Reconciling Independence and accountability at the European Central Bank: The false promise of Proceduralism

Published date01 January 2019
Date01 January 2019
Reconciling Independence and accountability at
the European Central Bank: The false promise of
Mark Dawson* |Ana Bobić*
Adina MaricutAkbik*
This article revisits the balancing act between independence and accountability at the European
Central Bank (ECB). It contrasts procedural and substantive concepts of accountability, and
challenges the mainstream idea that independence and accountability can be reconciled through
narrow mandates, the indiscriminate increase of transparency, the creation of multiple channels of
accountability, and the active use of judicial review. These assumptions form the pillars of a
procedural type of accountability that promises to resolve the independence/accountability dilemma
but fails to do so in practice. The article brings evidence to show how ECB accountability has
become a complex administrative exercise that focuses on the procedural steps leading up to
monetary and supervisory decisions while simultaneously limiting substantive accountability. The
failure to acknowledge the tradeoff between independence and accountability (said to be two sides
of the same coin) has resulted in a tendency to privilege the former over the latter.
By now, there exists a veritable cottage industry in law and the social sciences of articles exploring the
accountability of independent central banks in general and of the European Central Bank (ECB) in particular.
literature is oriented around a central paradox. On the one hand, the independence of central banks is essential to
their institutional design. For the ECB, this is anchored in the commitment under Article 282(3) TFEU that the ECB
shall be independent in the exercise of its powers and in the management of its financesand that Union
institutions, bodies, offices and agencies and the governments of the Member States shall respect that
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This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and
reproduction in any medium, provided the original work is properly cited.
© 2019 The Authors. European Law Journal Published by John Wiley & Sons Ltd
Hertie School of Governance, Berlin.
This research has been supported by funding from the European Research Council under the European Union's Horizon 2020
research and innovation programme (grant agreement no. 716923).
See for example in this journal P. Magnette, Towards Accountable Independence? Parliamentary Controls of the European Central
Bank and the Rise of a New Democratic Model(2000) 6 European Law Journal 326; D. Curtin, ‘“Accountable Independenceof the
European Central Bank: Seeing the Logics of Transparency(2017) 23 European Law Journal 28.
DOI: 10.1111/eulj.12305
Eur Law J. 2019;25:7593. 75
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 tasksto 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 counterpartsto 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 circlebetween 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 proceduraland 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 illconceived 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 illconceived 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 multilevel 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 decisionmaking process. These four
pillars of procedural accountability represent commonlyheld 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 (accessed 29 June 2018); for the latter,
see (accessed 29 June 2018)
K. Lenaerts, The European Court of Justice and ProcessOriented 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.

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