Chronic. Can the European Parliament discuss the monetary policy of the European Central Bank (ECB)? Barely has he a little right of inspection, but he has no say in the matter! Should we find that normal, in the name of the independence of the ECB, or contrary to democracy, who should preside over its action?
On February 14, when they received Christine Lagarde, President of the ECB, on the occasion of the 20th anniversary of the euro, European parliamentarians discussed with her the orientation of monetary policy, the weak capacity for interest rate hike to counter inflation driven by energy prices, climate roadmap. The side effects of a few Conservative MPs, castigating the “green shift” and the risk that it will divert the ECB from its core mandate, did not overturn Parliament’s rather strong consensus on the subject, which was reflected the next day in its vote on an annual report on monetary policy. With 569 votes for, 84 against and 38 abstentions, this report obtained the largest majority of the last ten years.
Some amendments requested by the Conservatives have certainly been passed, aiming in particular to ensure that the ECB does not call into question the principle of market neutrality by buying green assets. But that didn’t detract from the section of the report devoted to the Central Bank’s climate action. In particular, it defends that the ECB must use all the tools at its disposal to combat and mitigate climate-related risks, and that it should rectify its strategy, currently focused only on the risks that climate poses to finance. However, it is also finance that harms the climate, in particular when the ECB’s refinancing and asset purchase programs indirectly support carbon-intensive activities, or when European banks, under the impetus of HSBC, Barclays and BNP Paribas, ” continue to pump money into companies that expand oil and gas production, in clear contradiction to climate science » (ShareAction, February 14, 2022).
“Judge and Party”
But will this have any influence on the ECB’s strategy, in the direction of more ambitious climate action? And the conservatives, if they had succeeded in winning a majority, would they have obtained from the ECB that it backtrack on these small steps in the direction of the climate? In both cases, the answer is no. Because the European Parliament does not have this power. Mandate, missions, objectives of the ECB are never discussed except by the ECB itself, as well as “judge and party in the interpretation of its mandate”, writes Eric Monnet in his book The Welfare Bank (Seuil, 2021), seeing it, rightly, as a democratic problem.
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