14 Leaders The EconomistFebruary 22nd 2020
12 seeping away of German voters’ trust in the euro.
Like most Germans, the Bundesbank has a horror of debt-mo-
netisation and an aversion to inflation. Its austere philosophy
has come into conflict with the ecb’s efforts to hold the euro to-
gether and prop up growth. In a court case in 2013 Jens Weid-
mann, the Bundesbank’s boss, gave evidence against Mr Draghi’s
commitment to do “whatever it takes” to save the euro through
unlimited bond purchases (outright-monetary transactions, or
omts). By the end of Mr Draghi’s term, the quarrel seemed perso-
nal. Interest-rate cuts and the resumption of quantitative easing
(qe)last autumn prompted a backlash in the German press. Mr
Weidmann has supported rate cuts, but German
public opinion has turned against the ecbon his
watch. Bild, a German tabloid, has depicted Mr
Draghi as a vampire feeding on German savings.
All central banks benefit from debate—in-
deed, some could do with more of it. But the
stand-off could harm the ecb. When a downturn
strikes, it cannot afford to be side-tracked by in-
fighting. And recession is an ever-present risk.
In the last quarter of 2019 output either fell or stagnated in
France, Germany and Italy, which together make up around two-
thirds of the euro zone’s gdp. Because interest rates are already
negative, the ecb’s best hope for providing stimulus would be to
buy more bonds. But this would eventually require raising the
ecb’s self-imposed limits on the share of a country’s debt it can
hold. The Bundesbank would almost certainly resist that.
A more insidious risk is a leaching away of faith in the single
currency from its largest member state. That would be a disaster,
undermining the viability of the euro in the long run, and posing
a mortal threat to both the ecband the Bundesbank.Both sides have work to do. The Bundesbank is entitled to its
own philosophy. But it needs to accept that the facts have
changed. Its fears that loose monetary policy would cause a
surge in inflation have not materialised. Agreeing to a proposal
to make the ecb’s inflation target symmetrical around 2%, by re-
moving the “close to, but below” wording, would signal that it is
principled but not ideological. And it could wield its influence at
home more effectively. Isabel Schnabel, Germany’s new pick for
the ecb’s executive board, has begun to take on misconceptions
of its policy—showing, for instance, that real interest rates on
savings deposits in Germany are close to their average over the
past 24 years. Mr Weidmann could do more to
defend collective decisions.
In return for the Bundesbank taking more re-
sponsibility, the ecbshould try to bring it back
into the fold. On paper it makes decisions by
consensus. But by the end of Mr Draghi’s term
the dissenters were being left by the wayside.
So far the signs are promising. Ms Lagarde’s
arrival makes it easier to leave behind the emo-
tional baggage of the Draghi era. She has vowed to be more inclu-
sive and launched a wide-ranging strategy review. This is an op-
portunity for Mr Weidmann. To his credit, he has become less
uncompromising, saying last year that omts are part of the ecb’s
toolkit, and cautioning against Germany fetishising its own fis-
cal rules. Ironing out the differences today could spare the ecb
from a speculative attack in the next recession.
The Bundesbank is still a mighty intellectual and institution-
al force. But that will count for little if its intransigence causes
Europe’s economy to weaken needlessly. And if the single cur-
rency falters, obstinacy will be self-defeating. 7I
n september lastyear, when the Supreme Court overruled a
government attempt to suspend Parliament during the Brexit
negotiations, Boris Johnson called the decision “unusual”, but a
source from Number 10 was franker: the court had made “a seri-
ous mistake in extending its reach into these political matters”.
Payback, it seems, is coming. Mr Johnson has appointed a new
attorney-general, Suella Braverman, who has made clear her en-
thusiasm for curbing the judiciary’s power (see Britain section).
That the power of judges has grown in the past few decades is
not in doubt. This is the consequence of three factors: the pub-
lic’s growing enthusiasm for taking the government to court
through judicial review; the spread of law to corners of people’s
lives into which it did not previously much intrude (such as fam-
ily life and the environment); and the Blair government’s es-
pousal of constitutional reform.
Among Britain’s messy constitutional arrangements, the
rules governing the judiciary’s role were particularly anoma-
lous. The top judges, for instance, sat in the House of Lords, the
legislature’s second chamber. Tony Blair’s new dispensation
took the judges out of the Lords and housed them in a new Su-
preme Court over the road, removed the power of appointing
judges from the government and gave it to an independent Judi-cial Appointments Commission, and extended the judges’ pow-
ers through the Human Rights Act (hra).
This government takes the view that the balance of power has
tipped too far from politicians and towards an unelected caste of
lawyers whose views are out of kilter with voters’. The argument
is not driven purely by the judges’ willingness to put Mr John-
son’s nose out of joint. There is a genuine worry among its pro-
ponents about a popular backlash against Britain’s system of
government, of which Brexit is Exhibit a. Judicial decisions—
over the rights of foreign criminals to avoid deportation, for in-
stance, or British forces’ treatment of enemy fighters in the wars
in Afghanistan and Iraq, or Muslim clerics preaching hatred of
Britain—that are out of line with public opinion are said to be
stoking popular anger. In an article on the Conservative Home
website published last month, which was widely interpreted as a
job application, Ms Braverman criticised the judiciary for “tres-
pass[ing] into inherently political terrain for which a legal an-
swer is wholly insufficient”.
The best way, goes this argument, of discouraging newspa-
pers from labelling judges “enemies of the people”—as the Daily
Maildid when the High Court decided that Parliament should
have oversight of a decision about Brexit—is to reassert a degreeBoris v the judges
The government would like to restrict the power and independence of the judiciary. It shouldn’tBritain’s legal system