Home Les bulletins GEAB GEAB 114 Euro governance / Horizon 2020: The inevitable evolution of the ECB’s unique mandate

GEAB 114

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 Apr 2017

Euro governance / Horizon 2020: The inevitable evolution of the ECB’s unique mandate

The financial crisis followed by the debt crisis has led to a substantial change in the mandate of the European Central Bank (ECB) and to more political provisions. The ECB has acquired implicit mandates to safeguard the euro but also an economic policy which all go far beyond the original objective of price stability. The current ambiguity can not last and the enlargement of the mandate could be one of the great European debates of the early 2020s.

In the ECB’s report published on March 28, 2017 by the Anti-Corruption and Transparency Association named Transparency International[1], the question of the nature of the institution’s mandate – and its consequences for its liability – was clearly raised. “The extreme measures taken by the ECB since 2008,” the report reads, “pushed the ECB’s mandate to its breaking point, challenging the institution’s responsibility framework”. In the past 20 years, never has the mandate of the ECB seemed so obsolete.

The successful decade of the original mandate 

This mandate was defined by Article 127 of the Maastricht Treaty of 1992 and makes the ECB the guardian of price stability in the euro zone[2]. This stability, which was later defined by the Governing Council as “a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%”[3] is legally the sole responsibility of the ECB. Its former president until 2011, Jean-Claude Trichet, liked to repeat every once in a while, that he had “one needle to his compass”[4], which was price stability. His successor, Mario Draghi, does not cease to hammer the terms of the aforementioned contract[5].

Comments

To leave a comment sign up now
In summary

This expression "chaotic recomposition" seems best to summarise the phase where we currently are with regards to the development of the crisis, a step indicated here as extending over four [...]

In the GEAB no 109 of November 2016 we wondered if "the euro would survive beyond the year 2017". Five months later, we wish to deepen and complete our analysis. [...]

Euro-diversification As part of our forecasts mentioned above on the probable reform of the common currency, we recommend people to "diversify their euros" simply by placing part of any liquid [...]

Related articles
Geta Grama-Moldovan
15 Mar 2020

Investments, trends and recommendations (March 2020)

#bitcoin #cryptos #euro #finance #gold #investments #oil #real estate

Markets/financial products - Do we really need to mention this?  You don't need our insight to realise this, but for the sake of clarity: it's time to stay away from [...]

Geta Grama-Moldovan
15 Jan 2020

Investments, trends and recommendations (Jan 2020)

#cryptos #euro #finance #investments #oil #rawmaterials

Bitcoin: Digital Gold The fairly sharp rise in the price of Bitcoin at the time of the Iranian-American crisis confirms the intuition we had in June: Bitcoin is acting as [...]

Geta Grama-Moldovan
15 Jan 2020

Panorama 2020: 32 key trends

#euro #europe #finance #geopolitics #multipolarworld #oil #rawmaterials

As we do every year, GEAB by LEAP is presenting a landscape of the key trends for the coming year. Besides the intellectual value of this LEAP contribution, which, of [...]