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The Contender
Con (against)
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Is the European Central Bank responsible for the crisis in Europe ?

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Post Voting Period
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Voting Style: Open Point System: 7 Point
Started: 6/12/2012 Category: Economics
Updated: 4 years ago Status: Post Voting Period
Viewed: 1,822 times Debate No: 24242
Debate Rounds (3)
Comments (8)
Votes (1)




The European Union(EU) consisting of 27member states in Europe has a combined population of over 500 million inhabitants, or 7.3percent of the world population.
It generated a nominal GDP of 17.6 trillion US dollars, representing approx. 20percent of the global GDP when measured in terms of purchasing power parity.
( However, many of the member countries face the worst recession since the end of World War Second. The basic idea of EU which aims at integration and cooperation economically and politically among member states is being deteriorated these days.
I believe the main cause of the predicament comes from the existence of the European Central Bank (ECB).
In this debate Round 1 is acceptance. Round 2 is main arguments. Round 3 is rebuttal and conclusion.
I hope someone intertested in this topic accept the debate and discuss.


I accept. Due to the debate basically necessitating a counterplan, I am going to suggest that the cause of the EU reaching recession was a combination of American loaning systems (and their duplication around the developed world) and european nations improper abidence to regulation. I also wish to define the ECB as that which administers and advises the monetary policies of the 17 countries which accept it as an authority. For reference, the EFSF has no place in this debate due to it being timed at 2010, and thus too late to be a cause, and it's attempts to solve the problem are irrelevant unless they began in 2007.

Further, the crisis in Europe is defined as the credit crunch in 2007.

Finally, I repeat the commonly accepted rules of no plagiarism from another source without citation.
Debate Round No. 1


I thank Con for accepting the debate. First of all, in this debate I use the word ``crisis`` that means serious economic and social problems like huge government deficit and mass unemployment facing Europe these days.
According to the news report, eurozone countries face unemployment rate at record high 11percent.( ``The 17-nation eurozone`s unemployment rate reached the highest level since the creation of the common currency 13 years ago, climbing to 11percent in Epril as employers slashed 110,000jobs.``
( As the same report points out, the employers are blamed for the recent economic and social crisis in Europe because they introduce the business strategy to reduce the number of their employees to survive in fierce global competition.

However, in my opinion the main cause comes from the existence of European Central Bank(ECB). I define the basic tasks and roles of the Bank. The first is that ``the primary objectives of the ECB is to maintain price stability within the Eurozone, which is the same as keeping inflation. The Governing Council defined price stability as inflation of around 2percent.``( Second is that ECB requires member countries to keep the deficit of the central government at target level. For example, ``For their mutual assurance and stability of the currency, members of the eurozone have to respect the Stability and Growth Pact , which sets agreed limits on deficits and national debt, with associated sanctions for deviation. The Pact originally set a limit of 3 percent of GDP for the yearly deficit of all eurozone member states, with fines for any state which exceeded this amount.``(http://en.

The important thing is that the monetary and financial policy of all eorozone countries are influenced, controlled and managed by the ECB. Therefore, it is not too much to say that each country is robbed of their sovereignty.
And governments can not introduce the economic policy to stimulate their domestic demand and to promote export.
I believe the only solution to the balance-of-payment deficit is to devalue the euro against Japanese yen and U.S.dollar.
This contributes to improving competitiveness in Greece because ``Greece`s export items consist of refined petroleum products, some chemicals, shipping and tourism.``(Devalue the euro to help Europe, by Dipak Basu, The Japan Times,
May 27,2012)
From above mentioned arguments I believe ECB is responsible for the ECB.


Due to the fact I have no motivation for this today (I had loads of motivation yesterday, why didn't I just write it then?), I'm going to follow common debate style and just pose my own argument of what should be for blame.


The European crisis started in 2007, and was an incredibly massive impact on the Eurozone. However, what was the origin of all things? Well, for that we need to go back to the ECB, and the fiscal policies all the Eurozone countries agreed on. Germany, France, Spain, Italy and others all agreed to rules which stated that they shall, among other things, limit structural borrowing to 0.5%, and general borrowing to 3%. [1]

The problem

The ECB put in these restrictions. The countries all agreed to them. Thus, they thought they were all thought of as doable. Most commentators also agreed[2]. This was called the Stability and Growth Pact.

