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There is no substantial judicial review of ECB policy decisions.
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The AG has interesting things to say on market speculation. The GCC, largely relying on the expertise of the Bundesbank, pushed a market fundamentalist line on the matter: whatever risk spreads may be, they reflect nothing but market fundamentals. Hence, the central bank should not mess with them as that would undermine market discipline, distort prices, provoke moral hazard, etc. The AG takes a candidly different view, on numerous occasions referring to market speculation as undermining economies and preventing fundamentals from asserting themselves. In such instances the ECB is justified to step in and correct destabilizing excesses and price distortions. The AG dodges the issue of how to determine "correct" market prices. The ECB should simply use its discretion. The AG goes out of its way to defend the ECB's independence (i.e., unchecked discretion), suggesting that no court should challenge its expertise or question its intentions:
_The ECB must accordingly be afforded a broad discretion for the purpose of framing and implementing the Union's monetary policy. The Courts, when reviewing the ECB's activity, must therefore avoid the risk of supplanting the Bank, by venturing into a highly technical terrain in which it is necessary to have an expertise and experience which, according to the Treaties, devolves solely upon the ECB. Therefore, the intensity of judicial review of the ECB's activity, its mandatory nature aside, must be characterised by a considerable degree of caution (AG 2015, No. 111).
It was of course always something of a curiosity that Germany, the world champion of central bank independence, should see its constitutional court challenge the ECB's independent judgment, and with the Bundesbank, the ECB's blueprint, as its "chief advisor" by its side. So much for the realities of today's intra-European power politics.
(Jörg Bibow, January 14, 2015)

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Mon Mar 16th, 2015 at 01:24:07 PM EST
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