Whatever it takes? The European Central Bank's Sovereign Debt Interventions in the Eurozone Crisis

The unprecedented power of the European Central Bank (ECB) in the Eurozone crystallized throughout the crisis. The Bank used its power for enforcing the terms of the sovereign debt contracts in the monetary union and imposing an austerity framework to the debtors of the periphery at the same time. Sovereign debt interventions and the unconventional policy measures by the ECB from 2009 to 2016; their timing, targets and the conditionality, undermine the prevalent perspective in the field of political economy of sovereign debt, attaching a particularity to the sovereign debt contracts because of the lack of enforcement by a third party. In stark contrast, dominant forms of policy making and the pro-cyclicality of the financial markets strengthened the position of the ECB as the enforcer. The impact has been consolidation of the policy levels in the Eurozone - fiscal policy as the bridge between monetary policy on a supranational level and labour reform on national level - and the intermingling of monetary and fiscal policies.