Did the European Central Bank (ECB) act within its mandate when it shut down Greece’s banks in June 2015? Were the ECB’s actions that led to the imposition of capital controls in Greece legal? These are central questions to which DiEM25 co-founder and Greece’s former finance minister Yanis Varoufakis, and Die Linke member of the European parliament Fabio De Masi, want an answer.
The institution led by Mario Draghi was not certain about the legality of its actions at the height of the negotiations between the Greek government and its creditors in the summer of 2015 – to close a member state’s banks – so it commissioned a private law firm to examine whether those actions were legal. When De Masi approached the ECB president to obtain a copy of the private law firm’s legal opinion, Draghi rejected the MEP’s request on the grounds of ‘attorney-client privilege’.
Varoufakis and De Masi have joined forces to take this matter to the next level by filing a Freedom of Information (FOI) request before the ECB to make the legal opinion it commissioned public. The two holded a press conference on Wednesday, March 8 at the European Parliament in Brussels to explain their initiative.
As Varoufakis pointed during the press conference:
The European Central Bank (ECB) has exorbitant power compared to any other central bank in the world. It is the capacity as it happened in the June of 2015 to close down all the banks of a member-state.
Let's face it: it is the euro crisis which is causing the European Union to be at an advanced state of disintegration.
In June 2015, when the decision by the governing council led to the closure of the Greek banks, it is apparent that the president of the ECB did not feel that he was on solid, legal ground in proceeding with the closure of the big banks. We know this because we know that on the 18th of June, he commissioned a legal opinion from a private law firm on this matter. It is a legal opinion about the extent to which the ECB can be independent of the eurogroup and its political priorities. It is a legal opinion on whether exorbitant power bestowed upon the ECB can be made compatible with democratic process and with independence of the ECB.
Exorbitant power without transparency, without your right, the right of Europeans to have access to legal opinions that were commissioned with their money. This combination of exorbitant power and lack of transparency does not comply with the basic requirements of democratic processes and liberal democracy.
De Masi revealed that:
In October 2014, so prior to the election of SYRIZA government, I was at the ECB with a delegation body economics and monetary affairs committee. A member of the board of directors of the ECB told me very bluntly: well if the Greeks decide to elect SYRIZA, we will basically drain the supply of euros. We will not accept any more Greek government bonds as central bank collateral.