Since the start of the European sovereignty debt crisis, many countries in Euro zone has been struggling to rescue themselves from the verge of national bankruptcy with fiscal debts and balance-sheet deficits mounting rapidly (Lowenstein, 2010). In the midst of much uncertainty, figuring out a solution that could be potentially effective in resolving the ongoing crisis and kick starting the paralyzing economy in Europe has become a matter of immediate urgency (Schäuble, 2010). European Central Bank has always played an important role in making major economic and fiscal policies within the euro zone, influencing the wider economy of the entire single currency bureau in a profound and significant way.
The article At the crossroads: the euro and its central bank guardian (and savior), written by Jörg Bibow, a well-known German economist whose focus of research is central banking and financial systems and the effects of monetary policy on economic performance, is dedicated to examining and explaining the specific role of European Central Bank on the single currency union. The paper is based on the German banking ideology and applies scientific and historical perspective in the course of the analysis. Strictly-organized in character and logically-sound in nature, the paper thoroughly discusses the role of the continental central bank by using multiple contrasting and explaining, with a view to proposing some suggestions and observations for the benefit of crisis resolution.
As the European sovereign debt crisis started, many countries in the euro area have been trying to save their country's bankrupt fiscal debts and deficits, and rapidly increase the margin of the balance sheet (Lowenstein, 2010). Under uncertainty, finding a solution that may effectively solve the ongoing crisis and start the paralysis economy in Europe has become an urgent problem (2010). The European Central Bank has been playing an important role in formulating the euro area's major economic and fiscal policies and exerting a profound and far-reaching impact on the whole single currency bureau's overall economy.
At the crossroads of the euro central bank guard (savior), by J o RG bibow, a famous German economist, the research focuses on the impact of the central bank and the financial system and monetary policy on economic performance, dedicated to the study and interpretation of the European Central Bank in a single currency union specific role. On the basis of German banking thought, this paper uses scientific and historical views in the process of analysis. Starting from the rigour of nature and logic, this paper probes into the role of the Central Bank of the mainland through multiple comparisons and explanations, with a view to provide some suggestions and suggestions for solving the crisis.
The function of the central bank is historical understanding to regulate the economic stability of public financial security (bibow, 2013). But there is a sound that has completely changed the public's view and brought new changes to the way people see the role of the central bank. Keynes's idea of embracing the world, the central bank is a tool of the government. A country's institutions can maintain control and exercise of power through the government (bibow, 2013). It is clear that he thinks the central bank is the main source of the government's economic monopoly in the currency and banking industry.
In contrast to Keynes's theories, the traditional concept of the central bank, federal bank holding, need to complete separation between public finance and monetary policy, the central bank can fulfill government discipline implementation of the role and not by the state power (bibow, 2013). In this sense, the independence of the bank is crucial to the balance of economy and Politics