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ECB has the power to make regulations, take decisions, make recommendations and deliver opinions to the extent necessary to implement its tasks and carry out its responsibilities within its area of competence, monetary policy.17 The ECB is also entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations stemming from its regulations and decisions. 18 The regulations and decisions enacted by the ECB enjoy the status of Community law and may be invoked by interested parties in national courts assuming that the conditions for direct effect are met.
Article 34.1 of the Statute has been formulated in the same manner as Article 249 EC establishing the legislative powers of the Council the difference being that Article 34.1 does not mention directives. Unlike Article 249, Article 43.1 also defines the field in which regulatory power can be implemented.19 The list of different types of norms the ECB can adopt demonstrates political will to restrict its regulatory power, on the one hand, and the rather large extent of its competence, on the other, considering that the Bank is able to adopt directly applicable legal acts.20 In most cases, however, the ECB is only able to implement its powers in individual cases within the limits set by the EC Treaty and further defined by the Council.21 The Bank can decide to publish its decisions, recommendations and opinions,22 which should be encouraged in order to increase transparency. The ECJ has declared on several occasions23 that Article 249 is not exhaustive and established that EC organs can adopt additional acts to those mentioned therein. The Court is likely to implement Article 34 in a similar manner.24
The difference between the legislative competence of the ECB and that otherwise implemented within the Community is that the Bank uses its powers independently from the other EC organs and national parliaments.25 The basis for the inter-institutional relations of the Bank is Article 108 EC which establishes that neither the ESCB, the ECB, or a national central bank nor any member of their decision-making bodies, shall seek or take instructions from Community institutions, governments or any other bodies.26 Thus, the Bank has a wide margin of appreciation when it comes to judging between different monetary policy measure alternatives.27 This is motivated by the need to make monetary policy decisions in the interests of the whole of the Monetary Union. The ECJ has, nevertheless, jurisdiction to review the legality of the acts of the ECB on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the EC Treaty or misuse of powers.28
Article 113 EC places the leadership of the Bank under some obligations to report to the other EC organs.29 Thus, according to Snyder, the accountability of the ECB stems less from the (limited) extent to which it is directly answerable to the Community's political institutions or national governments than from the fact that the Bank is locked into a relatively complex institutional structure and set of inter-institutional relations.30 Goodhart states, however, that the reports of the ECB are only examples of ex-post justification and without a clear Treaty-based definition of price stability it is hard to hold the ECB accountable for its actions. Subsequently, it is almost impossible for outsiders to demonstrate that the ESBC is mistaken in its judgements, reflecting that the System is carefully protected against any criticism by its independence.31
In the last instance National Parliaments are responsible for the provisions in the Treaty regulating the competence of the Bank. In other words, the `rules of the game' are decided upon according to traditional democratic procedures at the national level, but the `game' is delegated to the Central Bank, and since national parliaments are in a position to alter the legislation, the ECB remains under their ultimate control.32 Article 108 EC establishes that the ECB shall not seek or take instructions from any government of a Member State.33 This means that the ECB is independent in relation to political decision-making both at the European and at national levels. Subsequently, the fundamental problem with the Bank's political independence is the discrepancy between those defending its independent status and those demanding greater legitimacy and stricter arrangements to guarantee the Bank's accountability. In many observers' opinion there is a fundamental trade-off between central bank independence and accountability, in that pure independence rules out accountability and substantial accountability rules out independence.34
Monetary policy in the traditional, national sense includes balancing the parliament and the government on the one hand and the central bank on the other.35 In the Union the Central Bank has no equivalent counterpart. The independence of the ECB is further strengthened by the fact that it does not interact with just one but several national governments which also means that political pressure remains weaker than in a national environment.36 It is practical for the members of the Executive Board that both the objective and accountability of the ESCB have been left blurred and fuzzy as the solution leaves a wide margin of appreciation. But for the rest Goodhart suggests that part of the Treaty and the Protocol is deficient. 37
Even if the ECB's policies based on price stability proved profitable for all members of the society this would not frustrate the need to consider the relationship between the implementation of the Bank's powers and democracy38 as a way to create greater legitimacy. The same question applies to the effect of the Bank's law-making powers in relation to the rights of individuals. The need is further strengthened by the fact that the ECB has in some cases, when allowed to choose its own strategy, sacrificed some accountability in exchange for other gains.39 Focusing on democracy and accountability as a matter of principle means that the true impact of the ECB's acts is of minor importance. Thus, assuming that legitimacy can be established only through profitable results requires less from the other categories of legitimacy, namely procedural and substantive.40
The ECB is, in the same manner as the other EC organs, bound to respect the rights of individuals in its actions. Nevertheless, even if the ECB has the competence to adopt directly applicable legal acts those acts have only a very limited direct effect on individuals. When considering their indirect effect, however, the influence of the Bank is far more significant.41 The role of the ECB is also greater in respect for undertakings, which can become addressees for its legal acts.
