The ECB’s Mandate and Legal Constraints
This paper considers how the ECB can implement its mandate in the current crisis conditions and the legal constraints that exist on its actions. The current position of the euro area economy means the threat to meeting the ECB’s primary objective of price stability stems from the possibility of a long period of below-target inflation. This means the ECB should consider a wide range of stimulative policies that would help it meet both its primary and secondary objectives. The ECB, however, will be constrained by the ECJ’s interpretation of the monetary financing clause and its ability to meet its primary objective (and its independence) could be threatened by the recent German constitutional court judgement which is flawed in both its legal and economic analysis. This document was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on Economic and Monetary Affairs.
In-Depth Analysis
External author
Karl WHELAN
About this document
Publication type
Keyword
- cyclical unemployment
- economic conditions
- economic recession
- ECONOMICS
- employment
- EMPLOYMENT AND WORKING CONDITIONS
- EU institutions and European civil service
- euro area
- European Central Bank
- EUROPEAN UNION
- Eurosystem
- FINANCE
- inflation
- monetary economics
- monetary relations
- powers of the institutions (EU)
- price control
- price stability
- prices
- single monetary policy