The European Central Bank before the European Parliament: theory and practice after 10 years of monetary dialogue

Since its establishment in 1998, the European Central Bank (ECB) has come of age. During this period, its legal framework has been put to the test sufficiently to allow for a proper assessment of the working of this system in practice. This article focuses on the relationship between the ECB and the only directly democratically elected Community institution, that is the European Parliament (EP). In doing so, the authors are inspired by the well-established line of research in US academic writing on the relationship between the US Federal Reserve and Congress. What emerges from this analysis is that the relationship between the ECB and the EP in what has become known as the monetary dialogue has significantly matured over time. The focus of parliamentary scrutiny has shifted from the ECB's ability to maintain price stability, uncertainty about the Bank's general mission and discomfort with the level of transparency of its decision making process to more general discussions on economic policy. However, apart from the fact that the EP's instruments to discipline the ECB are limited, serious doubts can be raised as to the extent to which this dialogue actually amounts to an effective review of the performance of the ECB. The Treaty of Lisbon, if and when it comes into force, will not substantially alter the current practice.