Steve Peers

Many citizens across the EU have observed the plight of Greeks limited to €60 withdrawals per day with sympathy and apprehension. This situation stems from the European Central Bank (ECB) restricting emergency funds for Greek banks.

Beyond the human cost, the ECB’s actions raise serious legal, political, and economic concerns. A core function of any central bank is acting as a last-resort lender for banks, a role the ECB is demonstrably failing to fulfill in this case. Furthermore, the ECB’s intervention gives the impression that it is attempting to influence Greece’s internal political discussions regarding austerity and Eurozone membership – a function well outside the Bank’s purview. These banking limitations clearly harm the Greek economy, hindering its ability to repay debts. They are irrelevant to the Bank’s inflation-control mandate and undermine its broader responsibility for supporting EU economic growth. (A more thorough critique is available here (paywalled); legal background here). It’s arguable that these restrictions, or further actions by the ECB, could result in Greece’s de facto exit from the monetary union, a move prohibited under EU law (see my analysis here).

It’s possible to challenge the ECB’s actions through national courts, which can then refer the matter to the Court of Justice of the European Union (CJEU), as exemplified in the recent Gauweiler case (discussed here). Challenges can also be made directly within the EU courts, as demonstrated by the UK’s recent success (discussed here). Case law broadly interprets which ECB actions are contestable, except when the Bank operates as part of the ‘Troika’ negotiating bailout terms. In these instances, neither the ECB nor the European Commission can be challenged in the EU courts. However, the ECB’s restriction of aid to Greek banks fell outside its ‘Troika’ role.

National governments, like Greece, can directly petition the EU courts regarding ECB actions. Other challengers, besides EU institutions, would need to demonstrate standing: ‘direct and individual concern’, or ‘direct concern’ when challenging non-legislative acts lacking implementing measures. It’s plausible that a Greek bank could easily meet these requirements.

In the absence of legal action from either Greek banks or the government, an individual account holder has filed a lawsuit against the ECB’s latest measures in the EU General Court. The claim’s full text is accessible here. Even if the ECB restores assistance following a potential imminent agreement, challenging their actions remains crucial to prevent similar (or threatened) moves in the future.

Admittedly, standing might present an obstacle, though a parallel case could be brought before Greek courts. The plaintiff welcomes any counsel or assistance – contact info@alcimos.com. Comments on this blog post are also welcome.

Barnard & Peers: chapter 19

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