Regulations adopted by the Bank can set statistical requirements and requirements regarding minimum reserves on undertakings, credit institutions and other relevant instances.42 The ECB is also entitled to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions.43 The right to review the acts of the Bank held by the ECJ has so far not been actualised. The Court has, however, previously stated that the rights of individuals within the monetary policy are extremely limited in relation to the State.44 Consequently, it is not surprising that in general, attempts to deduce enforceable rights from the Text of the Treaty in the field of capital have failed.45 Furthermore, it is difficult to imagine circumstances in which an individual interest would proportionally outweigh a Community measure claimed to infringe on fundamental rights.46
According to the Treaty, the ECB has an objective that has to be given absolute priority. This means that in case of confrontations between price stability on the one hand and fundamental rights and the principle of democracy on the other, the latter take second place, even if the Union in other fields highlights the importance of the full implementation of human rights.47 According to the liberal theory as explained by Arndt, price stability can be regarded as a value that stands above democracy. Thus, central bank independence creates means to protect the fundamental right of citizens to price stability. Inflation means a weakening of this right and an infringement on citizens' financial position, which the state is under an obligation to protect.48 Placing the "right to price stability" among other fundamental rights sounds, however, slightly exaggerated even if the objective has a connection with the realisation of a number of rights, mainly social.
The ECB has powers that do not automatically belong to the area of competence of every central bank. Thus, these powers should be motivated especially carefully. These include the Bank's law-making competence and the competence to impose fines or periodic penalty payments on undertakings for failure to comply with obligations under its regulations and decisions49 the legality of which has not received much attention. ECB decisions may also require an undertaking to submit to an infringement procedure.50 In this case the Council of the ECB underlines the need for an effective conduct of a thorough investigation of any alleged infringement, while at the same time providing for a high level of protection for the rights of defence of the undertaking concerned and the confidentiality of the infringement procedure.51 The ECB regulation also establishes a simplified procedure for minor infringements.52
Within the infringement procedure it is possible to draw parallels to powers of the Commission to impose sanctions under regulation 17/62 in the field of EC Competition law.53 In determining the sanction the ECB shall be guided by the principle of proportionality54 and the nulla poene sine lege rule so that all its powers are set down by law.55 These factors may allow the Bank to make careful assessments in imposing sanctions, or, alternatively, allow it to adopt a heavy-handed approach intent on reinforcing its credibility.56 The powers of the Commission with respect to undertakings in the field of competition law have been criticised by saying that they set aside the doctrine of separation of powers and in practice allow the Commission to act as law-maker, supervisor and judge. The same worrying quality can now be re-found with respect to the ECB as its competence indicates great unity of powers. Furthermore, the possibilities of the undertakings to defend themselves against such a sovereign power within the monetary policy are very limited.
The investigatory and pecuniary powers of the Bank are a part of an overall trend towards a Community system based on sanctions, which may be classified an instrument of droit repressif. Sanctions are seen as a way to ensure uniformity and effectiveness.57 Still, the competence of the ECB within the area gives reason to be worried for at least two reasons. Firstly, its competence is extensive and can endanger individual undertakings' status. Secondly, it is possible to note small but observable differences between the case law of the European Court on Human Rights and the ECJ concerning the rights of undertakings when determining whether a breach has occurred.58 This can also be seen as a sign of the ECJ not showing as much respect for the rights of undertakings so far.
