The European Central Bank’s decision to buy bonds in support of European Union efforts to bring down borrowing costs is not a defeat for Germany, which opposed the program, former ECB Executive Board member Lorenzo Bini Smaghi wrote in a letter in la Repubblica.
“Members of the governing council make their decisions based on the interest of the euro zone as a whole,” he wrote in the Rome-based paper. “Decisions don’t represent the opinions of a country, of a government or of national central banks.”
For members to act independently of national interest is “essential to guarantee the independence of the central bank,” Bini Smaghi said.
Bini Smaghi also said that ECB President Mario Draghi wasn’t wading into the political realm when he declared the euro irreversible. Under the Maastricht Treaty that established the single currency, there is no mechanism for a country to abandon the euro, he wrote. The ECB ability to carry out monetary policy is also based on the premise that the euro is irreversible because “any doubt that the euro could break up or that a country could leave would generate immediate financial instability,” he wrote.