The Complex Relationship between Independence and Accountability: Mission Impossible for the European Central Bank?

Independence is a corner stone of the ECB’s institutional design. However, during the Euro crisis, the central bank’s actions, ranging from interfering in domestic affairs of countries to expanding its mandate to supervise banks, triggered massive public criticism and a debate about the ECB’s accountability. This raises the question of the compatibility of independence and accountability. Building on the principal-agent, accountability and EU governance literature, we argue in this paper first that a constellation of high independence with weakly developed accountability mechanisms undermine in the long-term the trust of principals and public opinion in the agent and thus decrease acceptance of the ECB’s decisions. Second, whereas a majority of studies focuses on the transparency dimension of accountability, in this piece we add controllability, responsibility, responsiveness and liability as central dimensions of accountability.