The European Central Bank’s secondary mandate under article 127(1) sentence 2 TFEU: A “sleeping beauty”?

Abstract Traditionally, the European Central Bank’s (ECB) secondary mandate has received little attention and has not been relied upon by the ECB. Increasingly, though, it is discussed as a possible basis for ECB measures combatting the climate crisis and the ECB itself explicitly used it as a justification for the consideration of climate-related aspects in its Corporate Sector Purchase Programme (CSPP). Against this background, the scope of article 127(1) sentence 2 of the Treaty on the Functioning of the European Union (TFEU) is assessed from different angles: from policies potentially supported and its functions in relation to other objectives and competences, to the limits following from the principle of proportionality and from fundamental rights, as well as to instruments which may be used. Through a thorough legal assessment, we show that the potential of the secondary mandate is indeed limited in several respects. However, considering the ECB’s independence and, thus, its weaker democratic legitimacy as well as reduced accountability, we argue that these limitations should not be seen as a bug, but rather as a feature, by which we protect our constitutional model of democracy which assigns important redistributive decisions to more democratically legitimized bodies.