24 April 2016

Is the European Central Bank Becoming a Central Bank for the People of Europe?

In February 2016, while David Cameron and the other EU-leaders were busy negotiating the terms of Britain’s membership of the Union, the European Central Bank (ECB) did something curious. It changed its self-description on its website from: the ECB “is the central bank for Europe’s single currency, the euro” to: the ECB “is the central bank for the euro area” and “of the 19 European Union countries which have adopted the euro.” The ECB, it seems, confines itself no longer to being the central bank of a free floating currency, defying and denying national specificities and territorial borders. Furthermore, its governmental activities are no longer limited to governing the currency: it claims to govern for the euro area as a central bank of the 19 euro countries.

Closely linked to this, the ECB changed its mission statement from “to serve Europe’s citizens by maintaining price stability and safeguarding the value of the euro” to “to serve the people of Europe by safeguarding the value of the euro and maintaining price stability.” While ‘Europe’ is in both cases an enigmatic reference point (is the UK included? Denmark? Hungary? Ukraine?), the change from ‘citizens’ to ‘the people’ indicates that the ECB sees itself as ‘serving’ not a collection of individual subjects (Europe’s citizens) but a collective entity (the people of Europe). Interestingly, central banks such as the Federal Reserve and the Bank of England invoke similar ‘masters’ in their self-descriptions: the Fed claims that it aims to provide “the nation with a safe, flexible, and stable monetary and financial system” and the Old Lady’s “mission is to promote “the good of the people of the United Kingdom by maintaining monetary and financial stability.”

The People and the Treaties

Citizenship and people- or nationhood are obviously linked. There are, however, important conceptual differences. In On the Citizen, Thomas Hobbes noted an important distinction between ‘citizen’ and ‘people’: “A people is a single entity, with a single will; you can attribute an act to it.” In contrast, Hobbes claims, “the citizens, i.e. the subjects, are a crowd.” The body of citizens understood as a crowd of individuals with certain rights, in other words, is not an entity and as such it cannot have a common will that is representable in public institutions. A people, on the other hand, is a political subject which exists in the representational relationship between the people and the offices of sovereign power.

This understanding of ‘people’ as the popular sovereign represented by the (Member) State is precisely that on which the Treaties are based. Indeed, the ECB’s formulation – ‘the people of Europe’ – is nowhere to be found in the treaties. The Treaties are careful to always use the term ‘people’ either as referring to a specific category of people – “inflow of people applying for asylum” (Article 78.2(g) TFEU), “participation of young people in democratic life” (Article 165.2 TFEU), etc. – or as in the more famous plural – “ever closer union among the peoples of Europe” (Preamble TEU and TFEU) and the Heads of State “DESIRING to deepen the solidarity between their peoples” (Preamble TEU).

The political importance of ‘peoples’ in terms of bringing the integration process forward seems also to have been recognized by the founding members of the EU’s predecessor, the European Economic Community. In the Treaty of Rome the founding states called “upon the other peoples of Europe who share their ideal to join in their efforts” (Preamble TEEC). In line with the notion of the State as a representative of the people, the popular sovereigns of other European states are thus called upon to exercise what John Locke called the ‘federative power’ and associate themselves with the integration project. However, by doing so the ‘peoples’ of the several states do not merge to become ‘the people of Europe’ but remain ‘the peoples of Europe’ in subsequent treaties. The ECB thus invokes a political subject that is absent from the EU’s legal basis, as for instance the German Constitutional Court has lamented time and again.

Becoming a ‘Real’ Central Bank

Disregarding the existing legal framework, the ECB could perhaps be said to invoke an anticipated popular sovereign of a European State in becoming. Perhaps this is the meaning of Mario Draghi’s strange metaphor of the bumblebee ‘graduating into a real bee’ in his famous ‘whatever it takes’-speech. Is the image of the ‘real bee’ intended to convey the message that the ECB sees itself becoming increasingly like a ‘real central bank’ – like the Fed and the Bank of England – embedded within the broader governmental apparatus of a state? Is the ECB staking its claim to represent a European popular sovereign in the making? Some of the institutional developments during the Euro Crisis – the Banking Union, the ECB becoming lender of last resort with the OMT programme, the ‘Golden Rule’ – certainly point towards a more centralized governmental structure when it comes to banking, monetary, and even budgetary policy. And indeed, another member of the Executive Board of the ECB, Benoît Cœuré, has claimed that the “notion that the euro is a currency without a state is … misguided. The euro is a currency with a state – but it’s a state whose branches of government are not yet clearly defined.” In the same speech Cœuré also invokes this elusive notion of ‘the people (of Europe)’ as both the political subject to whom the ECB is accountable and that which must be represented by le législateur européen. The institutional centralization of policy making at the euro area level thus seems to necessitate the invocation of a unitary, representable political subject.

