Accountability

Accountability is the legal and political obligation of an independent central bank to justify and explain its decisions to the public and its elected representatives.  The ECB’s relations to the European Parliament play a particularly important role with respect to the ECB’s obligation to communicate its monetary policy decisions.  The accountability of the ECB and the transparency of its monetary policy are important elements of the institutional and policy framework of Economic and Monetary Union (EMU).

Accountability is a core element of democratic legitimacy. It can be understood as the legal and political obligation of an independent central bank to properly explain and justify its decisions to the public and its elected representatives in order to enable these to hold the central bank responsible.  A clearly defined mandate is the basis for the democratic legitimacy of delegating monetary policy to an independent central bank, and an overriding focus on the mandate of price stability enables the public to hold an independent central bank accountable more easily.  Accountability thus imposes discipline on the central bank to perform its tasks as well as possible.  The appropriate channels for ensuring the accountability of a central bank depend on the institutional framework and on the bank’s mandate.  As a body established by virtue of the Treaty establishing the European Community, and acting within the limits of the powers conferred upon it, the ECB has the statutory task of maintaining price stability and of performing other central banking functions for the euro area as a whole.  Therefore, the ECB is accountable first and foremost to the citizens of the European Union, from whom the Treaty’s legitimacy derives, and to the European Parliament, which is the only European institution directly elected by EU citizens.  The ECB’s relationship with the European Parliament in this regard is defined by the Treaty and fully respects the Eurosystem’s independent status.  The Treaty contains a number of reporting requirements for the ECB (e.g. the presentation of an Annual Report to the European Parliament, the Commission and the EU Council) and establishes regular presentations to the European Parliament to ensure accountability.