Geoffrey Edwards argues that the European people need to have more than a minimal knowledge of the European institutions, procedures, norms and values in order to accept them. Thus, openness and transparency are an integral factor in the process of legitimisation and the EU must be seen as more efficient, democratic and effective, both in terms of policy-making and policy implementation.59 The same applies even for the legitimisation process of the ECB. According to the European Ombudsman, public access to documents should be the core rule and all exceptions implemented restrictively.60 Still, given while the EMI was active, the recommendations of the Ombudsman only concerned the administrative documents of the ECB predecessor. All documents connected with monetary policy could remain confidential unless the Council decided otherwise.61 The ECB has confirmed that the same limitation is applicable to its archives.62 For the time being even all voting records and motivations remain confidential.63
Restrictions on transparency contradict the idea of democracy by hindering the right of the people to have access to governmental acts and their entitlement to use such information to expose possible incidents of public misconduct or maladministration.64 The independent status of a central bank is usually motivated by the need to lead the market in an unprecedented way. Thus, the democratic legitimacy of the monetary policy within the EMU framework cannot be realised on the basis of traditional, democratic methods but through a combination of different supervisory and accountability arrangements65, which contribute to creating legitimacy. Transparency plays a central role in these arrangements.
The ECB has chosen to arrange press conferences, release a series of publications, publish results of its research and update a web site of its own.66 Bringing in the defence side, according to the President of the ECB, Dr Willem Duisemberg, the EC Treaty contains various provisions to ensure the democratic accountability of the ECB. One of these cornerstones is the presentation of the Annual Report to the European Parliament and the Council, others include a number of other reports and its information policy, an area where even the internet is being actively used.67 In addition, the Bank has strengthened its relationship with the European Parliament which, according to the EC Treaty, can hold general debates on the basis of the ECB reports.68 In practice the President has regularly attended hearings organised by the Committee on Economic and Monetary Affairs and answered questions asked by the Parlamentarians, welcoming their delegations to its premises in Frankfurt.69 According to Duisenberg, these practices secure the Bank's ability to stand in comparison with other Central Banks in the field of transparency.70 This is undoubtedly true. The question is, however, whether the Bank can stand in comparison with other organs with a law-making competence? The answer to this question must be negative.
The freedom of action of each and every Community institution is restricted. The question of where lines are drawn has in later years grown in significance as the institutions today have varying jobs, both executive and law making.71 The same applies even for the ECB. According to Article 8 EC the ECB shall act within the limits of the powers conferred upon it by the Treaty.72 The ECJ shall review the legality of its acts73 and also establish failure to act.74 The Court also has unlimited jurisdiction over the review of final decisions of the ECB whereby a sanction is imposed75 and competence to give preliminary rulings concerning the acts of the Bank.76 All decisions adopted by the ECB take direct effect in all Member States and therefore it is possible for undertakings and private individuals who consider themselves to have suffered from a measure infringing on their rights as established by an ECB act to claim damages before a domestic court.77
In practice, however, the picture is not as pretty as it seems. In Dunnett's words, the "scope for challenge to an act of the ECB is as slight as the discretion accorded to that body is wide" and "as long as the ECB interprets the concept of price stability reasonably, it will be difficult to allege that the ECB has wrongly defined its objectives and is misusing its powers". According to Dunnett, it will be even harder to assert that the means adopted by the ECB are disproportionate to the objective.78 Thus, it is doubtful whether a Member State or an individual, even one especially affected by any particular ECB measure, would receive an effective judicial remedy.79 Furthermore, there is no provision that would permit states or individuals to claim that they have been affected in a discriminatory manner by an act of general application.80
In addition, the ECJ has established that the Community cannot be liable for damage suffered by individuals as a consequence of a Community measure unless a sufficiently flagrant violation of a superior rule of law for the protection of the individual has occurred.81 The applicants also need to demonstrate a comparably significant economic interest in the outcome of the complaint procedure.82 In general, judicial review in relation to a central bank is very unusual.83 Louis argues, nonetheless, that in one way the existence of the possibility to judicial review reflects the will of the authors of the Treaty to insert the ECB fully in the EC legal order. Therefore, it is an important form of accountability, which in some way complements the political dialogue with the European Parliament and compensates for the technocratic features of the Bank.84
Despite the Treaty based power of the ECJ to review the acts taken by the central bank, the competence might be difficult to exercise, given the inherent complexities of monetary policy, despite the fact that price stability in itself is a sufficiently simple aim.85 Thus, the ECJ can be expected to make a relatively moderate review of the acts of the Bank, in the same way as it has been careful to state that the other organs have acted beyond their competence.86 This is partly due to the Bank's large margin of discretion in the field of monetary policy, partly to the fact that the Judges do not have the expertise within monetary policy that would be needed in order to be able to establish that the Bank is guilty of a failure to act or has taken the wrong decision. Therefore, the lack of expertise in the monetary field leads in one way to only nominal right to review. Claims of invalidity based on infringement of a procedural requirement or serious misconduct of a Member of the Governing Council might be the only clear-cut cases where the Court would have the competence to act.
