European Central Bank

History

Early years (1998–2007)

The European Central Bank is the de facto successor of the European Monetary Institute (EMI). The EMI was established at the start of the second stage of the EU's Economic and Monetary Union (EMU) to handle the transitional issues of states adopting the euro and prepare for the creation of the ECB and European System of Central Banks (ESCB). The EMI itself took over from the earlier European Monetary Cooperation Fund (EMCF).

The ECB formally replaced the EMI on 1 June 1998 by virtue of the Treaty on European Union (TEU, Treaty of Maastricht), however it did not exercise its full powers until the introduction of the euro on 1 January 1999, signalling the third stage of EMU. The bank was the final institution needed for EMU, as outlined by the EMU reports of Pierre Werner and President Jacques Delors. It was established on 1 June 1998 The first President of the Bank was Wim Duisenberg, the former president of the Dutch central bank and the European Monetary Institute. While Duisenberg had been the head of the EMI (taking over from Alexandre Lamfalussy of Belgium) just before the ECB came into existence, the French government wanted Jean-Claude Trichet, former head of the French central bank, to be the ECB's first president. The French argued that since the ECB was to be located in Germany, its president should be French. This was opposed by the German, Dutch and Belgian governments who saw Duisenberg as a guarantor of a strong euro. Tensions were abated by a gentleman's agreement in which Duisenberg would stand down before the end of his mandate, to be replaced by Trichet.

Trichet replaced Duisenberg as president in November 2003. Until 2007, the ECB had very successfully managed to maintain inflation close but below 2%.

Response to the financial crises (2008–2014)

The European Central Bank underwent through a deep internal transformation as it faced the 2008 financial crisis and the Euro area crisis.

The Euro area crisis began after Greece's new elected government uncovered the real level of indebtedness and budget deficit and warned EU institutions of the imminent danger of a Greek sovereign default.

Foreseeing a possible sovereign default in the eurozone, the general public, international and European institutions, and the financial community reassessed the economic situation and creditworthiness of some Eurozone member states. Consequently, sovereign bonds yields of several Eurozone countries started to rise sharply. This provoked a self-fulfilling panic on financial markets: the more Greek bonds yields rose, the more likely a default became possible, the more bond yields increased in turn.

This panic was also aggravated because of the reluctance of the ECB to react and intervene on sovereign bond markets for two reasons. First, because the ECB's legal framework normally forbids the purchase of sovereign bonds in the primary market (Article 123. TFEU), An over-interpretation of this limitation inhibited the ECB from implementing quantitative easing like the Federal Reserve and the Bank of England did as soon as 2008, which played an important role in stabilizing markets.

Secondly, a decision by the ECB made in 2005 introduced a minimum credit rating (BBB-) for all Eurozone sovereign bonds to be eligible as collateral to the ECB's open market operations. This meant that if private rating agencies were to downgrade a sovereign bond below that threshold, many banks would suddenly become illiquid because they would lose access to ECB refinancing operations. According to former member of the governing council of the ECB Athanasios Orphanides, this change in the ECB's collateral framework "planted the seed" of the euro crisis.

Faced with those regulatory constraints, the ECB led by Jean-Claude Trichet in 2010 was reluctant to intervene to calm down financial markets. Up until 6 May 2010, Trichet formally denied at several press conferences the possibility of the ECB to embark into sovereign bonds purchases, even though Greece, Ireland, Portugal, Spain and Italy faced waves of credit rating downgrades and increasing interest rate spreads.

Low inflation and quantitative easing (2015–2019)

In November 2014, the bank moved into its new premises, while the Eurotower building was dedicated to hosting the newly established supervisory activities of the ECB under European Banking Supervision.

Although the Euro area crisis was almost solved by 2014, the ECB started to face a repeated decline in the Eurozone inflation rate, indicating that the economy was going towards a deflation. Responding to this threat, the ECB announced on 4 September 2014 the launch of two bond buying purchases programmes: the Covered Bond Purchasing Programme (CBPP3) and Asset-Backed Securities Programme (ABSPP).

On 22 January 2015, the ECB announced an extension of those programmes within a full-fledge "quantitative easing" programme which also included sovereign bonds, to the tune of 60 billion euros per month up until at least September 2016. The programme was started on 9 March 2015.

On 8 June 2016, the ECB added corporate bonds to its asset purchases portfolio with the launch of the corporate sector purchase programme (CSPP). Under this programme, it conducted the net purchase of corporate bonds until January 2019 to reach about €177 billion. While the programme was halted for 11 months in January 2019, the ECB restarted net purchases in November 2019.

