The Power of the Eurosystem to Promote Environmental Protection
Posted: 30 Aug 2018 Last revised: 30 Jul 2019
Date Written: August 30, 2018
The misalignment of the Corporate Sector Purchase Programme (CSPP), the latest iteration in the development of the Eurosystem’s unconventional measures of monetary policy, with EU environmental global commitments has stirred a lot of political debate in recent months. Critics of the CSPP typically point to article 3 TEU and to the binding nature of the Paris Agreement on the ECB as the main sources of legal obligations for the Eurosystem. This essay puts forward an additional argument: the Eurosystem is bound by article 11 TFEU, which integrates environmental objectives into the mandate of the Eurosystem and requires it to take those objectives into account when designing and implementing monetary policy. On this basis, the essay provides a critical analysis of the validity of the controversial CSPP and explores the potential implications of article 11 TFEU for monetary policy. The essay concludes that, besides a distinctive source of legal obligations, article 11 TFEU represents an opportunity for the Eurosystem to contribute to improving our embryonic understanding of the relationship between climate change and financial stability.
Keywords: monetary policy, climate change, Eurosystem, ECB, principle of integration
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