"The problem is that the ECB has shown, again and again, that it is
temperamentally and institutionally timid. These more radical proposals
would divide its policy-making board and court political controversy, to
put it mildly. They may also be illegal: The single-currency treaty
forbids "monetary financing" of governments, and last week's guidance
from the EU Court of Justice's advocate general was that sovereign debt
purchases were sometimes permissible
but subject to conditions. The guidance seemed to rule out coordinated
monetary and fiscal expansion (through primary-market bond purchases);
it voiced reservations about the bank's retaining bonds to maturity
(imposing a limit on the duration of QE).
Legal or not, helicopter money would be a frontal repudiation of the
monetary conservatism that Germany's government and others have sought
to impose on the bank. The same goes for anything that looked like
raising the ECB's inflation target."