Tuesday, 4 November 2008

European Central Bank independence

This is one of the treaty provisions president Nicolas Sarkozy should read and remember, both as the acting president of the European Council and as the elected president of France.

We start to look at the European Union (European Community) treaty provisions in an expedited manner, presenting the current Article text, the Lisbon Treaty amendments and the consolidated text of the Treaty on the Functioning of the European Union (TFEU). Comments are kept to a minimum, unless discussion or other reasons precipitate us into a more lavish treatment.


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Article 108 (ex Article 107) of the Treaty establishing the European Community (TEC) sets out the independence of the European Central Bank (ECB), the national central banks and the members of their decision-making bodies (as in the latest consolidated version of the treaties, OJ 29.12.2006 C 321/88):

Article 108 TEC

When exercising the powers and carrying out the tasks and duties conferred upon them by this Treaty and the Statute of the ESCB, neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. The Community institutions and bodies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the ECB or of the national central banks in the performance of their tasks.

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Original Lisbon Treaty

In Article 2, point 93 of the original Treaty of Lisbon (ToL) the IGC 2007 amended Article 107 TEC and in point 94 it dealt with Article 109 TEC (OJ 17.12.2007 C 306/74):

In other words, there are no express amendments to Article 108 TEC.

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Renumbering

The TFEU table of equivalences confirms that Article 108 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 130 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII (OJ 17.12.2007 C 306/214).

(In the consolidated version of the Lisbon Treaty, OJ 9.5.2008 C 115, the Tables of equivalences start on page 361, but the ToL numbers have been omitted.)

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Consolidated Lisbon Treaty: TFEU

Article 130 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/104:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 2 Monetary policy

Article 130 TFEU
(ex Article 108 TEC)

When exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB and of the ECB, neither the European Central Bank, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body. The Union institutions, bodies, offices or agencies and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the European Central Bank or of the national central banks in the performance of their tasks.

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In the Treaty of Lisbon, the Statute of the European System of Central Banks and of the European Central Bank has become Protocol No 4 (OJ 9.5.2008 C 115/230), but the wording of Article 130 TFEU is faithfully reproduced.

Article 130 TFEU prohibits both taking and giving instructions.

Even after the mini-treaty, Article 131 TFEU requires the national legislation including the statutes of each national central bank to be compatible with the treaties and the ESCB Statute.

Independence of the national central bank is one of the admission criteria to the third stage of economic and monetary union (EMU), i.e. entering the Eurosystem. See Article 140(1) TFEU.


Ralf Grahn