ECB, when monetary policies are wrong, national banks and citizens pay, but those responsible never
That the monetary policy from the European Central Bank may or may not stimulate the economy is a fact. There are no ways that allow the Governments that make up Europe or the European Commissioners to plead a just invocation to best direct European economic policy. The treaty gave broad and full powers of discretion to the ECB and as far as can be seen we succumb to the decisions of the board of the European Central Bank. Why the board?
For a very simple reason: Christine Lagarde is the President of the ECB and at the same time she is supported by a Governing Council made up of Luis de Guindos (vice-president) and members Frank Elderson, Philip R. Lane, Fabio Panetta, Isabel Schnabel, who form the Executive committee. Ergo all the faults, errors and omissions in relation to the euro (and the economy), as well as its quotation are also attributable to these people, knowing full well that the ECB belongs to the central banks of all EU countries and in a certain sense they can be considered as shareholders. These people represent the “shareholders*”.
Every six weeks, the ECB assesses economic and monetary trends and takes monetary policy decisions on its own. The remaining meetings focus on aspects relating to the other tasks and responsibilities of the ECB and the Eurosystem. To ensure the separation of monetary policy and other functions of the ECB from its supervisory tasks, separate meetings of the Governing Council are convened.
Now, if all this is not clear, let’s say that the members of the board are responsible for the European monetary policy and “if they are wrong they do not pay”. On the other hand we always pay, with our companies, with our work, with our families and so on. Is there a remedy for wrong maneuvers by the ECB? No, because none of us can interfere with the decisions taken by Lagarde & C. Then, it must be remembered that if the ECB has budget holes (read the deficit and at the moment we do not know the amount) these must be filled by the Central Banks, pro rata. Question: then the Governments, with the various Parliaments and the European Parliament count for nothing? Maybe, no no, but as Amschel Meyer Rothschild (1744-1812) quoted: “Give me control of a nation’s currency and I won’t care who writes its laws.” You can’t get more cynical than that, but it’s still a bitter truth.
Rarely have I closed an article without proposing a suggestion, this time I want to give two because the ECB should change gear and conform to the needs of the real economy existing in Europe, following and slavishly managing contingent factors without “aligning” with the Federal Reserve (the USA from an economic point of view are 20 years away from Europe, they are a “Nation”, unlike Europe) by revising, if ever possible, the treaty, except that the two main dogmas present, namely: the ECB is untouchable and irreplaceable e l’inflation must be contained within two percent, “point”, are considered to all intents and purposes as a bible where only a god can do and undo. We evaluate all this with the: Condicio sine qua non – Condition without which an event cannot occur.
All central bank governors of all EU countries
*Pierre Wunsch (Governor of the Nationale Bank van België/ Banque Nationale de Belgique), Joachim Nagel (President of the Deutsche Bundesbank), Madis Müller (Governor of the Eesti Pank), Gabriel Makhlouf (Governor of the Banc Ceannais na hÉireann / Central Bank of Ireland) , Yannis Stournaras (Governor of the Bank of Greece) Pablo Hernández de Cos (Governor of the Banco de España), François Villeroy de Galhau (Governor of the Banque de France), Boris Vujčić (Governor of the Hrvatska narodna banka), Ignazio Visco (Governor of the Bank of Italy), Constantinos Herodotou (Governor of the Central Bank of Cyprus) Mārtiņš Kazāks (Governor of Latvijas Banka), Gediminas Šimkus (Chairman of the Board of Directors of Lietuvos bankas), Gaston Reinesch (Governor of the Banque centrale du Luxembourg), Edward Scicluna (Governor of Bank Ċentrali ta’ Malta / Central Bank of Malta), Klaas Knot (President of Nederlandsche Bank), Robert Holzmann (Governor of ella Oesterreichische Nationalbank), Mário Centeno (Governor of Banco de Portugal), Boštjan Vasle (Governor of Banka Slovenije), Peter Kažimír (Governor of Národná banka Slovenska), Olli Rehn (Governor of Suomen Pankki – Finlands Bank).
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