Can be EBC wrong - the OTM program

The sovereign debt crisis in the Eurozone has evidenced the shortcomings of financial supervision and regulation in the EU. In the summer of 2012, at the height of the crisis, and in the absence of a clear protector of financial stability in the Eurozone, it was the bold pledge of the President of the European Central Bank (ECB) to do " whatever it takes to preserve the euro " that managed to restrain contagion. But did the ECB really have the power to act as the safeguard of financial stability in the Eurozone? EU Policy makers have reacted to those shortcomings by introducing deeply transformative changes in financial regulation. The birth of the Banking Union might be the paramount example. In the institutional landscape arising from the Banking Union, the European Central Bank (ECB) stands as a central player, especially as the competent authority for the prudential supervision of the most significant credit institutions in the Eurozone. Yet, the scope of its new powers as the guardian of financial stability is unclear. For example, in the event of another financial crisis, could the ECB provide financial assistance to credit institutions facing liquidity problems as a Lender of Last Resort (LOLR)? In this paper, we look at the ECB's core mandates in the Treaties to delineate the scope of those new powers. Unlike monetary policy, financial stability is not a core mandate of the ECB under the TFEU. We begin by exploring whether the ECB could perform LOLR functions within its core mandates; particularly, within its mandate of monetary policy. For that, we delve into the recent decision of the CJEU in

1. Introduction 2. ECB’s tasks and competences; 3. The intervention of the ECB in the Eurocrisis; 4. Legitimacy of the interventions and conditions attached to it; 5. The unclear borders of monetary policy; 6. Is the activity of central banking “political”?

ABSTRACT This article investigates why the European Central Bank’s (ECB’s) unconventional monetary policies were relatively modest during the crisis, focusing specifically on the design of its government bond purchase programmes. Building from available explanations of the ECB’s behaviour in the political science and public policy literature, we extrapolate a number of testable propositions with a view to helping to account for the specific features of the policies under investigation. These propositions build from scholarly works that emphasize three distinct funda- mentals of the ECB’s behaviour: legal; doctrinal; and institutional. We then provide evidence supporting our propositions by evaluating the ECB’s policy settings during the crisis. In addition, we identify other factors that have shaped the design of the ECB’s bond buying policies, namely the ECB’s conception of its own independence. KEY WORDS Balance sheet policies; European Central Bank; global financial crisis; policy settings; unconventional monetary policies.

Monetary policy for those Members whose currency is the Euro is one of European Union’s few formally exclusive competences. Yet despite formal allocation of monetary policy competence to the Union, this chapter argues that the practice of monetary policy decision-making reflects the EU’s nation-state structure. It tells us one side of the story about the balance of power for the conduct of monetary policy. If exclusive competence at bottom means that member states have no say in devising policy, then monetary policy, is not at present a genuinely exclusive competence. Instead, the chapter contends that monetary policy is an exclusive competence of the EU in name only. At the very least, the position is more nuanced than the label of exclusive competence suggests. The first section compares competence for monetary policy with related areas, specifically economic policy, and closely connected thereto, education, health, labour and social policy. It also briefly discussed how the Eurozone crisis has affected the vertical balance of responsibilities between the EU and its member states in these areas. The second section examines the asymmetric allocation of competence for economic and monetary policy, and the fuzzy boundary between the two, through the prism of the two key Eurozone crisis cases before the CJEU, Pringle and Gauweiler. The third section examines why, contrary to first appearances, the EU does not at present have a genuine exclusive competence for monetary policy.

German Law Journal, 2014

2017

Monetary policy for those Members whose currency is the Euro is one of European Union's few formally exclusive competences. Yet despite formal allocation of monetary policy competence to the Union, this chapter argues that the practice of monetary policy decision-making reflects the EU's nation-state structure. It tells us one side of the story about the balance of power for the conduct of monetary policy. If exclusive competence at bottom means that member states have no say in devising policy, then monetary policy, is not at present a genuinely exclusive competence. Instead, the chapter contends that monetary policy is an exclusive competence of the EU in name only. At the very least, the position is more nuanced than the label of exclusive competence suggests. The first section compares competence for monetary policy with related areas, specifically economic policy, and closely connected thereto, education, health, labour and social policy. It also briefly discussed how the Eurozone crisis has affected the vertical balance of responsibilities between the EU and its member states in these areas. The second section examines the asymmetric allocation of competence for economic and monetary policy, and the fuzzy boundary between the two, through the prism of the two key Eurozone crisis cases before the CJEU, Pringle and Gauweiler. The third section examines why, contrary to first appearances, the EU does not at present have a genuine exclusive competence for monetary policy.

The European sovereign debt crisis represented a “test case” for the EU supranational institutions, since the crisis could have strengthened the role of the most influential national governments, wiping out the EU supranational exceptionality: given this context, an analysis of the supranational institutions’ attitude can provide meaningful insights concerning the real substance of their autonomy. In this respect, an analysis of the positions held by the ECJ in “Gauweiler” can be extremely fruitful with regards to its controversial role in the European integration: what approach may better explain the positions held by the ECJ on the European Central Bank’s Outright Monetary Transactions programme? The abovementioned open debate passes through this crucial ruling, given the interests at stake and its 4 implications regarding the autonomy of ECJ and ECB. In the first section, we will present in broad terms two general “approaches” on the subject of the ECJ’s role in the European integration process (“Legal autonomy” and “Political power”); in the second section, having briefly presented the Gauweiler case’s premises and the objections raised by the German Federal Constitutional Court (Bundesverfassungsgericht), two hypothesis on the positions held by the ECJ will be drafted; in the third section, our hypothesis will be tested through the analysis of the ECJ’s conclusions in order to establish which approach provides us better explanations; in the final section, our conclusion will be drawn.

2013

Unusual times call for unusual measures. This paper demonstrates how neofunctionalist theory can be used to understand how the European Central Bank (ECB) has recently become a main driver of European integration. Since the onset of the European sovereign debt crisis, the ECB's policy can be characterised in two ways. Firstly, the ECB has endeavoured to prevent the disintegration of the Eurozone and safeguard the current level of integration. The Outright Monetary Transactions (OMT)-Programme of September 2012 is the key policy instrument of this initiative. Its legal nature is, however, disputed. Secondly, the ECB has started to use its discretionary powers to push for more integration in matters of financial regulation as well as economic and fiscal policy, thereby triggering a powerful spill-over effect.

Daphnie Ploegstra (3960374) Capita Selecta Economic and Monetary Union mr. dr. Ton van den Brink Word count: 2891

Maastricht Journal Special issue: The ECB's accountability in a multilevel European order, 2019

This introductory article sets the ground for the analysis performed in the articles included in this Special Issue. It shows why a new analysis of the European Central Bank (ECB)'s accountability is required by referring to recent developments, and by underlining how much the ECB's role and standing have changed since its creation 20 years ago. Indeed, its resorting to unconventional monetary policies in response to the recent economic and financial crisis, as well as the creation of the Banking Union, have significantly affected the ECB. This introduction also recalls the main elements of the debate on the balance between accountability and independence, and shows how this balance has evolved. On the basis of the findings of the articles included in this Special Issue, some conclusions and hypotheses as to the way forward are formulated.