Prof. Dr. Dirk Meyer
Universität der Bundeswehr
Phone: (+49) 40 6541 2705
Debt Relief as a Last Resort for the Lender of Last Resort?
The coronavirus crisis has led to a sharp increase in the debt-to-GDP ratios. There has thus been a discussion on eurozone debt cancellation. As pointed out by the ECB however, the prohibition of monetary financing represents a great legal hurdle. Our new article introduces an alternative strategy, namely debt relief by the ESCB through an EU debt agency – based on the purchases under the PSPP and PEPP programmes. That could be possible without amending the EU treaties and would avoid negative equity at the central banks. We specifically analyse the effects of two scenarios:
Scenario 1: debt relief based on the credit volume of the €750 billion ‚Next Generation EU‘ recovery fund.
Scenario 2: debt relief of 60% of the pre-crisis 2019 GDP, based on the European Fiscal Compact and the Maastricht Treaty.
NFA and the Asset Purchase Programmes of the Eurosystem: Non-monetary Policy Operations that Restrict the ECB’s Monetary Policy?
Under certain conditions, the Agreement on Net Financial Assets (ANFA) allows the Eurosystem’s national central banks to create central bank money on their own account. The independent position of the ECB requires transparency and a clear distinction between national additional money and the common money creation of the Eurosystem. The fulfilment of these conditions is critically examined against the background of the asset purchase programmes. The consequences are analysed in the framework of an alternative calculation method for net financial assets. As a result, the independence of the ECB is seen as potentially jeopardised by the restrictions on its leeway to conduct monetary policy.
Journal of International Banking Law & Regulation, Vol. 35 (2020), Issue 6, pp. 231-242.
ANFA – A National Licence to Print Money within the Eurosystem?
In 2016, the publication of the so-called ANFA protocol brought the public’s attention to the previously little-noticed opportunity for national central banks to “print” additional money via purchases of securities on their own account. This contribution examines the legal foundations and analyses the varying extent to which the member countries use these regulations. The specific interests, risks and consequences for the countries and the currency union as a whole are explored.
Journal of International Banking Law & Regulation“, Vol. 32 (2017), Issue 12, S. 513-525.
ANFA – National Money Creation as an Existential Threat to the Currency Union?
The recent publication of the previously secret Agreement on Net Financial Assets (ANFA) directed the public’s attention to the possibility that national central banks could create money through purchases of securities on their own account. This paper provides an overview of the legal foundations for ANFA and shows the varying extent to which the member countries use these regulations. What are the interests, risks and consequences for the countries in crisis and the currency union as a whole? Is the ECB properly monitoring ANFA purchases? Could money creation via ANFA act as an explosive device for the currency union?