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.72 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.73 The ECJ shall review the legality of its acts74 and also establish failure to act.75 The Court also has unlimited jurisdiction over the review of final decisions of the ECB whereby a sanction is imposed76 and competence to give preliminary rulings concerning the acts of the Bank.77 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.78
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.79 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.80 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.81
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.82 The applicants also need to demonstrate a comparably significant economic interest in the outcome of the complaint procedure.83 In general, judicial review in relation to a central bank is very unusual.84 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.85
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.86 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.87 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.