25 November 2021
The ECB Cannot Ignore its Secondary Mandate
The EU Treaties oblige the European Central Bank to support the broader economic policies in the EU. Yet, the ECB has long ignored this part of its mandate. In the recently concluded monetary policy strategy review it only gets a brief mention. As we argue in a new report, this neglect of the ECB’s secondary mandate is illegal and should end as soon as possible. Continue reading >>
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27 May 2020
Passive and Unequal: The Karlsruhe Vision for the Eurozone
The decision of the Bundesverfassungsgericht on the European Central Bank’s PSPP program did not come as a shock. All the critical arguments of that decision can be found explicitly or implicitly in the BVerfG’s referral to the Court of Justice of the EU on 18 July 2017. The real object of the decision of the BVerfG is the economic governance of the Eurozone or rather the big bet of European solidarity and European integration, in the midst of a pandemic even. Continue reading >>
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13 May 2020
Is it a Dance or is it Chicken?
I cut my teeth studying the German Constitutional Court’s relationship with the European Court of Justice. A recent article in the Financial Times used the metaphor of a dance to explain the GCC’s history of pushing back against the ECJ’s authority. In 2001, I called it a game of chicken. I don’t worry that playing chicken with the ECJ inevitably leads to European disintegration. The GCC’s ECB ruling is, however, the wrong decision issued at the wrong time. Economic policy-makers will and should ignore the ruling, and for this reason I expect the GCC to step back from the brink, once again. But harm is nonetheless being inflicted on a tottering global economy, a fragile European project, and a disintegrating popular support for the rule of law. Continue reading >>06 May 2020
Ultra schwierig
„Legal nationalism“, „BVerfG goes nuclear“, „konfuses Urteil“ – trifft die schrille Kritik wirklich den Kern dieses Urteils? Nüchtern betrachtet bleibt es ein aufsehenerregendes Urteil, das aber weder einen kategorialen Bruch des gewachsenen Kooperationsverhältnisses zwischen Karlsruhe und Luxemburg bedeutet, noch der EZB eine ordoliberale Zwangsjacke verabreicht. Continue reading >>27 March 2020
Borrowing Time
When Christine Lagarde announced her first, moderate rescue package, she called upon member states to provide fiscal aid. But the markets showed to have lost confidence in fiscal policy. In the absence of strong monetary policy signals, the slide continued until Lagarde in her second attempt opened the floodgates. Continue reading >>
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15 February 2019
The Political Economy of Capital Controls and Liberalization
In the face of rising global tensions the free flow of direct investment capital across borders is in dispute. The self-evidence of free capital movements since the start of the euro can no longer be taken for granted. Concerns have emerged about the intentions of foreign investors acquiring domestic key industries. Continue reading >>
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