As the ECB turns 20, Italy spoils its party

The European Central Bank was founded 20 years ago today in Frankfurt to keep prices stable. But years of crisis have put it under pressure to stretch that mandate to saving the euro as such. And now there’s the populist government in Rome.

By Jan Mallien and Jeremy Gray

Arguably, the seeds of future conflict were already sown when the European Central Bank, the monetary lynchpin of the euro zone, opened its doors with great fanfare on June 1, 1998. The first president was a Dutchman, Wim Duisenberg. The second was a Frenchman, Jean-Claude Trichet. The third and current one is an Italian, Mario Draghi. And all three have resolutely stood their ground against the demands of Europe’s self-serving politicians.

Yet the euro has always been a political project, beginning with a softening of the EU’s debt criteria in the early 2000s to enable iffy candidates to join the euro club, and to keep its more profligate spenders happy. (Germany, though fond of preaching financial restraint, has for years exceeded the EU’s limits on outstanding debt of 60 percent of GDP.)