Furthermore, the requirement of a serious damage results in the extreme difficulty of proving that the act of an organ, especially that of a central bank, caused damage of that description. Even if the failure of the Bank to meet its main objective, price stability, would result in the weakening of the possibilities of an individual to enjoy many fundamental rights, it is extremely unlikely that anyone could ever get the Bank to accept the responsibility for that. When seen as a matter of principle, the question is even more fundamental as it is difficult to understand why such new instances that do not function on the basis of the principles of accountability and responsibility for one's results are created. On the other hand, considering the results of this non-democratic government the problem is smaller as the status of the individual remains almost untouched if only its direct effect is considered.
The role of the ECB in relation to undertakings is more comprehensive
than in relation to private individuals as they are touched by the powers of
the ECB in a more direct way. This can also be seen as a rule of law question
as the norms adopted by the Bank are not necessarily public and knowable to
all. Furthermore, whether laws are binding on everyone including the state (or
the EU) and its officials is in the case of the ECB not sufficiently
effectively controlled. The right to judicial review by the ECJ can be seen as
some kind of a guarantee of the rule of law as it means that the Bank does not
enjoy absolute legal independence. Still, even the acts of the ECJ have been
criticised and fundamental rights within EC law must be seen as an
underdeveloped area. The priority of economic efficiency might also indicate
that other rights of the individual in relation to EU organs are not as
effectively protected. The same applies to the relationship between the ECB and
an individual. Therefore it is of utmost importance to consider the
relationship of the Central Bank to democracy and its possibilities to function
in a legitimate manner.
17 Art. 110 EC and Art. 34 of the Statute. The legal acts given by the ECB have the same status as the norms adopted by the other EC organs.
18 Art. 110.3 EC.
19 The ECB can even undertake actions in the private law field, such as enter agreements, e.g. acquire or dispose of movable and immovable property and be a party to legal proceedings (Art. 9.1 of the Statute). These acts, despite of being of a legal nature, are not covered by Article 34 which only establishes the regulatory powers of the Bank.
20 Louis, Jean-Victor (1998), p. 8.
21 E.g. in the
case of statistics, minimum reserve requirements, prudential control and
sanctions in which the Council shall, in accordance with Article 42 of the
Statute, define in detail the competence of the Bank. These Council regulations
were adopted in November 1998.
Geographically the
Bank has general law-making powers as it can adopt legal acts that have direct
effect in the whole of the Euro area. Regarding the substance the Bank has not,
however, any general law-making power as its competence is limited to a
specific area, the monetary policy. Subsequently, the ECB can adopt binding
acts only in relation to individuals coming within its area of competence.
The ECB is even required to act in accordance with
the principle of an open market economy with free competition, favouring an
efficient allocation of resources, and in compliance with stable prices, sound
public finances and monetary conditions, and a sustainable balance of payments.
Article 105(1) EC. See also Snyder, Francis (1994), p. 80.
22 Art. 110 EC.
23 E.g. 90 and 91/63 Dairy Products.
24 The future will show whether Article 34 can even be seen to cover directives.
25 Louis, Jean-Victor et al (1995), p. 74. The law-making process within the Council includes indirect democratic control through national parliaments. This is not the case with the ECB.
26
According to Smits this does not exclude informal contacts between
individual members of the Governing Council and other EC organs or
representatives for the Member States. Smits, René (1997), p.
172. Similar contacts can exist between a national central bank and the
government of that Member State as the idea has not been to isolate the Central
Bank but to give it the opportunity to make decisions independently. See even
Martenczuk, Bernd (1998), p. 174.
This part
of the status of the ECB is somewhat similar to that of the Commission but the
Bank must be considered an even stronger and independent institution. Extensive
independence is also required from the members of the Commission who, in the
general interest of the Community, shall be completely independent in the
performance of their duties. According to Article 213(2) EC they shall refrain
from any action incompatible with their duties. Independence in relation to
other EC organs is, however, not required.
