To: MEPs Roberto Gualtieri, Jonás Fernández, Fabio De Masi, Marco ZANNI, Marco VALLI
Re: ECB L/MD/16/504
A note on quantitative easing for the people in Europe (a.k.a. Basic Income): a direct cash transfer to euro area citizens financed by the ECB's liability from Currency in circulation
Answering to the above referenced letter sent by Mario Draghi, You can have a strong accounting point below.
We can enact 'QE for people' by making sense of the liability called BANKNOTES IN CIRCULATION in the ECB balance sheet (currently comprises only banknotes. Should be additionated with electronic euros coming from ordinary QE and other Open Market Operations).
The ECB discharges the profits coming from capital creation with this liability that currently is a liability only in name, as Wilelm Buiter pointed out in his paper SEIGNIORAGE in 2007.
To make the liability whole and effective Mario Draghi has to really disburse the sum to someone (banking reflux).
While the obvious beneficiary should be normally the Treasury concerned, the EU lacking of a central Treasury can authorize the direct payment to each individual citizen . Hence, the payment can go directly to the people.
This accounting remediation is not contrary to official rules but a direct result of our auditing of past ECB balance sheets.
This solution may not be directly available in other monetary system where there is yet a Treasury counterpart.
President at IASSEM
- Consolidated balance sheet of the Eurosystem as at 31 December 2015
- W.H. Buiter, SEIGNIORAGE (2007)