How has the European Central Bank ensured its independence?

The European Central Bank (ECB) has ensured its independence primarily by forbidding the Governing Council from taking instructions from governments. This was established in the foundational legal documents and statutes of the ECB, which emphasize that the bank operates independently in the formulation and implementation of monetary policy. This independence is crucial in maintaining credibility and effectiveness in managing inflation and contributing to the stability of the euro.

When central banks have the autonomy to make decisions without political pressure, they are better positioned to conduct monetary policy that aligns with long-term economic stability rather than short-term political objectives. This independence helps to instill confidence in the currency, as decisions are made based on economic indicators rather than political whims. Therefore, the prohibition against taking instructions from governments is a key safeguard to ensure that monetary policy is resilient and focused on economic goals.