The ECB is an EU institution, but because of its independent status and its specific responsibilities, it occupies a special position within the institutional framework of the EU.
The Treaty on the Functioning of the European Union (TFEU) assigns a clear mandate to the ECB, the maintenance of price stability, as well as a number of other tasks. To fulfil its mandate and tasks, the Treaty grants the ECB full independence from political interference.
Given the ECB´s independence and its exclusive competence to define and conduct monetary policy, its relations with other policymaking bodies is necessarily limited to non-binding dialogue. At the same time, the accountability requirements defined in the Treaty ensure that it takes full responsibility for its action before the EU citizens and their elected representatives.
The dialogue between the ECB and other policymakers and social partners provides an opportunity for the ECB to gain information and insights and explain its monetary policy decisions, while it allows the counterparts to improve their understanding of the ECB´s actions and how their own actions feed into the price formation process. Such interaction enhances the flow of information, promotes mutual understanding of each other’s policy views and allows for a dialogue on issues of common interest, in full respect of the respective responsibilities.
To this end, the ECB maintains relations with the following European institutions.
The ECB’s independence is accompanied by commensurate accountability and reporting obligations, allowing democratic scrutiny of the measures it takes to fulfil its mandate as foreseen in the Treaties. The ECB explains its decisions and underlying reasoning to EU citizens and their elected representatives. The European Parliament, which is directly elected by the people of Europe, plays a key role in holding the ECB to account. More detailed information about the discharge of the ECB’s accountability obligations can be found in a dedicated section. The Chair of the Supervisory Board attends public hearings and exchanges of views with the European Parliament on supervisory topics as part of the ECB’s accountability for banking supervision. The European Parliament is also involved in the appointment procedure for the members of the ECB’s Executive Board and for the Chair and Vice-Chair of the ECB’s Supervisory Board by giving its opinion on the candidates recommended by the EU Council.
The President of the ECB is invited to attend the meetings of the EU Council whenever matters relating to the objectives and tasks of the ESCB are discussed, as laid down in Article 284 of the Treaty. This typically takes place in the ECOFIN Council, which is made up of the economics and finance ministers of all EU Member States. In addition, the ECB President is regularly invited to the meetings of the Eurogroup, the monthly informal meetings of euro area finance ministers. The Chair of the Supervisory Board attends selected Eurogroup meetings for exchanges of views on supervisory topics as part of the ECB’s accountability for banking supervision.
The ECB also attends the meetings of the bodies which prepare the above-mentioned meetings. In return, the Treaty provides for EU policymakers to attend – without the right to vote – the meetings of the ECB’s Governing Council.
Another of the ECB’s key counterparts is the European Commission, which is the guardian of the EU treaties and initiator of EU legislation. The dialogue between the Commission and the ECB is particularly important in view of the European Commission’s role in the coordination of economic policies and its tasks relating to Economic and Monetary Union. As regards legislation, and in particular financial legislation, the ECB is regularly consulted on legislative proposals or other initiatives by the Commission. One member of the Commission may attend the meetings of the ECB’s Governing Council, though without the right to vote. Further contacts take place in the context of the above- mentioned meetings of EU and euro area bodies in which both the Commission and the ECB participate.
Like all other EU institutions, the ECB is subject to the rulings of the European Court of Justice.
Furthermore, the Statute of the ESCB and of the ECB provides for two external control layers by auditors. On the one hand, an independent external auditor is appointed to audit the annual accounts of the ECB. On the other hand, the European Court of Auditors examines the operational efficiency of the management of the ECB. In addition, the ECB falls within the scope of the EU anti-fraud scheme.
The ECB maintains close relations with various EU authorities within its fields of competence. Most importantly, the ECB collaborates closely with the authorities that form part of the European System of Financial Supervision (ESFS), which includes the three microprudential European supervisory authorities (ESAs) and the European Systemic Risk Board (ESRB). The ECB provides the secretariat for the ESRB and offers analytical, administrative and logistical support. In the field of banking resolution, the ECB maintains close working relations with the Single Resolution Board (SRB). As part of its role in monitoring the implementation of macroeconomic adjustment programmes for Member States in need of financial support, the ECB also collaborates with the European Stability Mechanism (ESM).
The ECB meets with the EU’s social partners within the framework of the Macroeconomic Dialogue, which was established by the European Council in June 1999. This dialogue allows the ECB to explain its policy course and thereby contribute to the anchoring of inflation expectations, and gain first-hand information from social partners on issues of mutual interest.
In addition, for those tasks where the ECB shares competences with other EU institutions or bodies (for instance in the field of statistics), the Treaty explicitly calls for cooperation between the ECB and the institutions or bodies concerned. The ECB also gives its opinion on draft EU and national legislation of relevance to the ESCB (ECB Opinions) and may propose EU legislation or act as EU legislator in specific cases.