27 Louis, Jean-Victor et al. (1995), p. 75.
28 According to Article 230 EC the legality of all measures adopted by the ECB can be reviewed by the ECJ.
29 The same article also gives the Presidents of the Council and the Commission the right to participate in the Governing Council meetings. See also Art. 15 of the Statute.
30 Snyder, Francis (1994), p. 80.
31 Goodhart, Charles (1993), p. 237. According to von Hagen disciplinary measures and pressure on the ECB would require joined efforts by the Commission and the Council which means that the possibilities to control the ECB are a lot more restricted than those existing with respect to national central banks. Therefore the only way for a Member State to truly make ECB accountable for its actions would be threatening to leave the Monetary Union. Von Hagen, Jürgen (1997), p. 18-19. The EC Treaty does not have specific regulations concerning such a situation. In practice this would take place through an amendment of the EC Accession documents of the Member State in question. This has happened once, in 1985 when Greenland left the Community. The Greenland Treaty has been published in OJ L 29, 1.2.1985.
32 Gormley, Laurence and de Haan, Jakob (1996), p. 112. According to Gormley and de Haan the European Parliament should logically be responsible for the legislative framework of the ECB, at least by way of co-decision. Idem. This would also shorten the distance between the citizens and the Bank.
33
Arndt has used the concepts autonomy and independence meaning
"nicht-weisungsgebunden", not bound by instructions. Arndt, Hubertus
(1996), p. 212. Arndt underlines that even if the Bank shall not take
instructions this does not mean that it could operate independent of law.
Idem. , p. 215.
Another aspect of
independence is the need to convince the financial markets of the fact that
neither the ECB nor any EC organ implicitly guarantees the obligations of
Member States. Padoa-Schioppa, Tommaso (1994), p. 183.
One should, however, keep in mind that there is no agreed basis
for measuring the extent to which central banks are independent from government
control. In general a central bank is considered independent if it is free from
government intervention, has the full range of monetary instruments at its
disposal and is able to use them without government restriction. Elgie, Robert
(1998), p. 54-56.
34 E.g. Brentford, Philip (1998), p. 108. To enable the ECB to perform successful monetary policy two conditions are necessary: the ECB should be as autonomous as possible and there should be precommitments of the ECB policy, which enable the private economic agents to build up rational expectations. Kirchgässner, Gebhard (1994), p. 329.
35 After Maastricht Treaty monetary policy is highly centralised but other policies decentralised, thereby disclosing a lack of counterpart relations. Hoffmeyer, Erik (1992), p. 39. Apparently it seems to have been easier for national decision-makers to delegate competence within areas in which they have not previously had some than to delegate powers they are in the habit of implementing themselves.
36 Von Hagen, Jürgen (1997), p. 17. According to von Hagen the situation with only one government or national parliament could mobilise greater political pressure. Instead ECB has as partners the European Parliament and the Ecofin Council which both represent national interests, and the European Commission, which represents a vaguely defined Community interest. Other governments insisting on greater monetary discipline balance attempts to pressure from one national government. Idem.
37 Goodhart, Charles (1993), p. 238. According to Goodhart under the Treaty some flexibility is achieved by being careful to fudge the question of how exactly price stability shall be measured, but that same fudge blurs the accountability of the ESCB.
38 Scheinin, Martin (1997a), p. 3. According to Scheinin, the independence of the Central Bank is seen as means to create economic flourishing. Democracy, again, is an axiomatic value, which does not need to be motivated through its results. Therefore the economic benefits do not remove the need to evaluate the actions of an autonomous central bank also from the democratic point of view. Even if monetary policy based on price stability would benefit all members of the society and would in this sense be politically neutral, the ESCB means still implementing power. All use of powers must be considered from the democratic point of view. Idem.
39 E.g. regarding monetary transmission mechanisms. See Castrén, Olli (1999), p. 7.
40 E.g. a government that works in a fully illegitimate manner from the democratic point of view but still guarantees the citizens a high living standard is probably not questioned by them. Obradovic names as one of the problems when solving the Union's legitimacy problem the concept of "utilitarian support". The main point of this thesis is that the Union gains its legitimacy through the appeal to the economic welfare it may provide. However, an emphasis on the material rewards of Union co-operation is insufficient to guarantee sustained legitimacy. Obradovic, Daniela (1996), p. 198-199. According to Brentford, effectiveness may justify the creation of the Bank on the output side of democracy. Still, the deficiencies on the input side and the absence of a subjective constitution should not be overlooked. Brentford, Philip (1998), p. 110.