On 5 May 2020, the Court ordered the Bundestag and the Bundesregierung to ensure the ECB had carried out a proportionality assessment of the vast purchases of government debt in the Public Sector Purchase Programme (PSPP) to ensure the economic and fiscal policy effects do not outweigh its policy objectives. The PSPP-implementing decision has been considered an act ultra vires by the ECB as it was too arbitrary and lacks reasoning in ints proportionality assessment. This ruling by the German Constitutional Court comes at a difficult time for the ECB as it was at the time considering expanding the PEPP. The ruling also reflects the mistrust within some parts of Germany in the ECB, which is seen there as an institution that bails out profligate Southern European countries. Moreover, this ruling also highlights the vital problem on the euro area architecture, as the range of instruments can use to fulfil its mandate remains unclear.

Christine Lagarde's era (2019 – )

In July 2019, EU leaders nominated Christine Lagarde to replace Mario Draghi as ECB President. Lagarde resigned from her position as managing director of the International Monetary Fund in July 2019 and formally took over the ECB's presidency on 1 November 2019.

Lagarde immediately signalled a change of style in the ECB's leadership. She embarked the ECB on a strategic review of the ECB's monetary policy strategy, an exercise the ECB had not done for 17 years. As part of this exercise, Lagarde committed the ECB to look into how monetary policy could contribute to address climate change, and promised that "no stone would be left unturned." The ECB president also adopted a change of communication style, in particular in her use of social media to promote gender equality, and by opening dialogue with civil society stakeholders.

The onset of the COVID-19 pandemic precipitated an unprecedented crisis, profoundly impacting global public health, economies, and societal structures on an unparalleled scale. The crisis led to renewed tensions in European sovereign bonds markets, marked by a growing spreads between the interest rates paid by Eurozone member states, which spurred concerns about the Euro area crisis.

On 12 March 2020, the ECB announced a set of policy measures such as an additional package of net asset purchases of €120 billion by the end of 2020 under the already existing APP, and more favorable terms on the TLTRO III. During the press conference, Christine Lagarde declared that the ECB "[...] is not here to close spreads." This particular statement triggered a sudden negative reaction on financial markets, with a widening of yield spreads in Spain, Italy and Greece.

On 19 March 2020—less than one week after Lagarde's unfortunate statements on the spreads—the ECB announced by surprise the launch of the Pandemic Emergency Purchase Programme (PEPP) worth €750 billion to boost liquidity in the European economy and to contain any sharp increases in sovereign yield spreads. This announcement led to an immediate reboot in stock prices and came one day after the spike of sovereign risk spreads.

The PEPP was designed as a typical "quantitative easing" policy, under which the ECB is able to purchase securities from the private and public sector in a flexible manner. The purpose of the PEPP was to stabilize sovereign bonds yields to low and stable levels, thus preventing self-fulfilling panics in financial markets as was the case during the Euro area crisis.

Inflation surge of 2021

In the summer of 2021, coinciding with the European Central Bank's announcement of its revised monetary policy framework and its initiative for climate action, the eurozone witnessed a notable inflationary surge. This resurgence of inflation continued to escalate over the following year, culminating in inflation rates reaching double digits for the first time since the 1970s, a year after the ECB's strategic updates. The inflation rate reached an unprecedented peak of 4.9% in November 2021, marking the highest level since the introduction of the euro.

The new era of inflation prompted a significant shift in the European Central Bank's framing compared to its stance in the 2000s. Initially, from its inception until the 2008 financial crisis, the ECB's primary objective was price stability, adhering to strict institutional rules that minimized policy trade-offs with other goals beyond price stability. This approach was rooted in the "Central Bank Independence template", advocating that central bank's limited role to price stability and its independence were optimal.

However, the post-financial crisis landscape, especially during the Euro area crisis and subsequent economic stagnation era, necessitated a substantial revision in the ECB's strategy. The ECB moved away from its original Central Bank Independence template, leading to a blurring of its objective hierarchy. It adopted new strategies such as acting as a lender of last resort for the banking system and fostering growth through very low interest rates and extensive asset purchase programs, which were designed to help stabilize specific market segments and in the end revive growth.

