It’s (not only) the economy, stupid: examining the European Central Bank’s marginal attention to the human and social implications of austerity during the euro-area crisis through the lens of organizational culture

Abstract

ABSTRACT Since the global financial crisis central banks expanded their roles and responsibilities and their impact on the economy and society grew significantly. Thus, during the euro-area crisis, the European Central Bank (ECB) engaged in decisions with profound human and societal implications while turning a blind eye towards them. The Bank’s dismissive approach is remarkable given EU institutions duty to respect fundamental rights, and EU’s identity as a human rights protector. Building on literature and interviews with ECB officials, this work suggests that organizational cultural features, i.e. mainstream economic thinking and narrow mandate interpretation steered the Bank towards overlooking the impact of its policies on EU citizens’ rights. While much has been written about central banks and organizational culture, the two spheres have rarely been connected in research. This research addresses the intersection between the two and calls for broader perspective to consider a wider range of factors influencing economic policies.