Editing European Central Bank (section)

====Role in the Troika (2010–2015) ====
[[File:Europe bonds sovereign debt crisis.webp|thumb|300px|European 10 year bonds, before the [[Great Recession in Europe]] bonds floated together in parity
{{legend-line|#001489 solid 3px|[[Greece]] 10 year bond}}
{{legend-line|#046A38 solid 3px|[[Portugal]] 10 year bond}}
{{legend-line|#FF8200 solid 3px|[[Republic of Ireland|Ireland]] 10 year bond}}
{{legend-line|#F1BF00 solid 3px|[[Spain]] 10 year bond}}
{{legend-line|#CD212A solid 3px|[[Italy]] 10 year bond}}
{{legend-line|#970E53 solid 3px|[[France]] 10 year bond}}
{{legend-line|#000000 solid 3px|[[Germany]] 10 year bond}}
]]
{{See also|Greek government-debt crisis|Post-2008 Irish banking crisis|European debt crisis}}
The ECB played a controversial role in the "[[European troika|Troika]]" by rejecting most forms of debt restructuring of public and bank debts,<ref>{{Cite news|last=O'Connell|first=Hugh|title=Everything you need to know about the promissory notes, but were afraid to ask|language=en|work=TheJournal.ie|url=http://www.thejournal.ie/anglo-promissory-notes-ecb-775366-Feb2013/|access-date=3 October 2018}}</ref> and pressing governments to adopt bailout programmes and structural reforms through secret letters to Italian, Spanish, Greek and Irish governments. It has further been accused of interfering in the [[Greek referendum 2015|Greek referendum of July 2015]] by constraining liquidity to Greek commercial banks.<ref>{{Cite web|date=2017-03-28|title=Transparency International EU|url=https://transparency.eu/ecb|access-date=2021-04-03|website=Transparency International EU|language=en}}</ref>
{{Expand section|explanations on the role of ECB for Greece, Italy, Spain, Cyprus, Portugal.|date=April 2021}}
In November 2010, reflecting the huge increase in borrowing, including the cover the cost of having guaranteed the liabilities of banks, the cost of borrowing in the private financial markets had become prohibitive for the Irish government. Although it had deferred the cash cost of recapitalising the failing Anglo Irish Bank by nationalising it and issuing it with a "promissory note" (an IOU), the Government also faced a large deficit on its non-banking activities, and it therefore turned to the official sector for a loan to bridge the shortfall until its finances were credibly back on a sustainable footing. Meanwhile, Anglo used the promissory note as collateral for its emergency loan (ELA) from the Central Bank. This enabled Anglo to repay its depositors and bondholders.

It became clear later that the ECB played a key role in making sure the Irish government did not let Anglo default on its debts, to avoid financial instability risks. On 15 October and 6 November 2010, the ECB President [[Jean-Claude Trichet]] sent two secret letters<ref>{{Cite press release|url=https://www.ecb.europa.eu/press/html/irish-letters.en.html|title=Irish letters|website=European Central Bank|language=en|access-date=3 October 2018}}</ref> to the Irish finance Minister which essentially informed the Irish government of the possible suspension of ELA's credit lines, unless the government requested a financial assistance programme to the [[Eurogroup]] under the condition of further reforms and fiscal consolidation.

In addition, the ECB insisted that no debt restructuring (or [[bail-in]]) should be applied to the nationalized banks' bondholders, a measure which could have saved Ireland 8 billion euros.<ref>{{Cite news|url=https://www.irishtimes.com/business/financial-services/chopra-ecb-refusal-to-burn-bondholders-burdened-taxpayers-1.2347861|title=Chopra: ECB refusal to burn bondholders burdened taxpayers|newspaper=The Irish Times|access-date=3 October 2018|language=en-US}}</ref>

During 2012, the ECB pressed for an early end to the ELA, and this situation was resolved with the liquidation of the successor institution IBRC in February 2013. The promissory note was exchanged for much longer term marketable floating rate notes which were disposed of by the Central Bank over the following decade.

In April 2011, the ECB raised interest rates for the first time since 2008 from 1% to 1.25%,<ref>{{Cite news|last1=Blackstone|first1=Brian|year=2011|title=ECB Raises Interest Rates&nbsp;– MarketWatch|work=marketwatch.com|url=http://www.marketwatch.com/story/ecb-raises-interest-rates-2011-04-07|access-date=14 July 2011}}</ref> with a further increase to 1.50% in July 2011.<ref>{{cite web|year=2011|title=ECB: Key interest rates|url=http://www.ecb.int/stats/monetary/rates/html/index.en.html|access-date=29 August 2011}}</ref> However, in 2012–2013 the ECB sharply lowered interest rates to encourage economic growth, reaching the historically low 0.25% in November 2013.<ref name="rates">{{cite web|url=https://www.ecb.europa.eu/stats/policy_and_exchange_rates/key_ecb_interest_rates/html/index.en.html|title=Key ECB interest rates|website=ecb.europa.eu|access-date=3 May 2025}}</ref> Soon after the rates were cut to 0.15%, then on 4 September 2014 the central bank reduced the rates by two-thirds from 0.15% to 0.05%.<ref name="ECBcuts">{{cite news|date=4 September 2014|title=Draghi slashes interest rates, unveils bond-buying plan|publisher=europenews.net|url=http://www.europenews.net/index.php/sid/225407609|access-date=5 September 2014}}</ref> Recently, the interest rates were further reduced reaching 0.00%, the lowest rates on record.<ref name="rates" />

In a report adopted on 13 March 2014, the [[European Parliament]] criticized the "potential conflict of interest between the current role of the ECB in the Troika as 'technical advisor' and its position as a creditor of the four Member States, as well as its mandate under the Treaty". The report was led by Austrian right-wing MEP [[Othmar Karas]] and French Socialist MEP [[Liêm Hoang-Ngoc|Liem Hoang Ngoc]].