About six months ago, the economists Klaus Adam and Hans Peter Grüner warned in the FAZ that the ECB would give preferential treatment to countries with high and fragile national debt.
What they predicted has now come to pass: data from the reinvestment of maturing bonds originally purchased by the central bank as part of its pandemic relief program shows a sharp build-up in Italian paper stocks, while German bond stocks were reduced .
This preferential treatment of individuals occurs without any conditions.
For several years now, the central bank has been buying up all of Italy's new debt because private investors at home and abroad are not interested in paper with less than impressive credit ratings given the low interest rates.
The increasingly troubled references of some economists to the manageable burden of the debt for the national budget in Rome due to the low interest rates and the long average term of the Italian debt do not convince private investors who invest money for themselves or for customers.
In order for risk and return to match from their point of view, the bonds would either have to yield higher returns – or Italy would have to pursue a policy more geared towards economic growth and solid public finances.
As long as the ECB ensures solvency, no government has to pursue serious policies.
Reasons why the ECB should not stop providing support can be heard from interested circles, for example: The West must not show any weakness during the Ukraine war.
Or: An end to ECB support would lead to a right-wing government in the fall.
Whatever one might think of these reasons, they have nothing to do with monetary policy.
The ECB is abused by cold-blooded politicians who are primarily driven by their own interests.
But the ECB is also too easy to abuse.
She keeps going down the wrong path.
Only a narrow interpretation of its mandate can give it a foothold.