October 6, 2014
The draft report of the Committee on Economic and Monetary Affairs of the European Parliament over the regulations and powers of the European Central Bank to impose sanctions (EC No 2532/98), issued on September 17, includes a rather ambiguous, to be polite, provision, entitling the ECB to decide whether to publish or not decisions of its board that could jeopardize the stability of the financial markets. In other words, and with reference to bail-out member-states like Greece, the ECB can delay a publication of a certain sanction or administrative pecuniary penalty up to three (3) years after the date on which the decision was taken.
Connecting the provision of this draft with the “embezzled hearing” of the Commissioner-designate Pierre Moscovici last week, we are in front of a double dilemma: either start deliberating on the executive powers of the ECB and the depth of censorship that we might see it implemented in the months to come (i.e. considering the sensitive case of Greece and the fact that the government is not abiding by troika’s budget goals for 2014-15), or re-consider Mr Moscovici’s strategic plan for more austerity, added with sort of misleading information.
The above draft actually diminishes European Parliament’s checks and balances over ECB. On the one hand, it might be beneficial for certain circumstances, especially in a highly fragile economic and financial environment, but on the other hand the concealment of a decision for up to three years is considered a long period that inevitably creates transparency burdens in every possible respect. For member-states with increasing phenomena of corruption, such a delay could also undermine both investors and depositors and distort the credibility of the banking institutions.
From a similar perspective, ECB’s new strategy to increase its powers in such a manner can definitely lower the influence of the political system, and therefore the executive and influencing power of the European Parliament, in a top-down process affecting also the relationship between the banking institutions and the political systems of the member-states. The debate is crucial for the future of decision-making as well, as the “forced” stability of the banking system in the European Union can alter the current democratic model of policy-making and turn the markets literally dependent to selective information.
For the time being, the governing parties of Greece and of other fractious economies like Spain and Italy that implement austerity measures can only benefit from such a development.Author : Dimitris Rapidis