In 2021, the European Central Bank embraced a significant strategic pivot by adopting its Climate Action Plan along with a new monetary policy strategy. This shift aimed to institutionalize the ECB's evolving role, moving beyond the singular focus on price stability—a policy shaped largely by the aftermath of the Euro area crisis. Instead, the ECB began acknowledging its multifaceted responsibilities, which now include maintaining financial stability, supporting economic growth, and addressing climate-related objectives. However, with the surging of inflation in 2021, some wondered as to whether the European Central Bank would revert to its foundational role, predominantly focused on chasing the "inflation monsters". The term "inflation monsters'' echoes the 2010 video of the ECB where two young people are facing a blue inflation monster unleashing banknotes and threatening to wreck the economy. Nevertheless, ECB policymakers effectively drew connections between the Central Bank Independence (CBI) framework and the experiences of the stagflation era to rationalize their decision to increase interest rates, avoiding the need for a discourse on regime change. In doing so, they recognized the complex trade-offs inherent in balancing various macroeconomic objectives and the challenging decisions they had to face.

2025

In May 2025, the European Central Bank launched a platform involving around 70 market participants to test digital euro payment functionalities and use cases. The initiative includes banks, fintechs, and merchants, aiming to simulate a digital euro ecosystem and support the development of future payment solutions. As of August 2025, enabling legislation has not been passed by European lawmakers to enable the digital euro to become operational. Bank president Lagarde has urged lawmakers to "seize the 'euro moment'" and rapidly put in place a legislative framework to "pave the way for the potential introduction of a digital euro," in order to address the considerable risk posed by U.S. dollar-linked stablecoins.

Mandate and inflation target

The ECB has one primary objective – price stability – subject to which it may pursue secondary objectives.

Primary mandate

The primary objective of the European Central Bank, set out in Article 127(1) of the Treaty on the Functioning of the European Union, is to maintain price stability within the Eurozone. However the EU Treaties do not specify exactly how the ECB should pursue this objective. The European Central Bank has ample discretion over the way it pursues its price stability objective, as it can self-decide on the inflation target, and may also influence the way inflation is being measured.

The precise formulation of the price stability objective has changed over the years:

The Governing Council in October 1998 defined price stability as inflation of under 2%, "a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2%" and added that price stability "was to be maintained over the medium term". In May 2003, following a thorough review of the ECB's monetary policy strategy, the Governing Council clarified that "in the pursuit of price stability, it aims to maintain inflation rates below, but close to, 2% over the medium term". In 2016, the European Central Bank's president has further adjusted its communication, by introducing the notion of "symmetry" in its definition of its target, thus making it clear that the ECB should respond both to inflationary pressures and to deflationary pressures. As Draghi once said "symmetry meant not only that we would not accept persistently low inflation, but also that there was no cap on inflation at 2%."

On 8 July 2021, as a result of the strategic review led by the new president Christine Lagarde, the ECB officially abandoned the "below but close to two per cent" definition and adopted instead a 2% symmetric inflation target over the medium term.

Secondary mandate

Without prejudice to the objective of price stability, the Treaty (127 TFEU) also provides room for the ECB to pursue other objectives:Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on European Union.This legal provision is often considered to provide a "secondary mandate" to the ECB and offers ample justifications for the ECB to also prioritize other considerations such as full employment or environmental protection, which are mentioned in the Article 3 of the Treaty on the European Union. At the same time, economists and commentators are often divided on whether and how the ECB should pursue those secondary objectives, in particular the environmental impact. ECB official have also frequently pointed out the possible contradictions between those secondary objectives. To better guide the ECB's action on its secondary objectives, it has been suggested that closer consultation with the European Parliament would be warranted. In 2023, the ECB recognised the possible role of the European Parliament in the prioritisation of its secondary objectives.

Tasks

To carry out its main mission, the ECB's tasks include:

Defining and implementing monetary policy

Managing foreign exchange operations

Maintaining the payment system to promote smooth operation of the financial market infrastructure under the T2 payments system and being currently developed technical platform for the settlement of securities in Europe (TARGET2-Securities).

Consultative role: by law, the ECB's opinion is required on any national or EU legislation that falls within the ECB's competence.

Collection and establishment of statistics

International cooperation

Issuing banknotes: the ECB holds the exclusive right to authorise the issuance of euro banknotes. Member states can issue euro coins, but the amount must be authorised by the ECB beforehand (upon the introduction of the euro, the ECB also had exclusive right to issue coins).

Financial stability and prudential policy

Banking supervision: since 2013, the ECB has been put in charge of supervising systemically relevant banks.

Monetary policy tools

The principal monetary policy tool of the European central bank is collateralised borrowing or repo agreements. The collateral used by the ECB is typically high quality public and private sector debt.

All lending to credit institutions must be collateralised as required by Article 18 of the Statute of the ESCB.

