The European Central Bank between the Financial Crisis and Populisms

Macchiarelli, Corrado; Monti, Mara; Wiesner, Claudia; Diessner, Sebastian

doi:10.1007/978-3-030-44348-1

Cited by 13 publications

(6 citation statements)

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“…Given that it was predictable, one might be tempted to conclude that the ECB simply did not care about the consequences for its reputation and legitimacy. There is little doubt, however, that its sensitivity toward the risks of political contestation increased throughout this period (Macchiarelli et al 2020;Moschella, Pinto, and Martocchia Diodati 2020;Schmidt 2020). As shown in figure 3, the frequency with which executive board members mentioned "legitimacy" in their public speeches peaked between 2011 and 2015.…”

Section: Structural Reforms To Save the Currency (2010-14)mentioning

confidence: 98%

“…In our case, whereas central banking had been thoroughly depoliticized under the inflation targeting regime, the massive scale of central bank interventions following the global financial crisis of 2008 has led to a repoliticization. Central banks became exposed to a much higher level of public scrutiny-from their political principals but also, and especially, from the broader public (Macchiarelli et al 2020;Riles 2018;Tortola 2020). It is therefore not surprising that, although on paper their independence has remained intact, central banks-including the ECB-have become much more sensitive to reputational concerns (Moschella and Pinto 2019;Moschella, Pinto, and Martocchia Diodati 2020).…”

Section: Theorizing Central Bank Agencymentioning

confidence: 99%

“…While its statutory independence protects the ECB against political backlash in the realm of monetary policy proper, its engagement in social and labor market policies in member-states does not fall under this protection. On the contrary, weighing in on domestic reform debates and prescribing specific structural adjustment paths can be expected to expose the ECB to political contestation and challenges to its legitimacy (Macchiarelli et al 2020;Schmidt 2020). We thus submit that while the ECB is empowered, and willing, to push the boundaries of its mandate to maintain monetary governability, it will seek to avoid levels of political contestation that would prove detrimental to its legitimacy.…”

Section: Theorizing Central Bank Agencymentioning

confidence: 99%

“…With regard to legitimacy, the ECB's prominent role during the EMU sovereign debt crisis had ushered in a period of intense public contestation, both from the left and from the right (Macchiarelli et al 2020). This contestation manifested itself in a variety of ways across the euro area-in the courts, in the street, and, most importantly, in parliaments.…”

Section: Deflationmentioning

confidence: 99%

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Structure, Agency, and Structural Reform: The Case of the European Central Bank

Braun,

Di Carlo,

Diessner

et al. 2024

Perspect. polit.

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Monetary and financial integration has been shown to increase the pressure on states to liberalize social and labor market policies. If structures do not come with instruction sheets, how do monetary regime pressures translate into policy? Through a case study of the euro area, we show that central banks play an underappreciated role in this process. Using mixed methods to analyze a large amount of data, including the complete corpus of speeches, we trace the evolution of the European Central Bank’s advocacy for structural reforms between 1999 and 2019. To explain the ECB’s activism in a policy area beyond its mandate, we theorize the ECB as navigating a dilemma between governability and legitimacy. Handed a monetary regime under which flexible labor markets were seen as a condition for governability, the ECB saw no alternative but to push governments toward structural reforms, despite the reputational risks. The ECB ended its advocacy when increasing political backlash coincided with a structural regime shift from an inflationary to a deflationary environment.

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Section: Structural Reforms To Save the Currency (2010-14)mentioning

confidence: 98%

Section: Theorizing Central Bank Agencymentioning

confidence: 99%

Section: Theorizing Central Bank Agencymentioning

confidence: 99%

Section: Deflationmentioning

confidence: 99%

See 2 more Smart Citations

Structure, Agency, and Structural Reform: The Case of the European Central Bank

Braun,

Di Carlo,

Diessner

et al. 2024

Perspect. polit.

