ECB has accumulated substantial political power, Sant warns

The European Central Bank has accumulated substantial political power, Labour MEP and former Prime Minister Alfred Sant told the European Parliament.

“One could claim that this power exceeds the mandate given to it under the existing treaties,” Sant said. “That power will be widening as a result of the responsibilties entrusted to the Bank under the provisions of the banking union.”

He said that the issue is not about the quality of the ECB’s decision making but about whether a power vacuum has been allowed to develop in euro monetary decision making and whether this has been occupied by the European Investment Bank.

“The issue is whether this is a good idea, and whether we should seek to balance better the political power secured by the European Central Bank in the interests of democratic accountability,” Sant said.

Sant argued that the ECB has become the most successful institution of the euro system and the most prepared to launched initiatives meant to counter economic stagnation in Europe. He argued that under ECB president Mario Draghi and his predecessor, the Bank’s decisions provided leadership to the eurosystem.

“Some were controversial --  still are,” he said. “However, they needed to be taken. I am one of those who agree with the decisons of the past few years.”