Sunday, 19 May 2024
BusinessECB workers suspend Lagarde: her presidency is "poor" or "very poor" and...

ECB workers suspend Lagarde: her presidency is “poor” or “very poor” and she behaves like “an autocrat”

Workers at the European Central Bank (ECB) suspend Christine Lagarde, according to the survey by the institution’s majority union, IPSO, carried out halfway through her 8-year mandate. 50.6% of employees believe that her presidency is “poor” or “very poor,” according to this survey to which elDiario.es has had access.

The union carried out the survey with 1,159 of the 5,089 workers in total at the ECB (including interns, according to the count of the institution that decides the monetary policy of the eurozone). The results show discontent with Lagarde because he is not “competent” and because “most of the time is not dedicated to his work, but rather to talking about politics and other topics,” according to union sources.

Furthermore, internally, “Lagarde behaves like an autocrat, of the do-as-I-say-not-as-I-do type,” and the staff is “very dissatisfied with her management: 73% of employees do not approve,” you can read. in the survey.

“But the workers were also not happy with the way Draghi and Trichet (the previous presidents of the institution) managed the ECB internally. Even so, they achieved a good overall rating because they prioritized how they carried out their work as central bankers,” they point out in IPSO.

With Lagarde it is different. The survey shows that the Frenchwoman does not have the prestige of her predecessors, “nor enough technical profile,” according to the survey.

“The ECB is an institution based on experts and the staff highly values ​​competence and experience: this is a key element of our professional legitimacy,” explain sources from the institution itself.

Lagarde’s suspense extends to the entire Executive Committee, which is completed by vice president Luis de Guindos, the chief economist and other members, such as the German Isabel Schnabel. The confidence of 59% of the staff in the main body of the ECB is “low or non-existent”. Although there is no specific question about Luis De Guindos, “he doesn’t have much reputation either,” a source familiar with the preparation of the survey confesses to elDiario.es.

Official ECB sources consider that “the survey is defective.” As they argue, “it includes issues for which the Executive Committee or the Governing Council is responsible.” [incorpora a los gobernadores de los bancos centrales de cada país del euro ]and not only to President Lagarde.”

Furthermore, they criticize that “it seems that [la encuesta] could be completed several times by the same person.” The president and the Executive Committee “are fully focused on their mandate and have implemented policies to respond to unprecedented events in recent years, such as the pandemic and wars,” defends an ECB spokesperson, in statements to elDiario.es.

Finally, remember that the institution carries out its own surveys, “in accordance with professional standards, and will continue to do so,” which manage to gather “around 3,000 responses, compared to IPSO’s nearly 1,000.” The last one, carried out in 2023, “shows that 80% of employees are proud to work at the ECB, 81% feel personally connected and 89% believe in the mission and purpose of the institution”, concludes the spokesperson. .

The pandemic mistake

Recently, a senior eurozone central banking official admitted that “Lagarde has been somewhat constrained since she had that setback, almost at the beginning of her mandate.” [y en plena pandemia, en abril de 2020]when he said: ”We are not here to close the spreads [“No estamos aquí para contener las primas de riesgo”, en inglés]”, and made a tremendous mess in the markets.”

“So, since there are actually debates within the Governing Council, she has to be very cautious and I think that in the end she sticks to a message and does not deviate from it, because she has already had some bad experiences,” she stressed. same source, which prefers not to be cited.

Lower interest rates?

“The ECB is likely to cut interest rates in the summer,” Christine Lagarde told Bloomberg last Wednesday at the World Economic Forum, which was held in Davos (Switzerland).

Lagarde poured cold water on expectations of a first interest rate cut in spring or even March. According to these statements, the ECB will remain firm in its efforts to choke the economy to fight inflation, after the most aggressive cycle of increases in the history of the euro, from 0% in July 2022 to the current 4.5%, a maximum since 2008 at which it has maintained them since autumn.

The institution that decides the monetary policy of the eurozone will not tremble despite the fact that this Monday it was confirmed that Germany’s economy contracted by 0.3% in 2023 since the risk of recession extends to the entire eurozone , with the notable exception of Spain.

The next meeting to decide on interest rates of the Governing Council will be held next Thursday, January 25, and on the table will be a clear moderation of inflation at the end of 2023, an increasingly more expensive loan and mortgages that threaten economic activity and the expectation that the Federal Reserve (the central bank of the United States) will lower interest rates well before the summer.

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