Whatever it takes? The European Central Bank`s Sovereign Debt Interventions in the Eurozone Crisis

Authors : Ali Rıza GÜNGEN

Pages : 39-52

View : 16 | Download : 12

Publication Date : 2016-11-30

Article Type : Research Paper

Abstract :The unprecedented power of the European Central Bank insert ignore into journalissuearticles values(ECB); in the Eurozone crystallized  throughout the crisis. The Bank used its power for enforcing the terms of the sovereign debt contracts in the monetary union and imposing an austerity framework to the debtors of the periphery  at the same time. Sovereign debt interventions and the unconventional policy measures by the ECB  from 2009 to 2016; their timing, targets and the conditionality, undermine the prevalent perspective  in the eld of political economy of sovereign debt, attaching a particularity to the sovereign debt contracts because of the lack of enforcement by a third party. In stark contrast, dominant forms  of policy making and the pro-cyclicality of the nancial markets strengthened the position of the  ECB as the enforcer. The impact has been consolidation of the policy levels in the Eurozone -fi scal policy as the bridge between monetary policy on a supranational level and labour reform on  national level - and the intermingling of monetary and fiscal policies.
Keywords : Sovereign Debt, Non enforceability, European Central Bank, Eurozone Crisis, Sovereign Debt Intervention