Draghi: ECB needs more democratic accountability
05.07.12 @ 17:32
FRANKFURT - The European Central Bank (ECB) is willing to play a role in the new supervisory authority to be set up for eurozone banks and is acknowledging that more democratic scrutiny needs to be put in place for these new powers.
Right at the bottom of the 36-storey skyscraper known as the 'Eurotower' is a little park full of dusty tents and fading banners denouncing capitalism and bankers.
The remnants of the Occupy Frankfurt movement - which in its glory days gathered tens of thousands on the streets of Germany's financial capital - are almost all gone.
Regina, a web designer who is part of the movement but did not want to reveal her last name, told this website that roughly 50 people still camp in front of the ECB but have little knowledge of what decisions are taken inside.
If she were to deliver them a message, she said, it would be to "keep their hands off our democracy."
And on Thursday (5 July), nine months since the "occupiers" set up camp at the bottom of the skyscraper, ECB supremo Mario Draghi acknowledged exactly that in his regular monthly press conference.
With the extra supervisory powers soon to be entrusted to the ECB - a German precondition for any direct bailouts from the eurozone fund to struggling banks - Draghi said that particularly since they are a "non-elected institution," "the new tasks will imply a higher level of democratic accoutability."
When pressed what form this accountability should take - for instance scrutiny from the European Parliament - Draghi said it was up to the European Commission, the European Parliament and "the citizens of the euro area to tells us how we can comply with their certain desire to have us on a standard higher than in the past."
He emphasised that it was particularly important to get this legislative proposal 'right' rather than to stick to the end-of-the-year deadline set out by EU leaders last week.
Draghi insisted it would be "no drama" if there was a two-three months delay in setting up this new authority, even if meanwhile the debt of a country would be temporarily increased - a reference to Spain - by having to take a bailout for its banks.
As for the role of the ECB, he made it clear that its supervisory activities would need to be "rigorously separated" from its lending activities - a cause of concern for many observers who think that concentrating so many powers in the ECB is wrong.
"I remain concerned about the ability of the ECB to be an effective bank supervisor and about concentration of power," Sony Kapoor who chairs Re-Define, an economic think tank, said on Twitter.
Draghi suggested that the ECB could work together with national supervisors, who best know the situation of the banks in their countries.
But several question remain open: will the supervision extend to non-euro banks; will it include all banks or just the big ones; will it also have the power to say which bank should get a bailout from public money or let to go bankrupt?
"We are just at the beginning, these are the first days we are discussing this new concept. It's natural for people to have different views. But finally it will be up to the European Commission, in consultation with the ECB and the European Parliament, to come up with a proposal," Draghi said.