Johan Van Overtveldt on the ECB: “Price stability must remain at the heart of monetary policy”

Today, the European Parliament votes on the European Central Bank’s 2025 Annual Report, drafted by Member of the European Parliament Johan Van Overtveldt. In his report, the Chair of the Committee on Budgets calls for a renewed focus on the core principles of monetary policy: price stability, central bank independence, and a robust financial system.

Price stability as the cornerstone

According to MEP Johan Van Overtveldt, who also serves as coordinator in the Committee on Economic and Monetary Affairs (ECON), price stability must remain the ECB’s undisputed anchor.

The recent decline in Inflation The increase in the general price level. The original meaning (literally “to blow up”) is monetary inflation, which means that the amount of money increases. Today, inflation primarily refers to price inflation. This means an implicit monetary depreciation. This causes the purchasing power to drop. inflation is encouraging, but it is no cause for complacency. “The recent easing of inflation is welcome. However, in a world marked by geopolitical tensions, volatile energy markets and exchange rate uncertainty, vigilance is essential. The ECB must stay focused on its primary mandate and stand ready to act decisively if inflationary pressures resurface,” Johan Van Overtveldt stated.

The report stresses that monetary policy should remain cautious and data-driven, with particular attention to risks stemming from geopolitical developments and disruptions in trade and energy supply.

Independence and accountability

Another key pillar of the report is the ECB’s political independence. At a time when central banks around the world are facing mounting pressure, that independence remains a cornerstone of economic stability.

“The ECB’s independence is not a technical footnote—it is fundamental to economic stability. At the same time, independence must go hand in hand with accountability. Greater transparency and clearer communication are essential to strengthen public trust and democratic legitimacy,” said MEP Johan Van Overtveldt.

The report therefore calls on the ECB to make its decision-making more transparent and accessible to both citizens and policymakers, and to reinforce its accountability to the European Parliament.

Staying alert to financial risks

The report also places strong emphasis on financial stability. A growing share of financial activity is shifting to the non-bank sector and to crypto-assets, creating new and evolving risks. By way of illustration, non-bank financial institutions (NBFIs) now account for more than 50% of global financial assets. Within the European Union, the non-bank sector is 20% larger than the traditional banking sector.

“Monetary stability and financial stability are inseparable. We must remain alert to risks emerging outside the traditional banking system, particularly in the shadow banking sector and in crypto-assets,” Johan Van Overtveldt noted.

In addition, the report underlines the importance of sound public finances as a necessary complement to effective monetary policy.

Back to basics

The report’s central message is clear: the ECB must refocus on its core mandate—safeguarding the stability of the currency.

“Monetary and financial stability are like electricity or clean water—you only fully appreciate their value when they are no longer there. Sound monetary policy ensures that money itself does not become a source of economic instability,” Johan Van Overtveldt concluded.