Self Cite

View full text Add to dashboard Cite

show abstract

“…In doing so, we significantly contribute to the literature on the (De-)Politicisation of the ECB (Schneider and Sandbeck, 2019;Tortola, 2020) by showing how it has become "Re-Politicised" through its use of financial markets. Our understanding of Re-Politicisation builds on previous notions of the concept but is distinctive in our focus on the means through which it is achieved coupled with the argument that fragmentation led to the re-politicisation of the ECB, a contribution to the primarily political justifications discussed in the literature (Goodhart and Lastra, 2018;Macchiarelli et al, 2020). Similarly, we contribute to the emerging literature on the relations between capital and money markets (and by extension of the Capital Market Union of the Eurozone) and governments and regulatory authorities (Epstein and Rhodes, 2018;Kalaitzake, 2019) by offering a systemic approach to the analysis of these relations within a precise monetary regime.…”

Section: Introductionmentioning

confidence: 99%

From Policy to Regime: the changing posture of the ECB between liquidity and collateral through the lens of Monetary Regime

Giordano,

Goghie

2023

Preprint

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The evolution of the European Central Bank (ECB) and of the forms of monetary policy implemented in the Eurozone since its inception outline a more radical shift in the posture of the ECB rather than the simple recourse to new instruments of monetary policy. This paper explores the concept of monetary regime to understand under a systemic lens the changes occurred in the conventional and unconventional monetary policy operations, and how they have shaped the position of the ECB within the increasingly market-based financial system. We argue that the features of a monetary regime affect the processes of de- and re-politicization of the ECB. To do so, we explore three key but under-studied changes in the operations of the ECB: the shift from a corridor to a floor system with the fixed-rate full allotment (FRFA) procedure for its refinancing operations in 2008, the implementation of Securities Lending in the second half of the 2010s, and the introduction of the Transmission Protection Mechanism in 2022. These events, in turn, hinge on the evolving dynamics between liquidity and collateral, which not only define the frame of the monetary regime, but also allow for the central bank’s operations to have significant, though involuntary and indirect, fiscal consequences. Ultimately, this paper highlights the shift from monetary and fiscal concerns to financial ones, thus arguing that macroeconomic policies have become subordinated to financial logics that imply an increasing blurring of the separations between monetary and fiscal spheres.

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The War Against Ukraine, the Changing World Order and the Conflict Between Democracy and Autocracy

Wiesner

2024

The War Against Ukraine and the EU

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This chapter discusses the challenges that the war against Ukraine has brought for the EU, putting particular emphasis on the question as to what extent these are linked to a conflict between liberal democracy and autocracy. The EU and its Member States are having to reposition themselves in a changing world order that is no longer liberal, but at least multipolar. There are new political realities, not only in political and economic, but also in ideational terms. Adjusting to this new setting is difficult for manifold good reasons: China is trying to gain (geo)political and economic power and influence; several big states abstained from voting on condemnation of the Russian invasion in the UN General Assembly; and a presidential election is coming up in the USA in 2024. With regard to the EU itself, Ukraine, Georgia and Moldova want to become EU members, while the EU already faces rule-of-law issues with Poland, Hungary, Romania and Bulgaria. In all this, the war is often discussed as a conflict between an autocratic regime on the one hand and the liberal democracies of Europe and the EU, to which Ukraine wants to belong, on the other. However, liberal democracy is also under threat in the EU itself and not only from outside the EU. Authoritarian tendencies and right-wing populist parties are on the rise in several EU states; there is visible democratic deconsolidation, i.e. citizens losing trust in representative democracy, and democratic backsliding. Consequently, for the EU to defend its values and liberal democracy is a challenge not only externally, but also internally. The war only amplifies these multiple tensions.

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The European Central Bank between the Financial Crisis and Populisms

Cited by 13 publications

References 35 publications

Structure, Agency, and Structural Reform: The Case of the European Central Bank

Structure, Agency, and Structural Reform: The Case of the European Central Bank

From Policy to Regime: the changing posture of the ECB between liquidity and collateral through the lens of Monetary Regime

The War Against Ukraine, the Changing World Order and the Conflict Between Democracy and Autocracy

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