The European Central Bank (ECB) - What is it?
What is the ECB strategy review?
While the European Central Bank’s mandate and key functions (such as the monetary financing prohibition) is defined by EU Treaty, to a large extent the ECB can still self-determine how it shall function and how to deliver on its mandate.
For example, the ECB can determine itself whether the exact level of the ECB’s inflation target should be around 2% (like today) or whether it should be around 1% or 3%.
Today, there is a great opportunity to revisit how the ECB works.
In 2020, the ECB President Christine Lagarde announced that the ECB will be starting a “strategy review” in order to re-evaluate whether the ECB’s strategy is still fit for the new challenges facing the EU economy today.
The last time the ECB made such a strategy review was in 2003, so it’s about time the ECB reflected on how best it can serve citizens! The ECB strategy review is happening as we speak, and will be concluded in September 2021 – right at the same time as the debate happening on this platform!
While the ECB’s strategy review will not result in changing the ECB’s mandate (which would require changing the underlying EU Treaty), it can still lead to important changes in the way the ECB interprets its mandate and fulfills its monetary policy. For example, it is expected that the ECB will modify its inflation target, and an intense debate is ongoing in the ECB on whether and how it should take climate change into account.
The ECB has also committed to involving citizens in the strategy review. A few months ago, citizens were invited to share their views in an online survey, and European NGOs representatives had the chance to discuss directly with Christine Lagarde during “ECB Listens” events (organised in October 2020). Multiple events were also organised by national central banks.
The European Citizens Bank Platform is an initiative by several NGOs who are convinced that citizens need to be even more involved in the future decision from the ECB.