The European Conservatives and Reformists (ECR) Group called on the European Parliament in Strasbourg on May 17 to show zero tolerance to violations by the European Central Bank for political reasons.
The group warned that the bank’s zero interest policy is threatening the prosperity of the bloc to achieve short-term success.
“The ECB is acting politically and unrestrained. The ECB is conscious of the risk of inflation as a consequence of its low-interest policy,” said ECR MEP Joachim Starbatty, who is an economics professor. “The cheap money puts pensions and insurances of the European citizens and the banking systems at risk. It also leads to an overheating of property markets. It makes the citizens poorer every day, but this fact gets adeptly ignored.”
Starbatty urged the European Parliament to review the mandate of the ECB and to work towards a right of withdrawal for euro-countries for which the euro is too strong.
Since March 2015, the ECB has been buying state and corporate bonds of up to €80bn a month on the secondary market.
“The monetary policy of the European Central Bank only produces a flash in the pan and is highly dangerous in the long run,” added Starbatty . “The reason for economic stagnation in the south of the Eurozone is a false relative price. Incorrect relative prices cannot be matched by money printing.
“The common exchange rate is a straightjacket in which Greece impoverishes and Germany has artificial records in exports.”
According to Starbatty, the zero-interest rate policy of the ECB contains an incalculable long-term risk. “It punishes savers, fuels asset price bubbles and endangers the banking and insurance systems.”