Faced with the rise of anti-euro candidates for state offices throughout the E.U., Mario Draghi, the president of the E.U.’s central bank deemed it politically prudent to depart from the light world of cool economic data to mount a spirited defense of the euro and even free trade in March, 2017. With the UK having voted to secede from the Union, he could not assume that the state of the Union would continue to be inherently viable. Indeed, some political candidates at the state level were “questioning the whole idea of a united Europe and the European Central Bank’s fundamental reason for being.” Were such questioning to reach the mainstream across the E.U., the ECB would face an existential crisis. The E.U. itself may have been in such a crisis since the British voted to secede—much like the U.S. faced an existential crisis during the Lincoln administration. Fortunately for the E.U., only one state had voted to secede, so I think the existential crisis facing the E.U. had been overblown since the British referendum. Nevertheless, the political climate in the E.U. was such that Draghi felt the need to take heed of political criticism.
The political dimension of the central bank’s role is clearest in the bank’s stimulus program wherein it put money into the E.U. economy by buying corporate and state-government bonds. After the financial crisis of 2008, this program made a lot of sense. Almost a decade later, the pressing nature of the program had become more difficult to argue—the bank’s central task being to keep inflation under control. “It is time for the European Central Bank to start phasing out its expansionary monetary policy,” said Clemens Fuest of the Ifo Institute in Munich. Yet in adopting such a policy, the ECB would invite the ire of anti-federalist/states’ rights politicians in the state of Italy, where unemployment in March, 2017 stood at 11.9 percent—three times as high as the rate in the state of Germany. So Draghi made the point that “extraordinary shows of solidarity” had been demonstrated within the E.U. by means of the common currency.
It is important to take into account the imbalance of power between the states and the federal government. Whereas the federal institutions had taken most of the governmental sovereignty from the states in the U.S., the states in the E.U. had retained a substantial portion, hence leaving federal institutions, including the ECB, vulnerable even existentially. Put another way, the anti-federalist candidates for state offices throughout the E.U. would not have been such a threat to the ECB had more fiscal authority been transferred to the federal level. Generally speaking, state governments cannot be relied on to protect even the existing competencies (i.e., authority) of the federal level because the interests different. Simply put, the good of particular parts is not the same as the common good. That Draghi felt the need to defend his institution’s tasks simply because some state-level candidates could whip the federal level with electoral impunity (and even gain as a result!) is itself an indication that the states still held too much governmental sovereignty. This is the existential threat to the E.U. itself—that even the head of the central bank—an institution that should be insulated from political pressures—felt pressure to speak in defense of the euro and one of the bank’s programs simply because of political movements going on in some of the states.
 Jack Ewing, “As E.C.B. Charts Economic Course, Politics Complicate the Picture,” The New York Times, March 9, 2017.