The criteria for determining "high quality" for public debt have been preconditions for membership in the European Union: total debt must not be too large in relation to a gross domestic product, for example, and deficits in any given year must not become too large. Though these criteria are fairly simple, a number of accounting techniques may hide the underlying reality of fiscal solvency—or the lack of the same.

Difference with US Federal Reserve

In the United States Federal Reserve, the Federal Reserve buys assets: typically, bonds issued by the Federal government. There is no limit on the bonds that it can buy and one of the tools at its disposal in a financial crisis is to take such extraordinary measures as the purchase of large amounts of assets such as commercial paper. The purpose of such operations is to ensure that adequate liquidity is available for the functioning of the financial system.

The Eurosystem, on the other hand, uses collateralized lending as a default instrument. There are about 1,500 eligible banks which may bid for short-term repo contracts. The difference is that banks in effect borrow cash from the ECB and must pay it back; the short durations allow interest rates to be adjusted continually. When the repo notes come due the participating banks bid again. An increase in the number of notes offered at auction allows an increase in liquidity in the economy. A decrease has the contrary effect. The contracts are carried on the asset side of the European Central Bank's balance sheet and the resulting deposits in member banks are carried as a liability. In layman's terms, the liability of the central bank is money, and an increase in deposits in member banks carried as a liability by the central bank, means that more money has been put into the economy.

To qualify for participation in the auctions, banks must be able to offer proof of appropriate collateral in the form of loans to other entities. These can be the public debt of member states, but a fairly wide range of private banking securities are also accepted. The fairly stringent membership requirements for the European Union, especially with regard to sovereign debt as a percentage of each member state's gross domestic product, are designed to ensure that assets offered to the bank as collateral are, at least in theory, all equally good, and all equally protected from the risk of inflation.

Organisation

The ECB has four decision-making bodies, that take all the decisions with the objective of fulfilling the ECB's mandate:

the Executive Board,

the Governing Council,

the General Council,

the Supervisory Board.

Decision-making bodies

The Executive Board is responsible for the implementation of monetary policy (defined by the Governing Council) and the day-to-day running of the bank. It can issue decisions to national central banks and may also exercise powers delegated to it by the Governing Council. Executive Board members are assigned a portfolio of responsibilities by the President of the ECB. The executive board normally meets every Tuesday.

It is composed of the President of the Bank (currently Christine Lagarde), the Vice-President (currently Boris Vujčić) and four other members. They are all appointed by the European Council for non-renewable terms of eight years. Members of the executive board of the ECB are appointed "from among persons of recognised standing and professional experience in monetary or banking matters by common accord of the governments of the Member States at the level of Heads of State or Government, on a recommendation from the Council, after it has consulted the European Parliament and the Governing Council of the ECB".

José Manuel González-Páramo, a Spanish member of the executive board since June 2004, was due to leave the board in early June 2012, but no replacement had been named as of late May. The Spanish had nominated Barcelona-born Antonio Sáinz de Vicuña – an ECB veteran who heads its legal department – as González-Páramo's replacement as early as January 2012, but alternatives from Luxembourg, Finland, and Slovenia were put forward and no decision made by May. After a long political battle and delays due to the European Parliament's protest over the lack of gender balance at the ECB, Luxembourg's Yves Mersch was appointed as González-Páramo's replacement.

In December 2020, Frank Elderson succeeded to Yves Mersch at the ECB's board.

The Governing Council is the main decision-making body of the Eurosystem. It comprises the members of the executive board (six in total) and the governors of the National Central Banks of the euro area countries (21 as of 2026).

According to Article 284 of the TFEU, the President of the Economic and Financial Affairs Council (ECOFIN) and a representative from the European Commission may attend the meetings as observers, but they lack voting rights.

Capital subscription

The ECB is governed by European law directly, but its setup resembles that of a corporation in the sense that the ECB has shareholders and stock capital. Its initial capital was supposed to be €5 billion and the initial capital allocation key was determined in 1998 on the basis of the member states' populations and GDP, but the key is adjustable. The euro area NCBs were required to pay their respective subscriptions to the ECB's capital in full. The NCBs of the non-participating countries have had to pay 7% of their respective subscriptions to the ECB's capital as a contribution to the operational costs of the ECB. As a result, the ECB was endowed with an initial capital of just under €4 billion. The capital is held by the national central banks of the member states as shareholders. Shares in the ECB are not transferable and cannot be used as collateral. The NCBs are the sole subscribers to and holders of the capital of the ECB.