These discursive shifts – from currency to territory, from ‘citizens’ to ‘the people’ – are linked to the profound transformations in the euro area governmental apparatus during the course of the Euro Crisis. In line with the centralization of governmental power, the ECB’s self-conception must change from being a technocratic institution, concerned with narrow technical issues relating to the management of the currency, to a public institution, concerned with contributing to the general government and welfare of a particular territory. The ECB thereby casts itself as an institution concerned with the salus populi broadly speaking. As such, the ECB seems to indicate that it is becoming more like a ‘real’ central bank, a ‘real bee’. Whether the ‘people’ or ‘peoples’ of Europe are convinced that the sweetness of the ECB’s honey justifies the pain of its sting is another matter.

SUGGESTED CITATION  Lokdam, Hjalte: Is the European Central Bank Becoming a Central Bank for the People of Europe?, VerfBlog, 2016/4/24, https://verfassungsblog.de/is-the-european-central-bank-becoming-a-central-bank-for-the-people-of-europe/, DOI: 10.17176/20160425-104213.


  1. Steven Case So 24 Apr 2016 at 16:31 - Reply

    Citing Thomas Hobbes this is a near miss. We are seeing here Leviathan at work.

    Who elected them? Who controls them? What is their accountability?
    And most importanly: Who benefits from their actions? The „people of europe“ fata morgana?

    The difference between the bumble bee and the bee are probably the 80 billion Euros per month that the ECBee pumps into financial products of all kind and quality. What would we say if 80 billion Euros per month of central bank money were spent on cars or sausages regardless of their quality? Fraud we would say.

  2. Jessica Lourdes Pearson Mo 25 Apr 2016 at 09:57 - Reply

    1) Who elected them?
    -National governments that are themselves elected by parliaments that are (suprise!) elected by you and me.
    2) Who controls them?
    -It is a widespread consensus that central banks are insulated from politics. Nevertheless, the ECB is controlled by the European Courts.
    3) What is their accountability?
    – The powers and instruments of the ECB are laid down in the TFEU and the ECB Statute and subject to court oversight.
    4) Who benefits from their actions?
    – The citizens of the Eurozone and, probably, the world economy.

  3. Steven Case Mo 25 Apr 2016 at 11:39 - Reply

    A true EU gospel, I suppose?

    1.) So who were his competitors in his election. There were none? Got the message.

    2.) Your consensus is somewhat broken with the ECB not only financing bankrupt governements but now starting to finance bankrupt companies.

    Where is the mandate to allow Draghi to turn into an economic God?

    There is none. Got the message.

    3.) And you think that this court has any oversight of the mess Draghi creates?
    If you have any idea how the ECB will EVER find a way out of price manipulation, Mr. Draghi will be delighted to answer your call.

    4.) Glad you were decent enough to write „citizens“ not „People of Europe“.

    If you see benefits in loosing your pension by ECB inflation and zero interest policies, you are certainly right.

  4. Jessica Lourdes Pearson Mo 25 Apr 2016 at 12:40 - Reply

    So you basically just don’t like Mr Draghi. Got the message.

  5. Steven Case Mo 25 Apr 2016 at 13:15 - Reply

    „So you basically just don’t like Mr Draghi.“

    Got the message completely wrong.

    I don’t like systems that put more and more power into ever fewer hands.

  6. Jessica Lourdes Pearson Mo 25 Apr 2016 at 20:05 - Reply

    …and for that reason you certainly protested loudly against the extensive powers of the Bundesbank in pre-Euro times…

  7. Weichtier Mo 25 Apr 2016 at 22:23 - Reply

    Somehow Mr. Draghi reminds me of John Law. https://en.wikipedia.org/wiki/John_Law_%28economist%29

  8. Steven Case Di 26 Apr 2016 at 14:25 - Reply

    You certainly remember why Pöhl resigned?

  9. Jessica Lourdes Pearson Mi 27 Apr 2016 at 09:31 - Reply


  10. Paweł Łapiński Mi 27 Apr 2016 at 15:16 - Reply

    Ok, I’ll try to act as devil’s advocate (which seems strangely natural, given Draghi’s slightly devilish look).

    1. The euro zone, not just the euro itself.

    Given the recent expansion of ECB’s tasks (#SSM, #SRM) there’s no point in pretending, that the ECB is there only to supervise printing money. The banking union clearly surpasses classic moteary policy.

    2. The people of Europe. This description includes all non-EU residents in the eurozone. ECB is their bank too, as they belong and contribute to the economy of euro. Following this line of argumentation, EU-citizens living elswhere are not of ECB’s concern. It’s the wallets, not the passports, that interest Mr. Draghi

    On the other hand, conflating Europe, EU, and the Eurozone never fails to get on my nerves. At least the central bankers should know better and stick to the facts and their mandate.

  11. Klaus Nolte Fr 6 Mai 2016 at 10:12 - Reply

    The whole fraud is now uncovered by Mr. Draghi himself: He declares that the problems caused by easy central bank money is „a symptom of challenges“. According to Draghi’s world „global excess of savings“ is the problem! „People of Europe“ that save money for their retirement and for their children are the economic crooks!

    No mentioning of the heaps of easy central bank money handed out to the fraudsters in the financial industry. No mentioning of the billions of bail out money payed by the public to „save“ the system relevant!

    And no, we have no inflation. Prices only get higher. And private property is getting unaffordable for ordinary people.


    Without any doubt this policy makes the rich richer and the poor poorer. Well done!

    Got the message?

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