ECB review must learn from lessons of Austerity failure – Matt Carthy MEP

Sinn Féin MEP Matt Carthy has commented on the announcement by new European Central Bank President Christine Lagarde that she is to organise the first strategic review of ECB policy since 2003 in the new year.

Carthy, a member of the Economic and Monetary Affairs Committee, was speaking during a parliamentary debate on the appointment of two new members of the ECB’s executive council. 

Lagarde has indicated she intends to continue her predecessor Mario Draghi’s dovish position on monetary policy. She has directly called on the governments who have the fiscal space – meaning Germany, the Netherlands and other northern states – to use it, including by investing in infrastructure projects.

Addressing MEPs in the Strasbourg plenary on Monday evening, Carthy said: “We know that the ECB, going into next year’s strategic review, is a house divided.

“I welcome the new president’s call for fiscal stimulus to be used to complement monetary policy. But the irony is not lost on any of us who’ve been on the receiving end of its threats and blackmail that the ECB has been the chief enforcer of austerity over the past decade.

“Now that the manufacturing base in the northern states, and particularly in Germany, is threatened, the tune is changing.

“The Commission is considering ‘reviewing’ the Stability and Growth Pact. The simple fact is these crude and destructive rules should be binned, full stop.

“The ECB review needs to be more than a bun-fight between hawks and doves.

“We need a serious analysis of the consequences of ECB policy and its impact on people across the Eurozone, including the dangerous housing bubbles pricing a generation out of the market.

“Above all, the ECB needs to face the fact that its policies have helped massively inflate the wealth of a tiny minority, while doing nothing for the poorest.

“All options must be on the table going forward, including direct payments to households and direct green investment.” ENDS