Sylvie Goulard citée par l’Agence Reuters sur la nécessité d’accroître la légitimité démocratique dans la réforme de la « gouvernance économique »

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New EU economic powers raise accountability issues

1 nov. 2010, By Paul Taylor

PARIS (Reuters) - Who will watch the watchdogs?

New powers of economic governance and financial supervision gained by the European Commission and the European Central Bank as a result of the euro zone debt crisis raise awkward questions of democratic accountability and political legitimacy.
Under arrangements set to be enacted next year, the European Union executive will be mandated to review euro zone members' budget plans long before they go to national parliaments, to recommend changes and issue public warnings.
Brussels technocrats will also get new authority to monitor governments' broader economic policies, pinpoint emerging imbalances and loss of competitiveness, and recommend policy changes and, at the end of the line, call for sanctions.

The ECB, which cherishes its absolute independence from political control, will chair a new European Systemic Risk Board meant to provide early warning of emerging asset price bubbles and other sources of financial instability.
Its treaty mission to ensure price stability has expanded substantially during the financial crisis without an increase in the limited scrutiny it receives from the European Parliament. "The democratic legitimacy of all our processes of economic governance is THE big question -- not just of the ECB but of the euro zone," says Sylvie Goulard, a liberal French member of the EU legislature's economic and monetary affairs committee.

The EU is in a unique position because it has a federal central bank for the 16-nation euro area but no federal government, she argues. ECB President Jean-Claude Trichet presents an annual report to the directly elected European Parliament and briefs her committee regularly in question-and-answer sessions known as a monetary policy dialogue. It looks a lot like the governor of the U.S. Federal Reserve Bank testifying before Congress, but is not quite the same. The EU lawmakers do not have the same inquisitorial powers as senators, and the sessions are more softball than hardball. Nevertheless, Goulard believes the dialogue does add up to a satisfactory form of parliamentary scrutiny. She is far less happy with political accountability for the new powers being granted to the Commission and the Eurogroup of euro zone governments.

"This is a monstrous issue that isn't getting media attention. The European Commission, the president of the European Council and the French and German governments are all putting forward proposals for new powers of economic control, as if it was their sole responsibility, but parliament should have a full say in this," she said in an interview.
Although the EU's Lisbon treaty granted wider legislative powers to the European Parliament on these issues, as well as in allocating the bloc's annual budget, governments are horrified when lawmakers try to flex their new muscles.

To many leaders, notably in Britain, France and Germany, the Strasbourg-based assembly remains at most a second-rate body which lacks the democratic legitimacy of national parliaments that control the spending of taxpayers' money. The fact that turnout has declined at every European Parliament election since 1979 and is far below participation in national elections reinforces that feeling, even though governments agreed in the treaty to give it more power. As for the Commission, under the Lisbon treaty its president is elected by the European Parliament on the recommendation of EU leaders, who can decide by qualified majority. And lawmakers can fire the entire Commission, although not individual members. In the eyes of the big member states, the Commission lacks the democratic legitimacy to tell governments how to run their economic and fiscal policy.

That is why Germany and France agreed last week that a political decision by a weighted majority of goverments would be required before a country faces fines or mandatory deposits for breaching EU budget rules. Yet in the eyes of financial markets, the Commission is too prone to political influence and not independent enough. "Nobody trusts the European Commission. Not everybody trusts the ECB," says Leif Pagrotsky, a Swedish lawmaker and former minister with experience of supervising a central bank in a non-euro EU state.
"These institutions have fewer checks and balances than other institutions in democracies." Pagrotsky argues that the ECB's ever expanding role beyond monetary policy requires more parliamentary scrutiny. With wider responsibility for macroprudential supervision, international cooperation and working with the International Monetary Fund to negotiate fiscal adjustment programmes for countries like Greece, "the ECB is getting pretty far away from an institution with a narrow monetary policy focus," he said.

Goulard and Pagrotsky both accept the principle that the central bank should be totally independent of politicians when setting interest rates. "But the more it is given the exercise of public power, the less logical is the lack of democratic supervision," Pagrotsky said. "Who is accountable for failure? And to whom?" (editing by John Stonestreet)