court of Justice and Process‐Oriented Review’(2012) 31 Yearbook of European Law 3; D. Kennedy, ‘Form
and Substance in Private Law Adjudication’(1976) 89 Harvard Law Review 1685.
D. Oliver, Government in the United Kingdom: The search for accountability, effectiveness and citizenship (Milton Keynes, Open Univer-
sity Press 1991), 28.
76 DAWSON ET AL.