Do central bankers dream of political union? From epistemic community to common identity

Abstract

The European Central Bank (ECB) started life as a symbol of European commitment to unity and to the value of central bank independence. As such, the ECB and the euro were positive sources of identification with Europe. During the crisis, however, the role of the ECB changed. The instruments monetary policymakers used to respond to the crisis had different impacts across member states, and the decisions they took to address tensions in financial markets often appeared arbitrary. In this context, the ECB ceased to operate as a symbol of commitment to integration and central bank independence became a contested rather than a shared value. This essay explains how that transformation took place and why it is important for the constitutive role of the ECB in the European project. The argument ends with populist movements using the ECB as a symbol for negative identification. European Central Banks can only fight back by promoting some kind of European political union to shore up their unique institutional arrangement.