Black clouds hang over the ECB
The European Central Bank inaugurated its new 1.3 billion euro high-rise offices in Frankfurt, Germany, on March 18, 2015, in a small opening ceremony, but thousands of left-wing demonstrators from Germany and other European countries clashed with police to protest at the ECB’s role in austerity measures in Europe, writes Prince Michael of Liechtenstein.
The alliance of left-wing organisations and trade unions claim the ECB's policy is responsible for misery and unemployment in many European countries, most recently Greece.
Some 350 were hurt, including 150 police and many arrested in riots where police used water cannon as they were pelted with stones and sprayed with pepper. Cars were set on fire, shops smashed and clouds of smoke hung above Frankfurt's skyline.
Protest organisers hypocritically distanced themselves from the vandalism, claiming ignorance. Some had the cheek to blame the large police numbers for the riot.
The question is why this criminal riot was aimed at the ECB rather than politicians, who in reality caused the problems through their irresponsible populist spending?
The ECB is not totally innocent. The role of a Central Bank should be limited to monetary policy, maintaining autonomy from politics and avoiding involvement in fiscal matters. The ECB respected none of these principles.
The latest quantitative easing is not a monetary measure supporting the monetary system, but a programme for purchasing sovereign debt and relieving public finances which are in trouble. It is a fiscal measure.
There are other examples of the ECB's involvement in fiscal and political issues which are beyond its remit. This makes the ECB vulnerable.
Henrique Schneider claimed in a GIS Statement on February 5, 2015, ‘Bring back boring bankers’, that central bankers should carry out their duty to protect the value of the currency and abstain from becoming a political star in the media. Unfortunately, the head of the ECB Mario Draghi has become highly exposed, probably involuntarily, but has helped this by assuming roles outside monetary politics.
The ECB’s costly, shiny new building in Frankfurt is also attracting critics. Maybe these are justified. Mr Draghi’s speech at the inauguration was somewhat overdone when he claimed the building ‘stands as a powerful symbol of what European integration is about’. He also claimed the euro currency reflects what Europeans have in common, now and in future.
The building, and the attitude he expressed in his speech, can be seen as another symbol - a symbol of the hubris administrations have developed and which have caused a huge gap between the population and the bureaucratic ‘elite’.
Mr Draghi's speech can be perceived as arrogant. European integration and the European ideal is a lot more than a currency, although German Chancellor Angela Merkel also once claimed that the end of the euro would mean the end of Europe.
An overblown building in Frankfurt is certainly not a powerful symbol of European integration.
Criminal activities by the demonstrators should be prosecuted. But at the same time, the bank's leadership should consider returning the bank to the modesty required of bankers.