The European Central Bank

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The European Central Bank monetary policy in
the euro-zone

• European Summer University
• Forum on Economic Policies in Europe
• Dominique Plihon (Attac France)

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Outline

• I/ The ECB Bastille of neoliberalism in Europe
• II/ Alternative monetary policies in Europe

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I/ The ECB Bastille of neoliberalism in Europe

• ECB independent of elected governmements but is
  under the control of (allied to) financial
  markets
• Priority to stability of consumer price, but no
  concern for stability of the price of assets
  (real estate, stock market, exchange rate) gt
  laisser-faire with financial markets
• Wage austerity unemployment (use of the Nairu)
  as major ways to achieve price stability gt
  increase in profit share
• No discrimination between the financing of
  speculative productive activities gt failure to
  control money creation
• No coordination with fiscal policies gt fiscal
  policies constrained by the  Stabilization Plan
  Guidelines 
• No exchange rate policy no international
  coordination

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II/ Alternative monetary policies in Europe

• A radical change in political institutional
  framework
• Dropping the neoliberal monetarist dogma
• gt Democratic control on the ECB
• gt a new architecture for economic policies
  (policy mix, coordination)
• A new conception of monetary policy with respect
  to
• Its targets
• not only inflation, but also social (employement)
  and ecological goals
• Fight financial instability (prevention, not only
  LLR)
• Stability of exchange rate gt exchange rate
  policy (shared competence) gt no more floating
  exchange euro/dollar gt reform of the
  international monetary system
• Its instruments
• More binding and selective (reserve requirements,
  capital controls, )
• Priority to the financing of productive vs
  speculative activities gt control of financial
  groups balance-sheets
• Bank-based rather than market-based financing a
  way to reduce securitization

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