Re: Much ado about nothing?

At 22:55 07.02.03 +1100, Bill Mitchell wrote:

>......
>I think the European Bank is totally separate and
>cannot be sacked by any government, is that
>right?

Yes. See excerpts from the 1997 Amsterdam treaty
http://www.eurotreaties.com/emutreaty2.html
where it says:

>......
>ARTICLE 108 (ex Article 107)
>When exercising the powers and carrying out the tasks and duties conferred
>upon them by this Treaty and the Statute of the ESCB [European System of
>Central Banks, - Trond] neither the ECB [European Central Bank], nor a
>national central bank, nor any member of their decision-making bodies shall
>seek or take instructions from Community institutions or bodies, from any
>government of a Member State or from any other body. The Community
>institutions and bodies and the governments of the Member States undertake
>to respect this principle and not to seek to influence the members of the
>decision-making bodies of the ECB or of the national central banks in the
>performance of their tasks.
>.........

Furthermore,

>......
>ARTICLE 106 (ex Article 105 a)
>1. The ECB shall have the exclusive right to authorise the issue of bank
>notes within the Community. The ECB and the national central banks may issue
>such notes. The bank notes issued by the ECB and the national central banks
>shall be the only such notes to have the status of legal tender within the
>Community.
>....

In addition to the right of issuing currency thus being completely removed
from national governments, these governments are also bound by EU statutes
to not run a deficit above 3% of GDP. See
http://www.bloomberg.com/emu/eurocomm.html

Furthermore, from a commentary on
http://www.calavros.com/ecb.htm :

>.........
>The personal independence of the members of the Executive Board, is based on
>the fact that their office term is quite long -8 years- and non renewable.
>In the level of national central banks the governor should be appointed for
>5 years at least. To avoid any political interference he should be relieved
>of his duties only in case that he does not meet the requirements or he is
>considered guilty of a serious misbehavior.
>.......

So, concerning the name of this discussion thread, "Much ado about nothing",
it seems to me that the issue of whether the CB is separated from the gvt.
is an extremely important real-world economic issue, not only a question of
how one chooses to talk about things. At least in the EU (and Norway, even
if we -- thank god -- are not a member).

Trond Andresen
Received on Mon Feb 10 13:48:54 2003