Nik de Boer’s new report on sovereign debt in the EU

This new for the European Parliament report examines how the ECB governs sovereign debt in the euro area. The ECB’s approach to sovereign debt is of crucial importance to Europe’s financial stability. Think of Mario Draghi’s “whatever it takes” pledge in 2012 to the launch of the Pandemic Emergency Purchase Programme (PEPP) in 2020. Yet the ECB’s role also raises complicated questions.

The report shows that the ECB’s treatment of sovereign debt involves significant policy choices — about which bonds are eligible, on what terms, and under what conditions. These choices shape borrowing costs, liquidity, and the functioning of sovereign bond markets across the euro area. They are not just technical issues; they have real distributive and political implications. 

One of the central questions the report addresses is the democratic challenge: the ECB’s mandate leaves wide discretion over sovereign debt. This means decisions with major political and fiscal consequences are made inside the central bank. Yet the ECB’s choices lack transparency.

The report offers three main recommendations for the European Parliament:
(1) use its accountability tools to demand greater transparency about the ECB’s sovereign-debt choices;
(2) secure parliamentary presence in key fora where sovereign-debt governance is shaped;
(3) provide clearer political guidance on the ECB’s secondary mandate, especially where monetary policy affects broader economic objectives. 

If you follow debates about the euro, central banking, or the governance of financial stability, we hope this report offers useful insights.

To view the report, click here.