Today, ECB capital is about €11 billion, which is held by the national central banks of the member states as shareholders. The NCBs' shares in this capital are calculated using a capital key which reflects the respective member's share in the total population and gross domestic product of the EU. The ECB adjusts the shares every five years and whenever the number of contributing NCBs changes. The adjustment is made on the basis of data provided by the European Commission.

All national central banks (NCBs) that own a share of the ECB capital stock as of 1 February 2020 are listed below. Non-Euro area NCBs are required to pay up only a very small percentage of their subscribed capital, which accounts for the different magnitudes of Euro area and Non-Euro area total paid-up capital.

Reserves

In addition to capital subscriptions, the NCBs of the member states participating in the euro area provided the ECB with foreign reserve assets equivalent to around €40 billion. The contributions of each NCB is in proportion to its share in the ECB's subscribed capital, while in return each NCB is credited by the ECB with a claim in euro equivalent to its contribution. 15% of the contributions was made in gold, and the remaining 85% in US dollars and UK pounds sterling.

Languages

The internal working language of the ECB is English, and press conferences are held in English. External communications are handled flexibly: English is preferred (though not exclusively) for communication within the ESCB (i.e. with other central banks) and with financial markets; communication with other national bodies and with EU citizens is normally in their respective language, but the ECB website is predominantly English; official documents such as the Annual Report are in the official languages of the EU (generally English, German and French).

In 2022, the ECB publishes for the first time details on the nationality of its staff, revealing an over-representation of Germans and Italians along the ECB employees, including in management positions.

Independence

The European Central Bank (and by extension, the Eurosystem) is often considered as the "most independent central bank in the world". In general terms, this means that the Eurosystem tasks and policies can be discussed, designed, decided and implemented in full autonomy, without pressure or need for instructions from any external body. The main justification for the ECB's independence is that such an institutional setup assists the maintenance of price stability.

In practice, the ECB's independence is pinned by four key principles:

Operational and legal independence: the ECB has all required competences to achieve its price stability mandate and thereby can steer monetary policy in full autonomy and by means of high level of discretion. The ECB's governing council deliberates with a high degree of secrecy, since individual voting records are not disclosed to the public (leading to suspicions that Governing Council members are voting along national lines.) In addition to monetary policy decisions, the ECB has the right to issue legally binding regulations, within its competence and if the conditions laid down in Union law are fulfilled, it can sanction non-compliant actors if they violate legal requirements laid down in directly applicable Union regulations. The ECB's own legal personality also allows the ECB to enter into international legal agreements independently from other EU institutions, and be the party of legal proceedings. Finally, the ECB can organise its internal structure as it sees fit.

Personal independence: the mandate of ECB board members is purposefully very long (8 years) and Governors of national central banks have a minimum renewable term of office of five years. In addition, ECB board members are vastly immune from judicial proceedings. Indeed, removals from the office can only be decided by the Court of Justice of the European Union (CJEU), under the request of the ECB's Governing Council or the executive board (i.e. the ECB itself). Such a decision is only possible in the event of incapacity or serious misconduct. National governors of the Eurosystem's national central banks can be dismissed under national law (with a possibility to appeal) in case they can no longer fulfil their functions or are guilty of serious misconduct.

Financial independence: the ECB is the only body within the EU whose statute guarantees budgetary independence through its own resources and income. The ECB uses its own profits generated by its monetary policy operations and cannot be technically insolvent. The ECB's financial independence reinforces its political independence. Because the ECB does not require external financing and symmetrically is prohibited from direct monetary financing of public institutions, this shields it from potential pressure from public authorities.

Democratic accountability

In return to its high degree of independence and discretion, the ECB is accountable to the European Parliament (and to a lesser extent to the European Court of Auditors, the European Ombudsman and the Court of Justice of the EU (CJEU)). Although the accountability mechanisms are not enshrined in EU law, several practices were established following a resolution of the European Parliament adopted in 1998, which were informally agreed by the ECB, and incorporated into the Parliament's rule of procedure. In 2023, the European Parliament and the ECB made these accountability arrangements were made more formal by signing an exchange of letter.

The accountability framework involves five main mechanisms:

Annual report: the ECB is bound to publish reports on its activities and has to address its annual report to the European Parliament, the European Commission, the Council of the European Union and the European Council . The report is presented to the European parliament at the occasion of a specific hearing with the ECB's vice-president at the ECON committee.