41 A wide
interpretation of the most central Human Rights conventions, especially the
European, considering it to be the most relevant in this context, can
contribute to the discussion on the ECB and fundamental rights. According to
the ECHR Art. 13 "everyone whose rights and freedoms are set forth in the
Convention are violated shall have an effective remedy before a national
authority notwithstanding that he violation has been committed by persons
acting in an official capacity". According to Art. 8(1) everyone has "the right
to respect for his private and family life, his home and his correspondence"
and according to Art. 6 is also "entitled to a fair and public hearing within a
reasonable time by an independent and impartial tribunal established by law".
According to Art. 1 of the first Additional
Protocol to the same Convention "every natural or legal person is entitled to
the peaceful enjoyment of his possessions. (...) The proceeding provisions
shall not, however, in any way impair the right of a State to enforce such laws
as it deems necessary to control the use of property in accordance with the
general interest or to secure the payment of taxes or other contributions or
penalties."
In addition, according to Art. 25 of
the UN Convention on Civil and Political Rights, every citizen shall have the
right and the opportunity to take part in the conduct of public affairs,
directly or through freely chosen representatives.
42 Concerning macroeconomic statistics is it reasonable to assume that ECB will mainly make use of the statistical information the national central banks collect. According to Art. 285 (2) EC the production of Community statistics shall not entail excessive burdens on economic operators. It is, however, the ECB who decides what makes an excessive burden.
43 Art. 110 EC and Art. 35 of the Statute.
44 Schlüter v. Hauptzollamt Lörrach, p. 1161. According to the Court it is the duty of the Community and of Member States to co-operate in and to ensure the creation and maintenance of conditions for a single economic market. According to the Court the obligations for Member States listed in Article 5 EC (now Article 10 EC) and in Article 107 EC (now Art. 108 EC) cannot create legal consequences of which parties might avail themselves in court. Idem. As the Community now has exclusive competence within the field of monetary policy, one can assume that the Community now has replaced the State.
45 Mann, F.A. (1992), p. 502. The question whether ECB is bound by Art. 2 EC establishing the objectives of the Community has also been discussed. According to Zilioli and Selmayr, for example, the ECB is not one of the Community organs but a separate and autonomous entity which, though linked to the Community by its task to define the monetary policy of the Community and a number of co operating procedures, rather constitutes a "Community of its own" or a "Community within the Community". Zilioli, C and Selmayr, M (1999), p. 285. This view has been motivated e.g. by the fact that third countries recognise the ECB's legal personality, which in international law is the constitutive element of international legal personality. Idem. In this case Art. 2 would not directly bind the ECB but only by the specific Articles regulating the EMU which would widen the scope of its activities significantly. Torrent, Ramon (1999), p. 1230 (footnote).
46 O'Leary, Siofra (1995), p. 544.
47 Koskenniemi points out that a political culture that officially insists that rights are foundational, inalienable or basic but in practice finds that they are not becomes a culture of bad faith. Accordingly, the rights-rhetoric is not as powerful as it claims to be. Koskenniemi, Martti (1999) pp. 99-100.
48 Arndt, Hubertus (1996), p. 217. This view corresponds to the traditional German view. The requirement of price stability existed in German law already before it was introduced to the EC Treaty. The requirement was widened at Germany's request to cover the whole of the Union by giving the ECB the main objective of maintaining price stability. Smits, René (1994), p. 123.
49 Council Regulation (EC) No 2532/98 concerning the powers of the ECB to impose sanctions; ECB Regulation (EC) No 2157/1999 on the powers of the ECB to impose sanctions (ECB/1999/4). ECB's powers also include e.g. supervision of credit institutes, payment systems and minimum reserves.
50 According
to art. 3(2) of the Council Regulation (see footnote 49), in carrying out the
procedure the ECB or the national central bank shall have the right to require
the submission of documents, examine the books and records of the undertaking,
take copies or extracts from such books and records and obtain written or oral
explanations. In case an undertaking obstructs the conduct of the procedure the
participating Member State shall afford the necessary assistance including
ensuring access to the premises of the undertaking.
