Essay on Democratic Deficit: The European Central Bank Case
Posted: 30 Aug 2009
Date Written: August 14, 2009
The European Central Bank (ECB) was built in Phase Two Economic and Monetary Union (EMU) in 1998. This institution performs tasks in line with its primary objective to maintain price stability, the rules of the EC Treaty and the Statute of the European System of Central Banks (ESCB). The ECB has functioned as a single supranational monetary institution in the euro area (eurosystem) since 1999. From 1999 to 2009, only 16 the European Union member states have been in the eurosystem. They are Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal, and Finland in 1999; Greece in 2001; Slovenia in 2007; Cyprus and Malta in 2008; and Slovakia in 2009.
This paper aimed to investigate whether democratic deficit is occurring in the ECB. Data was collected from the ECB, European Commission, and other relevant resources. We use qualitative methodology by literature study to examine whether democratic deficit is becoming of in the ECB. We find that democratic deficit has been running in the ECB because the European Parliament as a political representative of the EU citizens in the euro area has no access to see the minutes of the meetings of the ECB’s main monetary decision-making bodies: the Governing Council, and the Executive Board, according to article 10.4 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank (Statute of the ESCB), which is annexed to the EC Treaty. In accordance with this article which the proceedings of the meetings shall be confidential, it means that the minutes of the meetings of the ECB are confidential. In conclusion, our findings strengthened precursor studies on democratic deficit in the ECB by Caporale and Cipollini (2002), Verdun (2003, 1998), Gormley and Haan (1996), and Kenen (1999, 1995).
Keywords: EMU, ECB, democratic deficit, EC Treaty, Protocol on the Statute of the European System of Central Banks and of the European Central Bank, Eurosystem, ESCB
JEL Classification: O5, O52
Suggested Citation: Suggested Citation