Tuesday, October 14, 2014

Europe does not need a central bank Emperor Draghi – THE WORLD

Europe does not need a central bank Emperor Draghi – THE WORLD

There have been many photomontages with Mario Draghi. Even those that showed the President of the European Central Bank (ECB) with laurel wreath and a cloth over his shoulder that resembled a toga. Just as would be the guardian of European monetary policy of the descendant of Roman Emperors. Such a representation is actually nonsense. Aside from Belarus, so there is in Europe a long time no absolutist ruler more, certainly not in the form of Governors.

What sounds trite, must are pronounced clearly again these days. For precisely those institutions, otherwise keep Europe for a long democratic enough, speak a new Caesars word and pretend they wanted to raise the ECB president on a throne, let him rapture any control.

location of this play is the European Court of Justice (ECJ) in Luxembourg. There, this week will be negotiated over whether the ECB in 2012 was allowed to hang up a purchase program for government bonds of countries in crisis. So Formally, it is just a technical instrument of monetary policy, which since then has not even came into use. But in fact more fundamental questions lie on the judges’ table. It is important to clarify how far the liberties of the ECB are rich in the monetary union. Various Brussels actors are poised to misunderstand the independence of the central bank dramatically. And send an alarming signal for a Europe that would be ruled completely over the heads of its citizens away

No superfluous abundance of power -. For anyone

where the independence of the ECB is generally considered a great achievement and is being defended right in Germany. Such autonomy is a rather recent phenomenon: long it was common practice that the central bank of a country of the relevant government stood. Has proved not: Too great was the temptation for those who depend on voters favor politicians, using the printing press for a little boom to provide or to finance the debt-ridden state budget

The result was regularly high inflation – and the realization that it is better to decouple a central bank of the politics of the day. The solution: central bankers that no one can dismiss that control interest rate and monetary autonomy. In exchange, but their order is narrowly defined: you have to ensure stable money, so to keep inflation in check mainly – nothing else. For even more power, wealth without any control would be in a democracy also not justifiable.

to be in Europe but is now in danger of this second principle of the independence regime thrown overboard . In the eyes of many critics, the ECB has with its bond program violates its mandate and crossed the border into the forbidden state funding with the printing press. The Federal Constitutional Court has this view is connected, the decision but initially referred to the European Court of Justice. The other euro countries and the EU institutions to defend the ECB’s policy there vehemently -. Yet the arguments put forward here, are sensitive

charters hurt

It is precisely the EU Commission and the European Parliament have argued in their comments on the method that the ECB’s policy would be largely deprived of a judicial review. And if it goes to the governments of Spain and Italy, then this applies not only to the ECJ, but especially for the German Constitutional Court – Karlsruhe to stay out in the future if you please with the ECB

Without any judicial review but the legitimacy of an autonomous central bank is led ad absurdum. Then, the ECB would be independent not only within their mandate, as envisaged by the EU Treaties. You could decide for myself how far does this mandate – which could never be the intention. Because that would get the 24-member Governing Council, whose members are not selected, an abundance of power, which would be incompatible with democratic principles.

Even the Central Bank itself would harm such a charter. Finally, Draghi is already facing constantly confronted with the expectation that the central bank may solve the crisis in Europe alone. In this case, no monetary policy of the world untie the undeniable structural problems in many Euro countries. Depending Almighty, the ECB, however, appears, the further the already exaggerated expectations will rise.

Tempting money pots

Above all, the charter would harm Europe. A technocratic institution that can extend its influence as far as desired, to be guilty without anyone accountable – so we may not function Europe. Even that is exactly the central charge, the critic of the European Union make: In Brussels would be decided, without asking the citizens. The integration friends try to make the Union more democratic, in particular by demanding ever more influence for the EU Parliament. And now talk just this integration friends uncontrolled central authority for European financial questions the word. This is grotesque.

Sure, the crisis years have taken to their limits, the EU and its often difficult decision making. For larger common money pots that are holding the currently weaker countries to be desirable, it is in countries such as Germany no political majority. Nor enforceable seems effective control of the agreed fiscal rules, as it is called in this country. But the solution can not be that a Super institution in Frankfurt passes through a policy by the back door that would never sign off on the voters in Europe when they should have a say because.

As a monetary union stood at the abyss, has bought a pragmatic ECB time. Now, however, shows the danger of this policy: Europe is poised to become friends with the omnipresence of the central bank in financial matters, the finance ministers can save all kinds of uncomfortable decisions. So but Europe may in the long run not stand

Regardless of whether the ECJ is the government bond purchases to be legal, the Luxembourg judges should make one thing clear:., The European Central Bank is independent in its monetary policy decisions, but it is not outside the law. Just as any other institution at European level. The EU will only recover to support, if they involve the citizens when they designed their future in a democratic way. Everything else only strengthens further the extremist forces.


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