Exclusive: ECB union says staff losing faith in leadership over inflation, pay


  • 40% of ECB staff have little or no trust
  • Two-thirds say trust has been damaged
  • 63% are concerned about the ECB’s ability to maintain its purchasing power

FRANKFURT, Jan 18 (Reuters) – (This Jan 17 story has been corrected to restore deleted words in paragraph 11)

Staff at the European Central Bank are losing confidence in the institution’s leadership after the ECB’s failure to control inflation and a pay bonus that outpaced a price jump, according to a survey by trade union IPSO.

The responses highlight that even central banks, whose main responsibility is to fight inflation, are not immune to workers’ dissatisfaction with the sharply rising cost of living.

The inquiry was organized in the context of a dispute between IPSO, which holds six of the nine seats on the ECB’s working committee, and the central bank’s board over payment and telecommuting rules.

An ECB spokesman did not directly comment on IPSO’s findings when asked, but pointed to a separate staff survey carried out by the ECB itself last year that found 83% of around 3,000 respondents were proud to work for the ECB and 72% would recommend it .

The results of the IPSO survey, which focused mainly on pay and telecommuting arrangements but also included questions about confidence in the board, were sent to ECB staff in an email seen by Reuters on Tuesday.

Two-thirds of the nearly 1,600 respondents said Lagarde and the rest of the six-member ECB board were hurt by recent developments, such as high inflation and wage increases that have not kept pace with price increases.

Less than half of the respondents answered “medium” (34.3%) or “high” when asked how much confidence they have in Lagarde and the board to lead and manage the ECB, the central bank of the 20 countries that use the euro. (14.6%).

However, more than 40% of respondents said they had “low” (28.6%) or “no” (12%) confidence, while 10.5% could not say.

“This is a serious concern for our institution because no one can properly lead an organization without the trust of the workforce,” the union said in an email.

INFLATION SURGE, PAY FIGHTS

The survey was the first by IPSO to ask about trust in top management since Christine Lagarde took over as ECB president at the end of 2019.

A similar IPSO poll of ECB staff before his predecessor Mario Draghi resigned showed that 54.5% of 735 respondents rated his presidency as “very good” or “outstanding” and rated his policy measures even higher.

However, inflation in the euro zone was at a ten-year low. Its rise to the highest level in decades has seen a resurgence in wage battles between workers and the companies and institutions that employ them.

In an October 2019 survey, the majority of respondents also complained about the lack of transparency in recruitment and perceived favoritism under Draghi’s leadership.

The Bank of England’s most recent survey, also in 2019, found that 64% of respondents had “trust and confidence in the Bank’s management”.

A 2022 survey of employees in US government departments and federal agencies found that 61% of respondents had a “high degree of respect” for their organizations’ top leaders — roughly flat from the previous two years.

An ECB spokesperson also pointed to internal surveys conducted in 2020-21 that found that around 80% of respondents were satisfied with the health and safety measures taken by the ECB in response to the coronavirus pandemic.

A recent IPSO survey found that 63% of responding workers were concerned about the ECB’s ability to maintain purchasing power after being given a pay rise of just 4% last year – or around half the rise in consumer prices.

The ECB has been criticized by politicians, bankers and academics for initially underestimating the rise in the cost of living and then compensating for it with large and painful increases in borrowing costs.

Lagarde, who is not an economist and was not a central banker before joining the ECB, colorfully defended the board at an event with her staff last month.

“If it wasn’t for them, I’d be a sad, lonely cowgirl lost somewhere in the Pampas of monetary policy,” Lagarde said, according to a tape of a town hall seen by Reuters on December 19.

He and other members of the board have long worried about the risk of a potential “wage-price spiral” in which higher wages feed into prices, which they argue would make it harder for the ECB to return inflation to its 2% target.

But IPSO said the concern was misplaced and that workers should not have to bear the brunt of the current battle on inflation.

“The ECB may promote lower real wages, but this is not our position as your trade union,” he wrote in a message to ECB staff.

Edited by Catherine Evans

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