The European Central Bank in (the) crisis

Since the eruption of the sovereign debt crisis in the euro area in May 2010, the ECB (or for that matter
Eurosystem) has been in the spotlight of crisis management and resolution. Less attention has been
paid to the impact of the crisis on the ECB itself. It is often argued or assumed that the sovereign debt crisis is the result of flaws in the framework of the euro.
This article takes another perspective. We begin by analysing the nature of the sovereign debt crisis, then discuss how the crisis has affected the functioning of the ECB and the euro, and how the ECB was forced to respond and evaluate the choices it made in formulating a response. Finally, we focus on the future and the challenges that lie ahead.