According to Smits, irrespective of the findings on this
point, the safeguards deriving from the pan-European law on human rights should
be upheld and these procedures should only be implemented within the limits set
out by Art. 6 of the ECHR according to which "in the determination of his civil
rights and obligations or of any criminal charge against him, everyone is
entitled to a fair and public hearing within a reasonable time by an
independent and impartial tribunal established by law". These judicial
safeguards remain also in relation to an undertaking and when determining what
reporting requirements can be placed on it. Smits, René (1997),
p. 220.
51 ECB Regulation (EC) No 2157/1999 on the powers of the ECB to impose sanctions, ingress point 8. According to point 13, the ECB may decide to publish its final decisions regarding sanctions or any information relating to them for the purposes of enhancing the transparency and the effectiveness of its powers to impose sanctions. In view of the specific features of financial markets, publication of a decision to impose a sanction shall be an exceptional measure which shall only be taken by the ECB after due consideration of the circumstances of the specific case.
52 Art. 10. According to the Article, in the event of a minor infringement, the Executive Board of the ECB may decide to apply a simplified infringement procedure. The sanction to be imposed under this procedure shall not exceed EUR 25000.
53 Council Regulation 17/62 implementing Articles 85 and 86 EC, (1962) OJ Special edition No 204/62 p. 87 as amended. The possibility is mentioned in the ingress of the ECB Regulation of the right of the ECB to impose sanctions and in Brentford, Philip (1998), p. 97.
54 Council Regulation of the powers of the ECB to impose sanctions, article 2(2).
55 The limits and conditions are set down by the Council under the procedure laid down in article 42 of the Statute. See also Article 34.3 of the Statute. The upper limit for the fines imposed by the ECB shall be EUR 500 000 and for periodic penalty payments EUR 10 000 per day of infringement. This means that the sums imposed by the ECB are considerably smaller than those imposed by the Commission within Competition law. Within Competition Policy was the highest fine imposed on an undertaking (Tetra Pak) until 1998 75 million ECU. In January 1998 a fine of 102 million was, however, imposed on Volkswagen. In a cartel case Combureau was imposed a fine of 248 million ECU in 1994. The sums within the Competition policy are therefore much higher. It is worth noting, however, that both the Court of First Instance and the ECJ can review the decisions of the Commission.
56 It is arguable, however, whether such credibility would be achieved. Brentford, Philip (1998), p. 98.
57 Idem., p. 97.
58 This is the
case e.g. concerning the interpretation of Article 8(1) in the European
Convention on Human Rights establishing the right to private and family life.
According to the ECJ the Article establishing cannot be seen to cover business
premises, see Cases 46/87 and 227/88 Hoechst AG v. Commission, para 18.
According to the Human Rights Court, the Article covers some business premises
and e.g. in case Niemiez v. Germany the Court established that the
article covers a lawyer's office. See also cases Funke, Crémieux and
Mialhe v. France.
Furthermore, it is unclear
whether the ECJ would see ECB's fines or other pecuniary measures as amounting
to a "criminal charge" within the meaning of Article 6. Smits,
René (1997), p. 220. The European Court on
Human Rights has, however, discussed the concept "criminal charge" in several
cases and established that disciplinary measures fall outside of the Article.
See e.g. Danelius, Hans (1998), p. 136-138 and case Engel v. The
Netherlands where the Court stated that relevant considerations when
determining whether a measure falls under the concept criminal charge include
the nature of the offence charged, the sanction imposed and the group to whom
the offence applied. In the case Weber v. Switzerland where Weber had
been fined 300 Swiss francs for breach of confidentiality of Court proceedings
the Court affirmed the criteria set in Engel and concluded the fine fell under
Art. 6. Case Demicoli v. Malta concerned a fine given for breach of
privilege under ordinances governing procedure in Parliament. The fine was seen
to fall under Article 6. Case Öztürk v. Germany involved an
offence, which was not qualified under German law as criminal but as
"regulatory" offence (Ordnungswidrigkeit). The Court established that it still
was an offence including the possibility to impose a sanction, which confers a
criminal character on the proceedings, and therefore it was covered by Art.
6.
