Post by Nik de Boer

How is the ECB coordinating its climate policies with governments? Covertly, and coordination mostly goes one way. This is what we show in our new publication ‘The Law and Politics of Independent Policy Coordination’ (co-authored with Seraina Gruenewald and Jens van 't Klooster). The paper offers a comprehensive analysis of the ECB’s views on coordination and how these have evolved over time. It was recently published in the wonderful volume Central Banking and Sustainability edited by Kern Alexander and Seraina Grünewald and published by Cambridge University Press. Coordination with economic policymakers remains something of a taboo for central bankers. Yet it is more common than often assumed. Before the 2008-2009 Global Financial Crisis, the prevailing view was that central bank independence barred the ECB from coordinating with political institutions. However, Europe’s central bank now acknowledges that it often cannot achieve its objectives by itself. Coordination is especially visible in relation to the ECB’s climate agenda. We also show that EU law leaves ample room for enhanced policy coordination, as long as this does not conflict with the ECB’s price stability objective. Still, coordination between the ECB and other institutions remains mostly a one-way street: it is the ECB that decides whether, when and with which economic policies it coordinates monetary policy. We call this “independent policy coordination”. Clearer guidance by political institutions on the broader economic policy goals relevant to monetary policy would strengthen both the legitimacy and effectiveness of the ECB’s climate policies. The paper can be accessed through libraries via Cambridge Core: https://lnkd.in/ePQf9K3W An open-access pre-print is available here: https://lnkd.in/eqD9CG-v We are grateful to Sebastian Diessner and Gregor Laudage for helpful feedback on an earlier draft. The chapter may be of interest to: Clément Fontan, Eric Monnet, Ana Bobić, Thomas Beukers, Monica DiLeo, Manuela Moschella, Menelaos G. Markakis, Pieter-Augustijn Van Malleghem, Javier Solana, Vestert Borger, Agnieszka (Aga) Smoleńska, PhD, Marijn van der Sluis, Will Bateman, Alessandro Cuomo and Francisco Javier Padilla Olivares.