Mich : Democracy and Monetary Policy Implementation in the EU

CHAIRE HOOVER Louvain-La-Neuve

05 novembre 2019

12h45-14h

Louvain-la-Neuve

salle Vivès (D-305), Place Montesquieu 3

 Jens Van't Klooster

The European Central Bank (ECB)'s justifies the design of its monetary policy operations with reference to a financial risk management strategy, whose overarching policy objectives are price stability and avoiding financial losses. What should we make of that strategy and the choices that the ECB makes in following it? What question does it raise concerning European monetary integration in the absence of more political integration? In the presentation, I do two things. First, I argue that the ECB’s approach to financial risk involves undemocratic and arbitrary exercises of political power. Second, I outline alternative procedural arrangements, which address the democratic issues identified, but raise new ones. The alternatives are (i) An increase in the scope of EU legislative authority over the ECB, (ii) A Eurozone parliament and (iii) A return to the pre-2006 practice of decentralized implementation. The talk is about democracy in the EU and does not presuppose any detailed knowledge concerning financial markets.