The ECB and Eurozone Monetary Politics: Policy Consensus in EMU Revisited

We look at the politics of central banking in the eurozone from an uncommon perspective. Much of the literature that influenced the design of EMU assumed that there was a risk of inflation-biased governments seeking an undesirable interference of monetary and fiscal policy in the eurozone, which some refer to pejoratively as "monetary politics" (Stark 2012). In contrast, we shed light on the reverse matter, namely the ECB as monetary policy-maker trying to exert influence on fiscal policy developments. Employing quantitative text analysis methods, namely probabilistic topic modelling, we examine a dataset of 218 introductory statements to ECB press conferences, presentations of the annual report to the European Parliament and monetary dialogue meetings from 11/2003 to 02/2016. We find that the ECB is increasingly invested in fiscal policy concerns, in particular since the height of the eurozone crisis, and thus call into question the old underpinnings of EMU's monetary-fiscal policy consensus.