No matter everybody speaks about the nowadays so-called financial fragmentation in the European union single currency area, we should not forget about something really essential, which stems from the set up backgrounds of Europe. On one side, the single euro currency zone has its central bank (i.e. the highly respected European Central Bank), which is responsible for all monetary policy issues and the relevant transmission mechanisms. However, on the other side, when we are to consider the development of the EU government debt anti-crisis actions, it's already really not just a question of financial fragmentation: as it is neither only a monetary problem, nor a pure central bank statutory responsibility. I would like to point out the statutory defined tasks of the ECB, written down and agreed upon in article 3 of the Statute of the European System of Central Banks and of the European Central Bank: i.e. definition and implementation of the monetary policy of the Union; conduct of fx operations; holding and management of the official foreign reserves of the Member states; promotion of smooth operation of payment systems. So, there is nothing here about simple monetary policy intervention, especially when we speak about multi-government autonomous budget expenditures, EU members’ debt crises and European fiscal imbalances. And here we can see how a central bank authority broadens its crisis action plan defining its unconventional policy a new (“liquidity” “outside money”) channel for intervention, which may actually turn out later to be just the start of the level-playing field for further major European Union changes. Actually, so far, maybe this is really inevitable, since fiscal consolidation in Europe is missing, as well a pan-European fiscal authority, and so the Union is really seen to be vulnerable to shocks of this kind. Maybe, considering the current policy framework, this can be dealt only with the decisive and timely central bank actions to save the markets and the economy, which is to replace the missing authority for the establishment of which there is no time. But actions of that kind continue in the long run already and we may only guess what will follow at the next step. And will this unconventional policy become the impetus for a new crisis aftermath European Union with a new statute of the ECB?
What is important here is to take into account that government debt is all about EU-members still existing sovereignty. Therefore, we can ask ourselves is this just a crisis-time central bank monetary policy transmission mechanism? Or is this an awaited crisis aftermath level-playing field for strategical moves towards the introduction of new EU fiscal policies?
Will the ECB continue to be a pure central bank, or it is on its way to use the newly created "sovereignty-bail-out" scheme to develop into an institution, which consolidates powers in the fiscal field too.
There is not a free lunch, right? The game cannot be just about the money printing, crisis-liquidity provisions, bail-outs, monetary policy mechanisms. The question is even not whether the ECB may turn into a "bad-assets-bank" if it continues to intervene in the government debt crisis - because this is not just about bad (toxic/government) assets and government bonds management. It is already about sovereignty purchases by the EU central banking authority. And now this is maybe already not only a crisis measure, but rather a necessary monetary-fiscal hybrid policy balancing. And no one can see the end of it. So, maybe now the game is in the other half of the field – until now we needed central banks’ statutes to speak about central bank autonomy and monetary policy discretion: but now we already need a special EU member states statute speaking either about sovereignty or the lack of it? It is a multi-level game. And now real politics is going hand-in-hand with crisis management.