- 40% of ECB staff have little or no trust
- Two-thirds say trust is damaged
- 63% worry about the ECB’s ability to protect purchasing power
FRANKFURT, Jan 18 (Portal) – (This Jan 17 story has been corrected to restore the omitted words in paragraph 11)
European Central Bank staff are losing confidence in the institution’s leadership after the ECB failed to bring inflation under control and paid wages that fell short of the price jump, according to a survey by the IPSO union.
The responses underscore that even central banks, whose primary job is to fight inflation, are not immune to staff dissatisfaction with the soaring cost of living.
The poll was organized in the context of a dispute between IPSO, which holds six out of nine seats on the ECB’s staff committee, and the central bank’s governing board over pay and teleworking agreements.
An ECB spokesman did not comment directly on IPSO’s findings when asked, but referred to a separate staff survey conducted by the ECB itself last year, which shows that 83% of the nearly 3,000 respondents are proud to have worked for the ECB and 72% would recommend them.
The results of the IPSO survey, which focused mainly on pay and remote work arrangements but also included questions on trust in the board, were sent to ECB staff in an email to Portal on Tuesday.
They showed that two-thirds of around 1,600 respondents said their trust in Lagarde and the rest of the ECB’s six-member board had been damaged by recent developments, such as high inflation and a salary increase that did not match the rise in prices.
When asked how much trust they have in Lagarde and the board to run and manage the ECB, the central bank of the 20 countries that use the euro, just under half of respondents answered “moderately”. (34.3%) or “high”. (14.6%).
But over 40% of respondents said they trust “little” (28.6%) or “no” (12%), while 10.5% could not say so.
“This is a serious issue for our institution as no one can properly run an organization without the trust of its workforce,” the union said in its email.
INFLATION FLUCTUATION, WAGE WARS
The survey was IPSO’s first to ask about trust in top management since Christine Lagarde took over as ECB President in late 2019.
A similar IPSO survey of ECB staff, conducted shortly before the resignation of its predecessor Mario Draghi, found that 54.5% of 735 respondents rated his presidency as ‘very good’ or ‘outstanding’, with support for his political measures was even higher.
But then inflation in the eurozone had been low for a decade. The recent surge to multi-decade highs in countries around the world has sparked a resurgence in wage wars between workers and the companies and institutions that employ them.
And a majority of respondents in the October 2019 survey also complained about a lack of transparency in recruitment and perceived favoritism under Draghi.
The Bank of England’s most recent employee survey, also conducted in 2019, found that 64% of respondents had “trust and confidence in the management of the bank”.
A 2022 U.S. government survey of department and federal agency employees found that 61% of respondents had “a high level of respect” for their organization’s leaders — roughly stable compared to the previous two years.
The ECB spokesman also pointed to internal surveys in 2020-21, where around 80% of respondents were satisfied with the health and safety measures taken by the ECB in response to the coronavirus pandemic.
The latest IPSO survey found that 63% of responding staff are concerned about the ECB’s ability to protect their spending power after receiving a pay rise of just 4% last year – or about half the rise in consumer prices.
The ECB has been criticized by politicians, bankers and academics for first underestimating increases in the cost of living and then making up for them with large and painful hikes in the cost of borrowing.
Lagarde, who is not an economist and was not a central banker before joining the ECB, colorfully defended her board at an event with staffers last month.
“Without her, I would be a sad, lonely cowgirl, lost somewhere in the middle of nowhere in monetary policy,” Lagarde said, according to a Dec. 19 city hall tap seen by Portal.
She and other board members have long worried about the risk of a possible “wage-price spiral,” with higher wages feeding into prices, which she says would make it harder for the ECB to get inflation back on target 2% lower.
But IPSO said the concern was misplaced and workers should not bear the brunt of the current inflationary spurt.
“The ECB may preach lower real wages, but that is not our stance as your staff union,” she wrote in her message to ECB staff.
Editing by Catherine Evans
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