The European Central Bank and the European Macroeconomic Constitution
From Ensuring Stability to Fighting Crises

An examination of how the European Central Bank was established to ensure stability and prosperity for the euro area.

Klaus Tuori (Author)

9781108488747, Cambridge University Press

Hardback, published 22 September 2022

280 pages
23.5 x 15.8 x 2.4 cm, 0.67 kg

The book is about money, central banking and constitutions. It explains how the European Central Bank was established to ensure stability and prosperity for the euro area. The ECB was guided and controlled by a coherent European Macroeconomic Constitution. However, this model has failed during recurring crises, and the ECB has started to act as the euro area fire brigade. Consequently, it is pushing the boundaries of monetary policy, and with that challenging the accountability mechanisms and fundamentally also the democratic legitimacy of the EMU. The book sheds light on this complex economic-constitutional setting with a view on the future. The imbalance between various new operations and a single price stability objective is difficult to remedy. New objectives of financial stability, economic adjustment and environmental sustainability can cause fundamental ruptures between the ECB's formal role and its actions, and they also dangerously overburden monetary policy moving forward with substantial risks.

1. Introduction – a supranational central bank as a subject
Part I. The ECB as the Central Bank of the European Macroeconomic Constitution: 2. The three foundations of the EMU
3. The principles of the European Macroeconomic Constitution
4. ECB organisation, monetary policy strategy and operational framework
Part II. Crises, ECB Measures and the Macroeconomic Constitution: 5. ECB monetary policy during the financial crisis
6. The prelude to the sovereign debt crisis: events, ECB verbal interventions and EU rescue programmes
7. Selective government bond purchases
8. The ECB's quantitative easing
9. The banking union – the ECB takes over banking supervision
10. ECB measures during the Covid-19 pandemic
Part III. The ECB from a Central Bank of Stability to a Central Bank of Crisis
11. The fate of the European Macroeconomic Constitution
12. The objectives for the ECB and the Macroeconomic Constitution going forward
Epilogue: where do we go from here?.

Subject Areas: International law [LB], Law [L], Monetary economics [KCBM], Macroeconomics [KCB], International relations [JPS]