Digital euro and accountability of the European Central Bank
| Published date | 01 August 2023 |
| DOI | http://doi.org/10.1177/1023263X231224733 |
| Author | Seraina Grünewald |
| Date | 01 August 2023 |
| Subject Matter | Articles |
Digital euro and accountability
of the European Central Bank
Seraina Grünewald*
Abstract
The digital euro might be adopted as early as 2026 –a momentous decision, with profound soci-
etal consequences. And yet, little attention has been paid to the European Central Bank (ECB)’s
accountability in the process of adoption and beyond. This article attempts to fill this void. It
argues that the concept of ‘independent accountability’, still prevalent regarding monetary policy,
is an inappropriate standard to hold the ECB accountable for its decisions on the digital euro for at
least three reasons. First, while the ECB has the power to issue a digital euro with cash-like fea-
tures, its mandate is not clear-cut, nor are its decisions merely technical in nature. Second, the
digital euro affects areas in which the ECB has no specific expertise or authority, such as privacy,
and its adoption requires an unprecedented level of coordination with the EU legislators. And
third, it is not only public authorities with which the ECB must engage, but also market actors
and citizens to ensure the digital euro’s success. What emerges is a new accountability standard,
with a broader range of ‘accountability stakeholders’and a stronger role for ex ante consultations.
Keywords
European Central Bank, accountability, independence, digital euro, monetary policy, banknotes,
Central Bank Digital Currency, payments
1. Introduction
The European Central Bank (ECB)’s independence and accountability have given
rise to numerous academic studies
1
and repeated policy discussions.
2
In the then prevailing
*
University of St. Gallen, Switzerland
Corresponding author:
Seraina Grünewald, University of St. Gallen, 9000 St. Gallen, Switzerland.
E-mail: seraina.gruenewald@unisg.ch
1. Some of the most seminal studies include R. Smits, The European Central Bank, Institutional Aspects (Kluwer Law
International, 1997); R.M. Lastra, ‘The Independence of the European System of Central Banks’,33The Harvard
International Law Journal (1992); F. Amtenbrink, The Democratic Accountability of Central Banks: A Comparative
Article
Maastricht Journal of European and
Comparative Law
2023, Vol. 30(4) 438–454
© The Author(s) 2024
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/1023263X231224733
maastrichtjournal.sagepub.com
monetarist spirit, the Maastricht Treaty granted the ECB an unparalleled level of independ-
ence, giving it the reputation of ‘the most independent central bank in the world’.
3
This
means that the ECB fulfills its monetary policy tasks and makes use of its powers in full
autonomy and without instructions from any external body.
4
Accountability was designed
to support the ECB’s far-reaching independence, rather than as a real counterbalance to it.
It was thought that accountability could be limited to the ECB explaining and justifying ex
post the actions or decisions taken in the exercise of its tasks. The Treaties gave the
European Parliament the role of the ECB’s main accountability forum, albeit with limited
means to genuinely engage with the ECB on its monetary policy.
Since the global financial crisis, this asymmetry between independence and accountability –the
‘two sides of the same coin’
5
–has grown further. The ECB has interpreted its monetary mandate
much more broadly than anticipated at the time of the drafting of the Maastricht Treaty, taking on
new tasks, pursuing new objectives and using additional instruments to attain these objectives.
6
While the 2021 strategy review formalized these developments,
7
the accountability arrangements
of the ECB remain largely limited to the old Maastricht paradigm.
8
The aim of this article is not to discuss the appropriateness of these accountability
arrangements for monetary policy, to which they are geared. Instead, the article will turn to a
Study of the European Central Bank (Hart, 1999); P. Magnette, ‘Towards “Accountable Independence”? Parliamentary
Controls of the European Central Bank and the Rise of a New Democratic Model’,6EuropeanLaw Journal(2000). From
the newer literature see, for example, D. Fromage et al., ‘ECB Independence and Accountability Today: Towards a
(Necessary) Redefinition?’,26Maastricht Journal of European and Comparative Law (2019); M. Dawson,
A. Maricut-Akbik and A. Bobic, ‘Reconciling Independence and Accountability at the European Central Bank: The
False Promise of Proceduralism’,25European Law Journal (2019); S. Collignon and S. Diessner, ‘The ECB’s
Monetary Dialogue with the European Parliament: Efficiency and Accountability during the Euro Crisis?’,54Journal
of Common Market Studies (2016); T. Beukers, D. Fromage and G. Monti (eds), The New European Central Bank:
Taking Stock and Looking Ahead (OUP, 2022).
2. In February 2021, the European Parliament called on the ECB to enter into negotiations on an interinstitutional agreement
on monetary policy. On 5 June 2023, the two institutions instead exchanged letters to confirm their common understand-
ing of the accountability arrangements for monetary policy. See www.ecb.europa.eu/pub/pdf/other/Exchange_of_
Letters_ECB_European_Parliament_central_banking230605~87aa8ed4a3.en.pdf.
3. A. Lamfalussy, ‘The European Central Bank: Independent and Accountable’, Speech (13 May 1997), www.ecb.europa.
eu/press/key/date/1997/html/sp970513.en.html; W.F. Duisenberg, ‘The Role of the Central Bank in the United Europe’,
Speech (4 May 1990), www.ecb.europa.eu/press/key/date/1999/html/sp990504.en.html.
4. Article 130 TFEU.
5. ECB representatives have referred to this metaphor repeatedly. See, e.g., Ch. Lagarde, ‘Debate About the Annual Report’,
Introductory statement on the occasion of the presentation of the ECB Annual Report 2018 to the European Parliament (11
February 2020), www.bis.org/review/r200211f.pdf.
6. Among the many voices in the literature J. van ’t Klooster and N. de Boer, ‘What To Do with the ECB’s Secondary
Mandate’,61Journal of Common Market Studies (2022); M. Ioannidis and Ch. Zilioli, ‘Climate Change and the
Mandate of the ECB’,59Common Market Law Review (2022); critically A. Steinbach, ‘The Greening of the
Economic and Monetary Union’,59Common Market Law Review (2022); S. Dietz, ‘Green Monetary Policy between
Market Neutrality and Market Efficiency’,59Common Market Law Review (2022).
7. See ECB, ‘The ECB’s Monetary Policy Strategy Statement’(8 July 2021), www.ecb.europa.eu/home/search/review/html/
ecb.strategyreview_monpol_strategy_statement.en.html, and the accompanying ‘Overview Note’, www.ecb.europa.eu/
home/search/review/html/ecb.strategyreview_monpol_strategy_overview.en.html. For an in-depth account of the
changes brought by the 2021 strategy review and the need for enhanced accountability arrangements see
S. Grünewald and J. van ’t Klooster, ‘New Strategy, New Accountability? The European Central Bank and the
European Parliament After the Strategy Review’,60Common Market Law Review (2023).
8. See also F. Amtenbrink and M. Markakis, ‘The Legitimacy and Accountability of the ECB at the Age of Twenty’,in
T. Beukers, D. Fromage and G. Monti (eds), The New European Central Bank: Taking Stock and Looking Ahead.
Grünewald 439
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