The ECB has both a primary mandate to safeguard price stability, as well as a secondary mandate to ‘support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union’. After neglecting this secondary mandate for many years, the ECB has recently decided to use it as a basis for incorporating climate change considerations in its monetary policy operations. As De Boer and Van ‘t Klooster have argued, however, implementation of the secondary mandate raises a democratic challenge. The Treaties offer multiple secondary objectives without a clear hierarchy, making it unclear how the ECB should act on them. Putting the secondary mandate into practice would require the ECB to make inherently political choices on which objectives to prioritize. For this, the ECB lacks the democratic legitimacy, as an independent institution staffed by unelected officials. 

To overcome this democratic challenge, De Boer and Van ‘t Klooster have argued that the EU’s political institutions should offer guidance on how the ECB is to implement its secondary mandate. The European Parliament could offer an interpretation of the secondary mandate and thus provide democratic authorization to the ECB for acting on this mandate. This proposal was already endorsed by ECB President Lagarde in November 2022. The European Parliament’s 2023 resolution on the ECB now follows this approach as paragraph 28 “suggests taking advantage of this resolution to provide input to the ECB on secondary objectives”.

The NGO Positive Money Europe called the resolution ‘historic’, as ‘[f]or the first time ever, MEPs included a whole section on “secondary objectives” in the resolution.’  Van ‘t Klooster and De Boer are somewhat more cautious. They consider the resolution ‘an important step’, but stress that the European Parliament will have to specify the secondary mandate in the coming years and hold the ECB accountable on that basis. ‘If so’, they say, ‘a constitutional practice could develop that significantly enhances the democratic legitimacy of the ECB’s monetary policy.’

• Read the press release of positive money on the resolution here
• The research of Nik and Jens was published in the Journal of Common Market Studies