A loyal MR reader, with expertise in this area, writes to me:
But this suggests an interesting thought experiment (regardless of the legality of OMT): suppose an ECB central banker were to overstep her/his legal authority and in doing so created all sorts of cross-border obligations. Would we have to `undo’ this policy? How is this individual to be policed?
In the US, the Fed is accountable to Congress. If ever the Fed overstepped its mandate, in theory, Congress could pass laws, subpoena officials, etc. to reign them in. In the Eurozone, the ECB was created without political overseers. Neither the Commission nor the European Parliament can change the ECB’s mandate; only a treaty change can do that. So if the ECB oversteps its mandate, this is a much more serious issue than if the Fed misbehaves.
If treaty law, the ultimate form of legal pre-commitment in the EU, governing the ECB can simply be cast aside whenever it is time-inconsistent, how should EU nations approach future treaty negotiations? Ignoring the treaty law could be very detrimental for the long-run institutional evolution of the EU. Few economists are willing to publicly entertain this prospect.