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Spelling it out further - the problem is that board independence means the ECB can do whatever the heck they care to, short of printing fourteen billion and walking home with one each. Currently what they care to do appears to be  "burn the european economy and project down". Charitably, because they are morons.
Apply all legal measures of persuasion and pressure you can think of until their desires change, and their new course of action is every bit as formally unstoppable.

Once people realize that the ECB is essentially an endrun around the entire formal political structure, the status quo will last.. a month?

by Thomas on Wed Feb 13th, 2013 at 04:13:18 PM EST
[ Parent ]
The entire German political establishment appears to agree that the ECB is configured as it should be. Central bank independence, interpreted fundamentalistically as a prohibition of monetary financing of fiscal policy, is part of the German basic law. No promiment German politicians question austerity, and most economists who do are in "exile".

What you propose will be done over Germany's dead body.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Wed Feb 13th, 2013 at 04:36:12 PM EST
[ Parent ]
The point is that Germany cannot stop it. Convince, by hook or crook, the 14 people of the ECB board to do something, and there are no legal pathways available for Germany, or anyone else, to stop it from happening. So convince them to do quantitative easing by mailing out 300 million checks or monetarising every european national debt across the board until unemployment hits zero, and all they can do is have seizures. They are ideologically committed to a framework that includes the central bank having near-total freedom of action. This can, and should be, turned against them.
by Thomas on Thu Feb 14th, 2013 at 01:28:28 AM EST
[ Parent ]
"They" being shorthand for "the austerity coalition"
by Thomas on Thu Feb 14th, 2013 at 01:32:02 AM EST
[ Parent ]
Yes, Central Bank independence cuts both ways.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Thu Feb 14th, 2013 at 02:02:07 AM EST
[ Parent ]
Somehow, I'm sure that they would suddenly find arguments to change the ECB board as they had evidently betrayed their mandate.

Which is not to say it should not be tried (or that they would fully succeed). But the last 40-50 years (and maybe beyond that) have had a striking tendency of the laws being interpreted differently when presented with a right-wing or left-wing situation.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Thu Feb 14th, 2013 at 02:36:16 AM EST
[ Parent ]
I thought ECbankers were unimpeachable...

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Thu Feb 14th, 2013 at 03:24:17 PM EST
[ Parent ]
Imagine that tomorrow they all became (literally, not figuratively as now) brain-dead, while still alive. Do you doubt that a solution would be found to replace them?

Accusation of criminal treason would probably at least trigger a temporary replacement. Especially if they were to act in a not insanely far right wet dream commie way.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Fri Feb 15th, 2013 at 04:35:25 AM EST
[ Parent ]
A memberstates parlament-appointed central bank borad can fire their CB boss (thus changing on of the heads at ECB), though the CB boss has the right to appeal that to the Court. So that is the mechanism, but in order to affect ECB decisions a majority of euro-states must do it at roughly the same time.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Fri Feb 15th, 2013 at 09:48:18 AM EST
[ Parent ]
There's a fundamental contradiction between the doctrine of CB independence and the insistence on a tight definition (and the tightest interpretation of that definition) of what the CB is allowed to do.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Feb 14th, 2013 at 04:00:42 PM EST
[ Parent ]
The doctrine of central bank independence has always been a shell game designed to protect Lysenkoist idiocy from public censure.

There is no contradiction at all in enshrining far-right policies into the constitution and then setting up an economic junta which is unaccountable as long as it enforce those policies.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 14th, 2013 at 04:13:24 PM EST
[ Parent ]
No contradiction at all -- from the point of view those who wish to impose those far-right policies.

But for the majority of public opinion in Europe today, the contradiction between the doctrine of independence and the fact of tight limits on independence should be a perfectly perceptible one -- if it were given sufficient play, of course (admittedly not easy to bring about).

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Feb 14th, 2013 at 04:20:07 PM EST
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At the rate things are deteriorating I would not be too surprised if there were violence directed at the persons comprising the ECB board. Why should they feel so smug and safe when the policies they are enforcing are costing the lives of thousands of people each year. Those people have relatives and some may have some idea of taking personal revenge. This is not an unknown concept in some of the affected countries.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Feb 15th, 2013 at 01:18:21 AM EST
[ Parent ]
"Central bank independence, interpreted fundamentalistically as a prohibition of monetary financing of fiscal policy, is part of the German basic law. "

Avtually no. Part of the european treaties, yes. But the independence of the bundesbank rested on a ordinary law.

>The entire German political establishment appears to agree that the ECB is configured as it should be<

A good part of said establishment now actually thinks that the ECB is misconfigured, Germany only having as much of a vote as the smaller states.

by IM on Thu Feb 21st, 2013 at 03:38:55 PM EST
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Apply all legal measures of persuasion and pressure you can think of until their desires change, and their new course of action is every bit as formally unstoppable.

Not so: Presumably the ECB and/or its board could be prosecuted for violating Art. 123A.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 14th, 2013 at 03:14:57 PM EST
[ Parent ]
Can EU institutions and/or officials be prosecuted on the federal level for violating treaties? If so, who prosecutes, what is the procedure and what punishments are possible?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se
by A swedish kind of death on Thu Feb 14th, 2013 at 03:29:23 PM EST
[ Parent ]
I don't know, but I'd assume that it would work the same way as it does when a member state is sanctioned for breach of its treaty obligations. Particularly since the Eurosystem doesn't actually conduct any operations at the ECB level - the operational side is still carried out at the local member central bank.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Feb 14th, 2013 at 03:42:34 PM EST
[ Parent ]

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