Limits and Opportunities for the ECB in the Multi-Tier Governance

Analüüs 14-12-2012

The European Central Bank constitutes together with the national Central Banks the European System of Central Banks: a unique governance system in which the execution of tasks conferred upon the ESCB is divided between the European level (ECB) and the national level (national Central Banks) and which is characterised by the principle of decentralisation. The EU level decides to which extent the national level is competent for the proper execution of Central Bank’s tasks whilst the main decision-making body is composed by representatives of the national level. A possible extension of this successful governance to other field of economic governance in the euro zone is to be examined. The particularities of the ESCB (independence guarantee and its function to maintain price stability), however, conflict with an extension of its role. Such an extension would require more democratic accountability and in-depth modifications of the law and the functioning of the ECB.