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EMU and EU Governance

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  • Francisco Torres

    (Departamento de Economia e Gestão Industrial, Universidade de Aveiro)

Abstract

This paper argues that a shift from an intergovernmental form of governance to a supranational regulation form of governance, as is the case of EMU, may not only do away with the efficiencylegitimacy trade-off but also enhance the democratic quality and effectiveness of European governance in the monetary sphere. The emerging role of the European Parliament in enhancing the democratic accountability of decision-making in supranational regulation (monetary policy) may prove quite powerful with respect to avoiding such a trade-off and indeed improving efficiency, transparency and accountability in European governance. It is argued that the democratic accountability of governance in the EU increased very much as the direct result of the making of EMU, that is, of the democratic delegation of executive powers to the ECB by the European Council and the EU Council of Ministers. That democratic accountability has also been substantially enhanced thanks to the emerging (and still evolving) role of the European Parliament as a principal of the European Central Bank (ECB). That new role of the EP materialised because of the change in the nature of delegation, i.e. the initial principal (the Council) delegated to an agent (the ECB) in order for the agent to control its behaviour in regard to monetary policy. That led to a change in the assignment between agents and principals. The new principal (still in the making one could argue) has also allowed for increased participation in and deliberation on the discussions about the conduct of monetary policy by the ECB, contributing in this way to its greater transparency.

Suggested Citation

  • Francisco Torres, 2003. "EMU and EU Governance," Working Papers de Economia (Economics Working Papers) 03, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro, revised Oct 2003.
    • Handle: RePEc:ave:wpaper:032003
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    References listed on IDEAS

    as
    1. J. De Haan & F. Amtenbrink & S.C.W. Eijffinger, 1999. "Accountability of central banks: aspects and quantification," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 52(209), pages 169-193.
    2. Simon Hix, 2001. "Legislative Behaviour and Party Competition in the European Parliament: An Application of Nominate to the EU," Journal of Common Market Studies, Wiley Blackwell, vol. 39(4), pages 663-688, November.
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    More about this item

    Keywords

    Governance; supranational regulation; monetary policy effectiveness; accountability; delegation; principal-agent relations;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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    This paper has been announced in the following NEP Reports:

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