The Stability and growth pact

The Stability and Growth Pact (SGP) is a rule-based framework for the coordination of national fiscal policies in the economic and monetary union (EMU). It was established to safeguard sound public finances, an important requirement for EMU to function properly. The Pact consists of a preventive and a dissuasive arm.

Under the provisions of the preventive arm, Member States must submit annual stability or convergence programmes, showing how they intend to achieve or safeguard sound fiscal positions in the medium term taking into account the impending budgetary impact of population aging. The Commission assesses these programmes and the Council gives its Opinion on them. The preventive arm includes two policy instruments.

The dissuasive part of the Pact governs the excessive deficit procedure (EDP). The EDP is triggered by the deficit breaching the 3% of GDP threshold of the Treaty. If it is decided that the deficit is excessive in the meaning of the Treaty, the Council issues recommendations to the Member States concerned to correct the excessive deficit and gives a time frame for doing so. Non compliance with the recommendations triggers further steps in the procedures, including for euro area Member States the possibility of sanctions.

The actual problem

The major problem was how countries would not actually fully follow these guidelines. Indeed, they would fully flaunt them. Germany and Italy flaunted the rules first. The countries both went over the limit by massive amounts. Starting in 2003, the countries would go over the limit repeatedly. However, because these countries promised to reach the SGP targets as soon as possible, the stronger actions would not take massive moves against them.

Who's fault is this?

Well of course it is primarily the governments. Italy, Germany, and France regularly broke the rules, and did so repeatedly. Their lack of desire to follow the SGP means that, essentially, these countries are the ones at fault. And the secondary group at fault is the EC - The European Commission. This group was supposed to limit and control the countries. However, their lack of actually doing anything, even though they could impose fines of 0.5% of GDP to countries, meant that they, not the ECB, are at fault.

But the ECB Manages economic policy!

The problem is that if they did, the recession would probably arguably not be so bad. However, they had no control, as the countries paid no attention to the EC: In 2006, Germany's public debt was 66.8% of GDP and Greece's was over 100%[3]. The ECB, though, was not under this jurisdiction.

To conclude, the ECB had no impact over monetary policy: that is the original problem. The countries are at fault, not the ECB.

Debate Round No. 2


This round is devided into two parts. First is rebuttal. Second is my conclusion.
1. Rebuttal : You point out that the European Commision and the governments of member countries are at fault not the ECB(European Central Bank). However, I understand that ECB has something to do with the EC. The head of both
organizations have held meetings at regular intervals to discuss fiscal and monetary problems of member countries.
The reason is that European Union is governed by seven institutions and the ECB is one of them.
Therefore, I believe the ECB is partly responsible for the crisis in Europe.

2. Conclusion: In relation to the ECB, we must discuss the role of ERM(Exchange Rate Mechanism).
It is closely linked to the policy adopted by the ECB. The ajustment mechanism of ERM has a similarity to the gold standard. Its main objective is to reduce exchange rate variability and to achieve monetary stability in Europe.

The important thing is that the central bank must controll and keep the exchange rate according to the volume of the foreign exchange reserves and the growth of the financial resources of the national government.
For example, Greece and Spain have been urged to appreciate the foreign exchange rate for coping with the huge deficit of their governments. Therefore, this situation caused poor export activity and the increase of the unemployment rate. This cases show that the sovereignty of both governments is robbed of by the ECB.
In concluding my arguments, I want to say that Spain has been too dependent on the ECB. The central bank has been less active in supervising private banks. This contributed to triggering bad loans among them for people who are interested in buying their homes. For example, ``the debt of the Spanish banking system totals 305percent of GDP, or about 3.3trillion euro.``(An EU `banking union` will make things worse, by Hans- Werner Sinn, The Japan Times, June 16,2012). We must admit that the ECB is responsible for the serious problems facing Europe.
I thank Con for good debate.


I'll post rebuttals, then my concluding argument

ECB and EC contact

The two have very few meetings in reality. The ECB and EC have only officially met (though members from both unofficially meet up to around a half dozen times in the last decade) once. Like all other committees and comissions and groups in the EU, they can meet with any other group[1] but do so very rarely, as of the size of the EU, the decentralised committees, and the nature of the two distinct roles: one being primarily advisory roles to the European Parliament and other committees, whilst the other (the ECB) lends out the money to countries. They meet, but not as much as my opponent suggests. However, it should be noted in an aside that since 2008, the roles of the two have changed and they are in a lot more regular meets, but as this is after the recession's cause, this is an irrelevancy.


