QUESTION: Marty, what do you think about Legarde claiming the top priority of the ECB is climate protection?
ANSWER: The proposition that the primary objective of the ECB should be climate protection is highly questionable even from a legal perspective. The European Treaties created the ECB with the primary function to ensure price stability. Interestingly, the statutory authority also states that the ECB must support the general economic policy of the European Union without prejudice to the objective of price stability. There is nothing legally in the authorization of the ECB to proclaim it will listen now to Al Gore and Jennifer Morgan of Greenpeace who are both manipulating this 16-year-old “person of the year.”
I do not see anything in the authorization of the ECB where it has the legal right or even the obligation to defend the climate. This seems to be a personal agenda, for Greenpeace succeeded in getting into Davos and influenced Europeans who have gone off the deep end. For the ECB to put climate protection as one of the central themes of EU policy is clearly without any legal authority no less precedent. Climate change is not the role of a central bank.
Supporting “green bonds” has been the worst possible investment. We have institutions asking if we could create a portfolio of green investments that do not lose money just so they can claim they are “investing” in green. Any venture into “green” investment is counter to the ECB directive to provide price stability. The ECB must not compromise the objective of price stability, but it is an impossible task to support a green agenda. It seems that the ECB is now interpreting that if the European Commission imposes strict climate policies which will raise the cost of everything and wipe out the German car industry by virtually outlawing the combustion engine. The ECB has considerable political freedom, and power, to enforce a green agenda upon the EU.
This certainly seems to be an agenda that will only further undermine the European economy going into 2032 and increase the drive for separatism.