Lagarde urges ECB politicians to restrain criticism and leaks


European Central Bank President Christine Lagarde urged policymakers to hold off on dissenting views on decisions for several days, a move critics say is hampering their ability to present an honest view of the debate, sources said.

agarde pledged to build consensus when she took over the top post at the ECB in late 2019, following a mixed end to Mario Draghi’s presidency.

But she has grappled with vocal dissent from political hawks – who find the bank’s stance too easy at a time of record high inflation in the eurozone – and ongoing leaks about the pros and cons of the internal debate.

Lagarde has now urged policymakers to present the majority opinion to the public following the ECB’s policy decisions, which will be released on Thursday, and to withhold “personal” views until Monday after, four sources with direct knowledge of the discussion said.

The guidelines, which are not up for a formal vote in the ECB’s rate-setting Governing Council, also instruct policymakers not to release details of the internal discussion to the press, the sources told Reuters.

An ECB spokesman declined to comment.

The new guidelines are informal and merely express Lagarde’s expectations, meaning politicians will not face reprisals if they deviate from them.

But they seem to leave marks.

The ECB said last Thursday it would end its bond-buying program in the third quarter and hike rates some time thereafter.

Hawkish governors like Germany’s Joachim Nagel and Belgium’s Pierre Wunsch waited until this week to call for a faster pace of tightening, as did Dutchman Klaas Knot after the February meeting.

Politicians from the bloc’s richer northern countries have often spoken out against the ECB’s ultra-loose monetary policy in recent years, but with the end of stimulus programs now in sight, countries in the poorer south find themselves in the minority.

Critics say the new guidelines effectively diminish the voice of dissenters because they are asked not to speak until the news cycle continues, so they will struggle to reach their target audiences.

They also say the guidelines are self-defeating because they give policymakers an incentive to share their views with journalists while declining to be named.

“Do you want leaks? Because that’s how you get them,” said one of the sources, who asked not to be named. “If people can’t speak openly, they talk anyway, but through other channels.”

The move also surprised many as the ECB had developed a new communications strategy just last year after an 18-month review and such restrictions were not discussed at the time.

Supporters of Lagarde’s motion say criticism leveled shortly after the sessions weakens the decision and casts doubt, so a few extra days simply allow the public to understand and accept the outcome.

“Once we’ve made a decision, we should stand by it, even if some of us disagreed,” another source said. “The problem is that it’s easy to say but almost impossible to do.”

Draghi had angered political hawks by the end of his presidency in 2019 by insisting on an ultra-lightweight policy of negative interest rates and massive bond purchases.

But Lagarde had taken a different route, even taking her colleagues to team-building retreats outside of Frankfurt and submitting the ECB’s strategy for review.

At the US Federal Reserve, only the chairman is allowed to speak publicly for a day and a half after decisions are made, allowing markets to process the information. However, critics are not called upon to defend or represent a majority opinion. Lagarde urges ECB politicians to restrain criticism and leaks

Fry Electronics Team

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