Firstly, this is a new argument, and thus it is poor conduct: as an older member of the debating community, I hope my opponent realises this. I shall refer to my opponent's example, though, and form a turn from it.

Greece, Spain, and the EC(B)

If we assume that the ECB and EC meet regularly and thus Greece's mistakes can strenuously be linked to the ECB, we have to realise something. Greece broke 3 of the 9 rules set up by the EC(B), and lied repeatedly about its stats. By comparison, Spain, as "top of the class", broke no rules[2]. Thus, Greece's loan comes with grave stipulations. Now, why did Spain want a loan? The thing is, the banks aren't that bad. Yes, the 305% GDP debt of Spanish banks sound bad, but compare that to Britain: We have over 1000% GDP debt in the banks[3] and US is at 400% at last check. This 305% isn't surprising, nor large, nor dangerous. Germany is similar: there is no major threat here. Nor is it a massive problem. Nor is this a cause by any stretch: 4 years into the crisis is not a cause of the crisis.


The problem is on the EU countries, as I showed in Round 2, coupled partially by the EC. I have shown how the ECB deals with other issues, and the issues it deals with does not have that large an impact. Thank you for reading.

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Debate Round No. 3
8 comments have been posted on this debate. Showing 1 through 8 records.
Posted by Stephen_Hawkins 4 years ago
Sorry paradise, I realise that came across badly if you're a new member. But posting on someone's debate, which has not finished, about an argument you would lose is really very wrong. Don't do it, essentially. It is one of the most irritating things when your opponent basically copies from the comments, or just uses an argument from the comments. It's even worse when you were going to use that argument, but because someone used it in the comments, we (more vet debaters) can't use it, due to the fact that it would now come across as stealing someone else's. It's really irritating.
Posted by goldman 4 years ago
brian-eggleston, I thank you for sending me a comment. In my opinion many governers of local governments in Japan are not interested in introducing local currencies and they are less willing to challenge for it. These days many local cities face serious unemployment problem. The main reason is that many companies are transferring production facilities to Asian countries where many low-waged workers can be found. Therefore, many local governments are struggling how to stimulate the economy to help younger people find a job. However, unfortunately most of them go to the big cities like Tokyo or Osaka. This situation brings a serious problem that population of Japanese rural areas is decreasing drastically year by year.
Posted by paradisefound 4 years ago
Hey Stephen_hawkins. I'm new to this forum, so have I got the wrong end of the stick about the purpose of comments? I can't see any guidelines in the help facility.
Posted by Stephen_Hawkins 4 years ago
Hey paradise. Guess what? You're not doing this debate. Chiming in on your opinion mid-debate is like standing up in a formal debate and flinging your wang about. Please leave it to those who are actually on stage.
Posted by goldman 4 years ago
My last sentence is revised like this. From above arguments the ECB is responsible for the crisis in Europe.
I apologize for Con.
Posted by goldman 4 years ago
My last sentence is revised like this. From above arguments the ECB is responsible for the crisis in Europe.
I apologize for Con.
Posted by paradisefound 4 years ago
The underlying cause of the economic crisis in Europe is essentially the same as that in the US. And that is inadequate activity in the wealth creating sectors of the economy (i.e. manufacturing), which as a result gives rise to stagnation or reversal of growth.

The European central bank and the unworkable Euro currency may well have exacerbated the situation, buit these do not represent the causes of the crisis.
Posted by brian_eggleston 4 years ago
It is an interesting topic, but it is complex. Not all EU member states have signed up to the euro single currency and there is no central political control, unlike in the US which, in many ways, is used as a model.

Imagine if Japan had a central bank but a different government in each prefecture, and numerous different currencies. How do you think that would work? Not very well, I would wager.
1 votes has been placed for this debate.
Vote Placed by socialpinko 4 years ago
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Total points awarded:03 
Reasons for voting decision: Con argued it was the non-compliance with the rules laid out by the ECB that lead to the various fiscal and credit crisis' of various European countries. Certain countries blatantly flaunted these safeguards put in place and thus Pro is putting the responsibility on the wrong side. We don't put primary responsibility on a cop if someone shoots someone else, even though he might have the responsibility to put restrictions on such activity. Primary responsibility must lie with the perpetrators.