The adopted text says the European Central Bank’s (ECB) independence is essential for it to execute its main role of keeping prices stable. MEPs say the ECB must be able to make decisions free from political pressure. At the same time, Parliament recognises that while central banks require strong independence, they should remain accountable and not operate in isolation. The text also supports the solidarity expressed by the ECB and central banks worldwide with the US Federal Reserve.
Cash and crypto
Acknowledging ongoing work on the introduction of the digital euro, which the text says is essential to strengthening EU monetary sovereignty, reducing fragmentation in retail payments, and supporting the integrity and resilience of the single market. It also stresses the importance of maintaining the role of cash. MEPs say the increasing digitalisation of payments, if left exclusively to private and non-EU actors, risks creating new forms of exclusion for both users and merchants, and they want the ECB to intensify its monitoring of crypto-assets.
Inflation
On a more critical note, the report argues that a faster return to price stability should have been achieved through ECB decisions during the recent period of high inflation. The ECB is encouraged to carefully analyse the causes for this stubborn inflation to learn lessons for future crises. MEPs are concerned about the high cost of living, as food and energy prices have increased in Europe since the COVID-19 pandemic, noting that on average the price of a meal is a third higher than before the pandemic and that this has particularly affected low-income households. While acknowledging that inflation could rise again, the text underlines that any further easing of monetary policy should be cautious, based on economic data, and always focused on maintaining price stability.
Quicker end to unconventional measures
The text also highlights concerns about the ECB’s unconventional measures, especially its asset purchase programmes. It says that these tools have side effects, such as distorting market price signals, and the ECB is criticised for reducing its balance sheet too slowly. The report also notes with concern that the ECB’s short-term lending schemes have largely replaced private interbank lending since the 2008 financial crisis.
MEPs support the reduction of the ECB’s direct involvement in buying securities and gradually ending government bond purchases. They also acknowledge that governments’ fiscal positions have made it harder for the ECB to focus on price stability.
Quotes
During Monday’s debate, rapporteur Johan Van Overtveldt (ECR, BE) said: “The independence of the ECB is not a technical detail. History provides ample evidence that direct political intervention or interference with central bank independence invariably leads to inflation, financial instability and even nasty political turmoil. Reaffirming the ECB’s independence is even more important in the current global context. This threat to independence is especially pronounced in the US. Monetary and financial stability are like water and electricity. Their importance is only recognised when they are absent.”
Ms Lagarde said that “at a time when central bank independence is challenged in parts of the world, the European Parliament’s clear support of the principle sends an important signal to us. That independence ensures that we keep control of our monetary destiny. We also recognise however that the ECB’s independence goes hand in hand with accountability.”
Vote result
The text was adopted with 443 votes in favour, 71 votes against and 117 abstentions.
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