'It's Nicolas Sarkozy's political head on the block but the ultimate decision belongs to Angela Merkel.'
No, it doesn't. Merkel will do what the Bundestag tells her to do. Germany has a little known ,but important 'special right' to exit the EU if its own policies are threatened by the ECB's inflationary policies.
I am asking you - where is the ESFS without German backing?
Do you believe for a minute that Germany and other Northern EU countries will watch the ECB do as the PIGIS please?
Since you are talking about sovereign deficits and the ECB's duties and legal limitations, let's go straight to the Lisbon Treaty text. Below are the most relevant parts of the Lisbon Treaty governing how the EU is supposed to operate legally (Title VIII - Economic and monetary policy, Chapter 1 - Economic policy (Articles 120-126) and Articles 127, 130 pertaining to the ECB).
Article 122:
1. Without prejudice to any other procedures provided for in the Treaties, the Council, on a proposal from the Commission, may decide, in a spirit of solidarity between Member States, upon the measures appropriate to the economic situation, in particular if severe difficulties arise in the supply of certain products, notably in the area of energy. 2. Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken.
Article 123
1. Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments. 2. Paragraph 1 shall not apply to publicly owned credit institutions which, in the context of the supply of reserves by central banks, shall be given the same treatment by national central banks and the European Central Bank as private credit institutions.
Article 124
Any measure, not based on prudential considerations, establishing privileged access by Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States to financial institutions, shall be prohibited. Article 125
1. The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project. 2. The Council, on a proposal from the Commission and after consulting the European Parliament, may, as required, specify definitions for the application of the prohibitions referred to in Articles 123 and 124 and in this Article.
Yes, i hear all the calls to bend the rules just a bit more here and there...but isn't that the cause of all the problems facing the EU? Why can't the powers that be act within the law? Does corruption solves everything?
