Daily Times

FRANKFURT: German economic adviser Isabel Schnabel has said that the European Central Bank (ECB) has become too powerful, but largely because politicians have foisted an increasingly political role onto it.

“The ECB has gained enormous power, even though it is not answerable to any parliamentary control. I take a critical view of this,” The adviser told the Frankfurter Allgemeine Sonntagszeitung newspaper. After being asked whether the ECB had become too powerful, she replied: “I think so.”

It “has also come more political. But that’s because politicians have frequently failed to act and thereby forced the ECB to do so,” she said. “The central bank has become a quasi-political institution. It’s important that we move away from this,” she continued.

Schnabel is a member of the German government’s panel of economic experts that used to be known as the ‘Five Wise Men’ until women joined it. She was appointed to the panel in June 2014, defended the ECB against the criticism for its policy of ultra-low interest rates. “Low interest rates are primarily an after-effect of the financial crisis,” she said.