Output Legitimacy and the Global Financial Crisis: Perceptions Matter

Abstract The global economic crisis has sapped support for the euro and lowered trust in the European Central Bank (ECB). In doing so, it has also exposed a weakness in the ‘output‐oriented legitimation’ of Europe's economic and monetary union. The common monetary policy and single currency have to be perceived as working if they are to maintain popular acceptance. Whether they actually work is less important than this perception. This raises the prospect that no matter how successful the ECB is in responding to moments of crisis, public opinion may begin to reflect the perception that it has failed. Indeed, the greater the uncertainty experienced during the crisis, the more likely it is that such negative perceptions will predominate. Worse, there is very little that the ECB can do to change popular perceptions or to create new channels for input‐oriented legitimation without jeopardizing the credibility of its commitment to price stability or its reputation for political independence.