59 Edwards, Geoffrey (1998), p. 139.
60 Annual Report of the European Ombudsman 1996.
61 Annual Report 1996, p. 86.
62 ECB's decision concerning public access to documentation and the archives of the ECB, preface (OJ L 110, 28.4.1999). The public has access to documentation and the archives of the ECB of the ECB only with regard to administrative documents Furthermore, according to Article 4 of the Decision, access to an administrative document shall not be granted where its disclosure could undermine the protection of the public interest, of the individual and of privacy, the protection of copyright and of commercial, banking and industrial secrecy, the protection of the ECB's financial interests or the protection of confidentiality. With the protection of the public interest is meant in particular public security, international relations, monetary and exchange rate stability, court proceedings, inspections and investigations. Therefore the scope of exceptions is rather wide and is also determined on the first hand by the ECB itself.
63 According to Article 23 of the Rules of Procedure of the ECB (OJ L 125, 19.5.1999), all proceedings of the decision-making bodies, committees or working groups and all documents drawn up by the ECB shall be confidential unless the Governing Council decides otherwise.
64 Chryssochoou, Dimitris N. (1998), p. 69. According to Chryssochoou, "closed government" also deprives citizens of the possibility to acknowledge on grounds on which those in power decide issues of public interest. Thirdly, it questions the foundations of popular legitimacy, in that citizens cannot exhibit their confidence in the procedures that bring about binding decisions if these procedures remain hidden from public scrutiny. Fourth, it also challenges the idea of constructive public dialogue since the demos is no longer in a position to follow the debate on secretively produced legislation. Finally, it discredits the common defining property of all democratic political systems, namely that he demos is empowered to participate as fully as possible in the actual process of government. Idem.
65 Scheinin, Martin (1997b), p. 173.
66 According to the Annual Report 1998 of the ECB, the aims of the ECB's external communication policy are to foster the transparency and clarity of its policy objectives, to inform the public about its tasks and actions, thereby enhancing its effectiveness, credibility and efficiency, and to contribute to the accountability of the Eurosystem without disregarding the statutory provision relating to the confidentiality of the proceedings of the Governing Council (p. 101).
67 Art. 113(3) EC ; Duisenberg, Willem, speech in the European Parliament 26.10.1999.
68 Art. 113(3) EC ; Duisenberg, Willem, speech in the European Parliament 26.10.1999.
69 Duisenberg, Willem, speech in the European Parliament 26.10.1999.
70 Idem. According to another Executive Board Member, Professor Otmar Issing, the set of information that leads to monetary policy decisions cannot simply be summarised in a few numbers or charts. Whatever the score currently attributed to the ECB in terms of transparency, it would not be significantly modified by the publication of an internal forecast. Professor Issing regards the practice with President Duisenberg summarising and explaining the decisions of the Governing Council and being available for extensive questioning as highly transparent. According to him the lack of publication of individual voting records does not undermine the accountability of the ECB as accountability according to Issing only refers to the need to justify and accept responsibility for decisions taken. Speech at the Royal Institute of International Affairs. For these two, see internet material.
71 Nergelius, Joakim (1998), p. 66.
72 The ECB has the powers to supervise the NCBs and can, if needed raise proceedings against them. Art. 14.3 of the Statute.
73 Art. 230 EC.
74 Art. 232 EC.
75 Art. 5 of the Council Regulation on the powers of the ECB to impose sanctions. The unlimited jurisdiction brings also about the possibility of observing all relevant circumstances for the case, not only the four grounds for invalidity established in Art. 230 EC, namely lack of competence, infringement of an essential procedural requirement, infringement of the Treaty or any rule of law relating to its application, or misuse of powers.
76 Art. 234 EC.
77 The ECB and ECJ can only impose sanctions the proceeds from which shall belong to the ECB, Art. 3(9) of the Council regulation on the powers of the ECB to impose sanction. They cannot grant damages.
78 Dunnett, D.R.R.(1994), p. 144.
79 Idem.
80 Idem., p. 145.
81 Case CNTA 74/74, p. 546, point 16.
82 This has been stated by Crombeen within the area of competition law. Within that field, examples of such interests might include the potential for loss or injury as a direct consequence of the alleged infringement. Crombeen, Iris L.P. (1998), p. 160.
83 Judicial review in relation to other organs is more general, according to Art. 220 EC the ECJ shall ensure that in the interpretation and application of the Treaty the law is observed.
84 Louis, Jean-Victor (1998), p. 10.
85 Brentford, Philip (1998), p. 99.
86 Nergelius, Joakim (1998), p. 147-148. With respect to the ECB it will be, at least in the beginning, more a question of a very marginal review. Idem.