ECB puts the squeeze on indebted nations

The ECB acts as the enforcer for the EU’s creditor countries, who tell it when to cut off liquidity or when to give loans that maintain a facade of solvency, writes Yanis Varoufakis

THE independence of central banks is a vital part of the creed that ‘serious’ policymakers are expected to uphold (privatisation, labour-market ‘flexibility,’ and so on). But what are central banks meant to be independent of? The answer seems obvious: governments.

In this sense, the European Central Bank is quintessential: No single government stands behind it, and it is expressly prohibited from standing behind any of the national governments for which it is central bank. And yet the ECB is the least independent central bank in the developed world.