The Politicisation of the European Central Bank and the Bundestag

Abstract

The European Central Bank (ECB) became one of the key actors during the Eurozone crisis. However, its prominent role was not without controversy. On one hand, the Eurozone was stabilised, no member state defaulted, and no state had to leave the Euro. On the other hand, the ECB had to stretch its mandate, expand its policy remit, and adopt so-called ‘unconventional’ monetary policies. These attempts to depoliticise political challenges through a technocratic approach reduced the opportunities for democratic contestation, but they also bred frustration that led to politicisation. This article studies to what extent this politicisation affected the perception of the ECB in national parliaments. For this purpose, it studies the extent to which ECB policy has become politicised in the German Bundestag through an analysis of plenary debates from 2005 to 2018. The Bundestag represents an unlikely case for politicisation despite wide-spread criticism of the ECB in the media, as Germany was traditionally attached to creating a highly independent ECB, until recently had no major Eurosceptic right-wing parties, and parliamentary scrutiny of the national central bank is low. However, by studying the salience of ECB policies, the polarisation of opinion in the parliament, as well as the range of actors participating in the debates, this article finds that the ECB’s policies have become politicised and the subject of scrutiny and dissatisfaction.

Introduction to “Out of the Shadows, Into the Limelight: Parliaments and Politicisation”

“…Anna-Lena Högenauer (2019), in turn, examines the effects of politicisation within another policy field-that of finances-and within another parliament. Based on analysis of plenary debates from 2005 to 2018, she analyses the relationship between the ECB and the German Bundestag.…”

“…Although it contributed to the stabilisation of the Eurozone, the ECB was seen to have gone beyond its mandate and to have expanded its policy remit. Its technocratic approach to the crisis reduced the opportunities for democratic contestation and led to "frustrations" that provoked politicisation (Högenauer, 2019). Högenauer studies how and to what extent this politicisation affected the perception of the ECB in the German Bundestag.…”

“…She argues that the Bundestag is an unlikely case for politicisation because Germany was very much in favour of a highly independent ECB. Moreover, it has no "active scrutiny culture" even when it comes to its national central bank, and until recently no Eurosceptic right-wing parties were represented in parliament (Högenauer, 2019). However, Högenauer finds that the ECB's policies have become politicised.…”

“…Following Hutter andGrande (2014, p. 1004): "Only topics that are frequently raised by political actors in public debates can be considered politicized." Among the empirical examples investigated in this thematic issue are European Central Bank (ECB) issues for the German Bundestag (Högenauer, 2019), the Transatlantic Trade and Investment Partnership (TTIP; Rosén, 2019), and the Brexit negotiations (see Meissner, 2019). Secondly, politicisation entails the polarisation of opinion.…”

“…Salience is of key importance, more so than parliamentary powers, in accounting for parliamentary engagement, as shown by Meissner (2019) in her comparison of the high level of involvement of the German Bundestag with the rather peripheral role played by the Austrian Nationalrat in the Brexit debate. Högenauer (2019) delves further into the institutional effects of the politicisation in her case study of the Bundestag's debates regarding the ECB during the Eurozone crisis. She shows how politicisation has bred increasing scrutiny of the ECB, as well as growing dissatisfaction, despite there being support for the independence of central banks.…”