Annual parliamentary resolution: in return, the European Parliament evaluates the past activities to the ECB via its own annual resolution on the European Central Bank's report (which is essentially a non-legally-binding list of resolutions). Since 2016, the ECB replies to the Parliament's suggestions in an annex to its annual report.

Quarterly hearings (known as the "Monetary Dialogue"): the Economic and Monetary Affairs Committee of the European Parliament organises a hearing with the ECB every quarter, allowing members of parliament to question the ECB president and enter into a discussion with him or her.

Written parliamentary questions: all Members of the European Parliament have the right to address written questions to the ECB president. The ECB president provides a written answer in about six weeks.

Appointments: The European Parliament is consulted during the appointment process of executive board members of the ECB. However the Parliament's vote is only consultative, and in practice, the Parliament's opinion – when negative – can be ignored by the European Council.

Transparency

In addition to its independence, the ECB is subject to limited transparency obligations in contrast to EU Institutions standards and other major central banks. Indeed, as pointed out by Transparency International, "The Treaties establish transparency and openness as principles of the EU and its institutions. They do, however, grant the ECB a partial exemption from these principles. According to Art. 15(3) TFEU, the ECB is bound by the EU's transparency principles "only when exercising [its] administrative tasks" (the exemption – which leaves the term "administrative tasks" undefined – equally applies to the Court of Justice of the European Union and to the European Investment Bank).

In practice, there are several concrete examples where the ECB is less transparent than other institutions:

Voting secrecy: while other central banks publish the voting record of its decision makers, the ECB's Governing Council decisions are made in full discretion. Since 2014, the ECB has published "accounts" of its monetary policy meetings, but those remain rather vague and do not include individual votes.

Access to documents: The obligation for EU bodies to make documents freely accessible after a 30-year embargo applies to the ECB. However, under the ECB's Rules of Procedure, the Governing Council may decide to keep individual documents classified beyond the 30 years.

Disclosure of securities: The ECB is less transparent than the Fed when it comes to disclosing the list of securities being held in its balance sheet under monetary policy operations such as QE.

Location

The bank is based in Ostend (East End), Frankfurt am Main. The city is the largest financial centre in the Eurozone and the bank's location in it is fixed by the Amsterdam Treaty. The bank moved to a new purpose-built headquarters in 2014, designed by a Vienna-based architectural office, Coop Himmelbau. The building is approximately 180 metres (591 ft) tall and is to be accompanied by other secondary buildings on a landscaped site on the site of the former wholesale market in the eastern part of Frankfurt am Main. The main construction on a 120,000 m2 total site area began in October 2008, and it was expected that the building would become an architectural symbol for Europe. While it was designed to accommodate double the number of staff who operated in the former Eurotower, that building has been retained by the ECB, owing to more space being required since it took responsibility for banking supervision.

Debates surrounding the ECB

Debates on ECB independence

The debate on the independence of the ECB finds its origins in the preparatory stages of the construction of the EMU. The German government agreed to go ahead if certain crucial guarantees were respected, such as a European Central Bank independent of national governments and shielded from political pressure along the lines of the German central bank. The French government, for its part, feared that this independence would mean that politicians would no longer have any room for manoeuvre in the process. A compromise was then reached by establishing a regular dialogue between the ECB and the Council of Finance Ministers of the euro area, the Eurogroup.

There is strong consensus among economists on the value of central bank independence from politics. The rationale behind are both empirical and theoretical. On the theoretical side, it's believed that time inconsistency suggests the existence of political business cycles where elected officials might take advantage of policy surprises to secure reelection. The politician up to the election will therefore be incentivized to introduce expansionary monetary policies, reducing unemployment in the short run. These effects will be most likely temporary. By contrast, in the long run, it will increase inflation, with unemployment returning to the natural rate negating the positive effect. Furthermore, the credibility of the central bank will deteriorate, making it more difficult to answer the market. Additionally, empirical work has been done that defined and measured central bank independence (CBI), looking at the relationship of CBI with inflation.

According to Christopher Adolph, the alleged neutrality of central bankers is only a legal façade and not an indisputable fact.

The crisis: an opportunity to impose its will and extend its powers:

– Its participation in the troika: Thanks to its three factors which explain its independence, the ECB took advantage of this crisis to implement, through its participation in the troika, the famous structural reforms in the Member States aimed at making, more flexible the various markets, particularly the labour market, which are still considered too rigid under the ordoliberal concept.

- Macro-prudential supervision : At the same time, taking advantage of the reform of the financial supervision system, the Frankfurt Bank has acquired new responsibilities, such as macro-prudential supervision, in other words, supervision of the provision of financial services.