Incompetence: Why Governments Should Be Empowered As Little As Possible

There was another factor, almost as laughable in hindsight. A view had gained ground that central banking was above politics. The goal of monetary policy was simple -- price stability -- and the means purely technocratic. The old Keynesian idea that governments could trade a bit of inflation for a spurt of faster growth stood discredited. If choices like that ever arose, central banking would be political; but such choices don’t arise, so monetary policy should be held above the fray.

That’s why leaders weren’t too worried that Europe’s democratic underpinnings, including its arrangements for fiscal policy, were so much weaker than those of a typical currency- issuing nation-state. Actually, they thought, this was a good thing. The EU’s governance deficit would make the ECB all the more independent. Left alone, it could do its job better and without controversy.
Nice theory.
This crisis has proved that central banking is a branch of politics. Under some extreme circumstances, such as the ones we’re in, monetary policy is really just fiscal policy by other means -- as when a central bank engages in “quantitative easing” and takes government debt onto its books. Strictly speaking, again to underline its independence, the ECB was forbidden to do that, but out of necessity it has lately found ways around the prohibition. Many economists are now calling for more QE.
http://www.bloomberg.com/news/2012-05-23/the-seeds-of-the-eu-s-crisis-were-sown-60-years-ago.html