Yves Mersch, Member of the Executive Board of the ECB, delivered a keynote speech at the ESCB Legal Conference, discussing the legal framework governing the ECB’s actions. He emphasized that the ECB has exclusive but narrow competence to define EU monetary policy for maintaining price stability. The European Court of Justice has recognized the ECB’s broad discretion in defining monetary policy, but also insisted on controlling this discretion based on self-imposed constraints. Mersch highlighted the need for the ECB’s measures to be proportionate, not undermine the “no bailout clause,” comply with the prohibition of monetary financing, and respect the principle of an open market economy.
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