The Effect of Monetary Policy Within the National Economy and Monetary Sovereignty

By departing from the purpose of money in safeguarding the integrity of national social values, the following discussion focuses on monetary policy effects, monetary integrations and monetary sovereignty. To this end we also reflect on issues of political and economic sovereignty on one hand, as well as money legitimacy and its effects on social movements, on the other hand. Furthermore, the issue of central bank autonomy and independence, as well as of the relationship between democracy and monetary sovereignty are examined from various aspects. This relationship is particularly relevant to the ongoing debate between scholars and politicians about central bank independence and the formulation of monetary policy between “rules” and “discretion”. The reforms of central bank legislation we have witnessed over the last years in the EU are not crucial to guaranteeing central bank autonomy in governing social movements, at least from the substantive aspect. Considering that money is not only an economic but also a wider social phenomenon, the role of society’s central monetary authority cannot be appraised exclusively from the economic aspect. Therefore, any discussion on central bank autonomy and independence – salient to issues such as the effect of monetary policy and monetary sovereignty, unfolds numerous questions, especially in relation to political sovereignty. History offers many examples of various monetary arrangements in which money was used to govern peoples’ fate. In this sense, financial crises fully expose to the public – almost as a warning, the meaning of monetary sovereignty and the importance of safeguarding this fundamental pillar of national sovereignty. The discussion concludes by suggesting that only comprehensive knowledge as well as proficiency in respect of money can pave a solid path to national prosperity in the context of current global monetary tendencies.