The new ECB and its relationship with the eurozone Member States: Between central bank independence and central bank intervention

Abstract

The financial and sovereign debt crisis has had a great impact on the relationship between the European Central Bank (ECB) and the Member States of the Eurozone, a relationship traditionally studied from the perspective of central bank independence. This article takes a different perspective on that relationship, namely that of central bank intervention in Member State economic policy making. It focuses on the pressure and influence exercised by the ECB on the Member States of the eurozone. The two perspectives combined reveal the nature of the ever more frequent and intense interaction between the ECB and the Member States of the eurozone. In the crisis, several different forms can be identified of ECB pressure on eurozone Member States to adopt reforms in the areas of fiscal policy and structural reforms, marking a shift from interaction to central bank intervention. This ECB intervention is parallel to an equally unprecedented intervention by the collective of eurozone Member States in the economic policy of several Member States through the economic policy conditionality linked to financial assistance. The article analyses several instances of ECB intervention, offers an explanation and a theoretical framework for normatively assessing it. The main risk identified for the ECB in this article is that of being perceived as a political or politicized actor, although it is acknowledged that the ECB is confronted with a difficult balancing act. The ECB should be more cautious in its approach, the further an issue is from its core mandate of securing price stability.

Kuruluşundan Geleceğe Türkiye Cumhuriyet Merkez Bankası

“…(2008), Dreher vd. (2010, Hielscher ve Markwardt (2012), Goodfriend (2012), Beukers (2013), Micossi (2015), Dikau ve Volz (2018), Kiff vd. (2020), Leombroni vd.…”

What to Do with the ECB's Secondary Mandate

“…There the ECB decided to make lending to member states dependent on politically agreed conditionality under the European Financial Stability Facility (EFSF) or the European Stability Mechanism (ESM). Under the previous SMP, the ECB had instead articulated informal conditionality on its own authority (Beukers, 2013). The ECB has already announced incorporating the EU's new disclosure policies into the rules of its monetary policy operations.…”

“…The Treaties make clear that a degree of influence by other institutions on the ECB's operations is compatible with Article 130 TFEU (Beukers, 2013, pp. 1581–8; Smits, 1997, pp.…”

“…In setting out the obligations that its vague provisions impose on the central bank, our article contributes to the study of how central banks navigate their new issues of legitimacy raised by the transformation of monetary policy since 2008 (Bateman, 2021; Braun, 2017; Dawson et al, 2019; Kreuder‐Sonnen, 2016; Lokdam, 2020; Scicluna, 2018). It has become clear that navigating these issues is particularly difficult for the ECB due to its high level of independence and limited democratic accountability (Amtenbrink and Repasi, 2020; Beukers, 2013; Borger, 2020; de Boer and van 't Klooster, 2020; Feichtner, 2020; Högenauer and Howarth, 2019; Markakis, 2020; Tuori, 2019). In focusing on the secondary mandate, we make concrete proposals for navigating these democratic and procedural challenges, while also contributing to recent work on the role of the European Parliament and other EU institutions (Collignon and Diessner, 2016; Dawson et al, 2019; Fromage et al, 2019; Maricut‐Akbik, 2020).…”

El diálogo judicial en curso y los poderes del BCE: la sentencia Weiss

“…The OMT programme was never activated. 21 Again, for an exhaustive account of the ways in which this has taken place Beukers (2013). 22 As mentioned above, there are two main critiques that have been levelled at the ECB's bond-buying schemes; this includes the OMT programme that was at stake in Gauweiler, but also the subsequent PSPP that was at stake in Weiss and that will be discussed later.…”