Must-Read: Simon Wren-Lewis: The Non-Independent ECB

Must-Read: Simon Wren-Lewis: The Non-Independent ECB: “The real explanation for the ECB’s actions is much simpler…

…Limiting funding on 28th June was the Greek government’s punishment for failing to agree to the Troika’s terms and calling a referendum the day before. The ECB was not, and never has been, a neutral actor just following the rules of a good central bank. It has always been part of the Troika, and right now it is the Troika’s enforcer…. This is not the first time the ECB has chosen to bow to political pressure…. Just as I do not think it was inevitable that the Eurozone committed itself to austerity, I also think it was possible that the ECB could have been a more independent central bank. The really interesting question is why it has turned out not to be such a bank.

July 17, 2015

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