ECB Bond Plan Could Hinder European Democracy

ECB

When the European Central Bank (ECB) announced that it would be happy to make unlimited purchases of sovereign bonds in a bid to save the Euro, not everyone was happy, but beyond not being the solution Europeans were looking for, it could be harming democracy in Europe.

If one were to look at Germany in particular, the ECB’s announcement could have dire implications. All previous European bail-outs had to be approved by the German parliament and then be reviewed by the German courts. However should the ECB go ahead, their bond purchases would not have to follow the same rules. The ECB cannot be overruled by the German government and are not accountable to the German courts.

Jens Weidmann, the head of the Bundesbank, voted against the bond-buying plans and saw a statement issued by the Bundesbank shortly afterwards saying that the ECB’s plans are “tantamount to financing government by printing banknotes”. He doesn’t seem alone in his opinion either as many German’s are also feeling wary of the ECB’s latest strategy.

It’s not just Germany facing these democratic implications, Spain and Italy could be hit hard as well. Should Spain and Italy choose to utilise the ECB’s bond buyout, they would have to agree to certain austerity requirements which essentially would be the loss of national sovereignty and could lead to mass actions by the respective countries voters much like what is currently happening in Greece.

While Draghi should be commended for at least trying to take action and fix the crisis in Europe, some now feel that actions such as these are driving wedges between the European countries rather than keeping them united and setting dangerous precedents for democracy throughout the continent.

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