This article examines the transformation of the role of the European Commission and the European Central Bank (ECB) in the context of the Economic and Monetary Union (EMU), from institutions acting within the EU institutional framework, to actors taking on new tasks in the realm of international law as part of the structure of the European Stability Mechanism (ESM). It expounds the legal framework applying to the two institutions in the ESM by analysing the currently applicable legislation as well as recent case law of the Court of Justice of the European Union (CJEU) (Ledra and Mallis). It argues that the applicable legal framework remains underdeveloped and unclear, especially with regard to the obligations incumbent on the ECB in the ESM, which have not yet been examined by the EU courts. Exploring the main challenges resulting from the ambiguity of the tasks and obligations conferred on the two EU institutions in the ESM, the article argues that all EU law applies in principle to the activities of the EU institutions in the ESM. It then shifts the focus to political and legal accountability, the emphasis being on direct and indirect actions before the CJEU, including the vexed issue of liability of the EU institutions for damages caused by their actions in the ESM. The article concludes with a forward-looking assessment in light of the Five Presidents’ Report on Completing the EMU, which stipulates that the governance of the ESM should be integrated within the framework of EU law. The article questions whether a future incorporation of the ESM's governance in EU law could address any of the challenges resulting from the current uncertainty about the role and potential liability of the Commission and the ECB for their actions in the ESM, and makes a number of recommendations as to how the ESM should be incorporated into EU law.