Whatever it Takes vs Whatever is Legal: The ECB's Problematic Relationship with the Rule of Law

Abstract

The paper offers a reflection on how the ECB approaches its mandate and tests how well its key crisis-response policies and initiatives rest within a framework of law. It is argued that there are limits to doing ‘whatever it takes’, even when things are considered economically necessary. The Union is based on a foundation of law and excessive discretion, warranted though it may be, can undermine the whole basis of the European project. The paper offers a discussion drawing examples from the ECB's interventions in markets, and its decisions in relation to Greece, as a response to the European debt crisis. The paper then moves on to examine the nature of the ECB’s independence within the institutional structures of the EU and to define how the concept of the rule of law is understood within the European institutional setting. The investigation ends by exploring the tensions between European law, institutional decision making and national constitutional law, by looking at the backlash against the expansion of ECB competences in Germany. The paper ultimately argues that doing the right thing is not necessarily compatible with doing the legal thing. The ECB may not have been currently found to violate its mandate, but the link between economic criteria, such as conditionality, and legality (as determined by recent German challenges to Mario Draghi’s choices) is an unsteady platform from which to defend the rule of law in Europe.