1. Central Banks:
The example of the
European Central Bank
Workshop at the World Social Forum
Tunis, 28th of March 2013
Stephan Lindner
stlindner@ipn.de

2. The problem
Stephan Lindner
stlindner@ipn.de
The ECB and other big central banks create since the
outbreak of the crisis a lot of money in favor of the
financial industry.
At the same time it tries to collect as much money as
possible from people with low income.
The consequences are on the one side even bigger
bubbles in the financial markets, on the other side a
widening gap between rich and poor.

3. Structure
Stephan Lindner
stlindner@ipn.de
• Basics about the ECB
• Money for the financial industry
• Austerity for the people
• Demands

4. Basics
Stephan Lindner
stlindner@ipn.de

5. Basics
Stephan Lindner
stlindner@ipn.de
• The ECB was founded in the high time of
neoliberalism (market conform)
• The role model was the German Central Bank
(Deutsche Bundesbank)
• Number one priority is price stability
• High degree of autonomy from democratic
processes (independence)

6. Political Influence
Stephan Lindner
stlindner@ipn.de
• Independent from political directives
• Part of the G20, which decided, that no big
bank should go bankruptcy
• Sometimes also present in EU summits and
ministerial meetings (e.g. Euro group)

7. Linkages with financial industry
Stephan Lindner
stlindner@ipn.de
• Mario Draghi was former head of the European
department of Goldman Sachs
• Peter Praet was former chef economist of
Fortis Bank
• National Central Banks played an important
role for the assertion of rescue packages for
banks on national levels

8. The heart of the ECB beats normally
in the rhythm of the financial markets I
Stephan Lindner
stlindner@ipn.de
-1
0
1
2
3
4
5
6
Intrest rate German bonds with duration of 0.5 years
Key interest rate of the EZB
EUROSTOXX50
DAX

9. -2
-1
0
1
2
3
4
5
6
Staatsanleihen
Bundesbank
EZB
Inflation Euro
Inflation D
The heart of the ECB beats normally
in the rhythm of the financial markets II
Stephan Lindner
stlindner@ipn.de

10. Money for the financial industry
Stephan Lindner
stlindner@ipn.de

11. Direct actions in favor of banks
Stephan Lindner
stlindner@ipn.de
• Key interest rate lowered to 0,75%
• Requirements for credit collaterals lowered significantly
• Duration of credits extended to up to 3 years
• amount of credit without limit

12. Assets of the ECB balance sheet
Stephan Lindner
stlindner@ipn.de

13. Austerity for the people
Stephan Lindner
stlindner@ipn.de

14. Enforcement of austerity
Stephan Lindner
stlindner@ipn.de
• Hardliner in the troika, who gives credit only
against self commitment for austerity and whose
credit serves foremost the bailout of creditors of
banks and the recapitalization of banks without
comparable equivalent.
• Buys bonds only against self commitment for
austerity (institutionalized as Last Outright
Monetary Transactions (OMT)

15. Stephan Lindner
stlindner@ipn.de
The European
pyramid of austerity

16. Demands
Stephan Lindner
stlindner@ipn.de

17. Demands I
Stephan Lindner
stlindner@ipn.de
• There has to be an citizen audit to
investigate, what the ECB did in favor of the
financial industry and for what cost.
• The ECB also has to participate in the
cancelation of debt.
• The flooding of banks without comparable
equivalent has to be stopped. For bankrupt
banks there has to be an just insolvent
procedures.

18. Demands II
Stephan Lindner
stlindner@ipn.de
• The goal of monetary policy has to be
broader and not only price stability, but also
sustainable economic development (including
ecological transition, full employment and the
stability of the financial system).
• In this framework there also has to be the
possibility of direct credits to the states.
• Everything has to become more democratic
accountable and transparent.