European Parliament adopts 2025 ECB Annual Resolution

On Tuesday 10 February, the European Parliament (EP) adopted its 2025 resolution on the European Central Bank (ECB) Annual Report with 443 votes in favour, 71 against and 117 abstentions. 

The resolution is Parliament’s main tool for holding the ECB democratically accountable. It reviews the ECB’s actions over the past year and sets out political guidance for the future. While the initial draft, signed by MEP Van Overtveldt, contained serious shortcomings (particularly on central bank independence, climate change and the interpretation of price stability) some of the most problematic elements were removed during negotiations. Even so, the final text marks a step backwards compared to previous reports, especially in its treatment of climate change and the ECB’s role in addressing it.

The Plenary also adopted five amendments, introducing several last-minute important changes to the resolution. The amendments on central bank independence, the digital euro, and the cost-of-living crisis strengthened the text. One, however, severely and unjustifiably undermined the importance of ECB’s climate action.

Here is what the resolution says.

The EP wants the ECB to be (kind of) independent, but not isolated

The final text correctly defines central bank independence as freedom from political interference. Most importantly, it acknowledges that the ECB must not operate in technocratic isolation. This is a crucial point, as independence is not a licence to ignore society’s needs.

However, Parliament retained an ambiguous statement that the ECB should “refrain from political actions.” This is problematic: at no point do the EU Treaties refer to or provide a definition of “political” actions. This matters because “political” can quickly become a weaponised label. If elected officials can label certain monetary measures as “political,” independence becomes conditional and fragile.

MEPs also added a plenary amendment expressing solidarity with the US Federal Reserve, after reports that Chair Jerome Powell is facing criminal investigation following sustained political pressure to cut interest rates. The episode highlighted a real tension: central bankers are not above the law, and credible allegations must be investigated through proper legal processes. At the same time, legal instruments must not be weaponised to intimidate monetary authorities. 

Central banks perform a core public function. To do so effectively, they must be protected from political capture. But independence does not mean insulation from democracy. Monetary policy shapes employment, access to credit, inequality, and even environmental outcomes. That power requires transparency and accountability to democratic institutions.

The digital euro is a key priority for the EP

On Tuesday, the EP adopted two last-minute amendments in favour of the digital euro with overwhelming support. The scale of the majority (420 and 438 votes respectively) sends a clear political signal: the EP broadly supports the digital euro project, despite over three years of intense lobbying from the financial sector over the past three years.

MEPs voiced clear support for the kind of digital euro that has long been advocated by Positive Money: a universally accessible, widely accepted form of public money that functions both online and offline while safeguarding privacy. The resolution emphasises its potential to modernise public money, reduce financial exclusion, and strengthen Europe’s monetary and payments sovereignty. Notably, backing extended well beyond the political centre, with many traditionally sceptical voices on even the centre-right and right voting in favour.

This should send a clear message to MEP Navarrete, the EPP rapporteur on the digital euro file. His approach so far has been notably cautious and narrow, questioning the necessity of the project and favoring an offline-only digital euro with limited legal tender and no public distribution. Parliament’s position is now unmistakable: the EU wants a digital euro, and it wants it to move forward.

When it comes to climate, the EP calls for the ECB to ignore its own mandates  

On climate change, MEPs improved the first draft text substantially during negotiations, but then undermined that progress with a single word. On Tuesday the EP approved a last-minute amendment stating that the ECB “should only consider the potential effects of climate change from a price stability perspective and from within its mandate.”

That ‘only’ ignores a key fact: climate change does not affect price stability exclusively. It directly affects financial stability through physical risks, transition risks, and macroeconomic disruption. The ECB itself has repeatedly recognised this and has (too slowly) begun integrating climate risk into its operations and collateral framework. 

Moreover, the Treaties give the ECB two mandates: apart from price and financial stability, it must support the EU’s general economic policies. Those policies include the green transition. Ultimately, restricting climate considerations exclusively to price stability means ignoring the ECB’s own mandates. At a time when climate-related risks are increasingly systemic, this is a severe failure.

Stubborn inflation is making life unaffordable, but the EP has confused solutions

Inflation is a core topic of the resolution. On Tuesday, the EP approved a plenary amendment that rightly highlights the cost-of-living crisis: on average, a meal now costs roughly one-third more than before the pandemic, with low-income households bearing the brunt. This acknowledgement is fundamental: inflation is not an abstract statistic, it shapes daily life and exacerbates inequality.

Yet the resolution falters in its conclusions. While it rightly gestures towards reinterpreting price stability, the final text offers no concrete roadmap, failing to push for an inflation target that accounts better for structural change and the social impact of monetary policy.  

Rather, MEPs criticise the ECB for reacting too slowly to rising inflation. That view ignores the trade-offs: a more aggressive tightening would have imposed even heavier costs on households through higher borrowing costs, weaker labour markets, and reduced investment, again hitting the most vulnerable hardest.

The EP also points to energy security risks as inflation drivers but overlooks a central structural factor: Europe’s past inflation spike was closely tied to dependence on imported fossil fuels. As long as that dependency persists, similar shocks remain likely. Energy sovereignty through domestic renewable production is an anti-inflation strategy.

The ECB needs more gender equality 

The final resolution includes an important paragraph on diversity at the ECB. Despite attempts from the far right to remove references to gender balance, the adopted text stresses that Executive Board nominations should be gender-balanced and based on merit and ability. It also emphasises equal opportunities for all genders to serve as national central bank governors. 

The lack of diversity in the ECB and eurosystem is striking. To date, just one central bank governor in the history of the euro area has not been a man. 

But diversity in gender, age, nationality, educational and socioeconomic background is not something that should be seen as being simply ‘nice to have’. It improves decision-making in complex policy environments by bringing different perspectives and sensitivities into the room.

This debate is particularly timely, as several Executive Board seats will become vacant over the next two years. The choices made now will shape the ECB’s direction for the next decade.