Stephan Ewald: What Hypocrites Are Working at the ECB?

Yves here. While hypocrisy is hardly uncommon in official circles, it is supposed to be kept well out of public view.

By Stephan Ewald, who works in the financial sector and lives in Cologne, Germany. He contributes to the blog and you can follow him on Twitter at @StephanEwald

On its website the European Central Bank proclaims the mission of the Eurosystem (emphasis mine):

The Eurosystem, which comprises the European Central Bank and the national central banks of the Member States whose currency is the euro, is the monetary authority of the euro area. We in the Eurosystem have as our primary objective the maintenance of price stability for the common good. Acting also as a leading financial authority, we aim to safeguard financial stability and promote European financial integration.

Since the start of the Eurosystem our brave inflation warriors at the ECB regularly praise themselves what a heck of the job they are doing about their primary objective the maintenance of price stability. But yesterday the German Daily Frankfurter Allgemeine Zeitung (FAZ) published an article (German), that our guardians of price stability fight another good fight. The employees of the ECB want their own pensions to be inflation protected.

So the same folks who lecture member states of the Eurozone about the danger of private sector labor and pension contracts being inflation-indexed because of moral hazard want their own pension contracts inflation-indexed. For this fight to be successful ECB employees deploy a very evil institution: the central banker union IPSO. According to the FAZ article a former employee sued the ECB with the help of IPSO at European Court of Justice.

Which begs the question: what hypocritical morons are working at the European Central Bank?

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  1. Hugh

    Do not do as I do. Do as I say do. Consistency is for the rubes. If elites weren’t treated differently than other people, they would be other people, and, for them, that would be a state of affairs too dreadful to consider.

  2. Good Question

    “Which begs the question: what hypocritical morons are working at the European Central Bank?”

    It’s the new Italian guy.

    Just saw a chart that graphed CB Balance sheet size to country GDP ratios (Eurozone in the case of the ECB) for the Eurozone, the US, Japan and England. Don’t know why they left out China.

    Since Trichet left, the ECB zoomed from lowest to equaling Japan. Then came England, and the Fed is now in last place with “only” a $3 trillion mark.

    Makes you wonder what they know that we don’t?

    Like they can’t ever shrink down again and raise interest rates without blowing up the financial system, perhaps?

    1. Jim Haygood

      ‘Like they can’t ever shrink down again and raise interest rates without blowing up the financial system, perhaps?’

      My sentiments precisely, Professor GQ.

      Since the tumor-like explosion of central bank balance sheets is de facto irreversible, anybody with a lick of sense is scouring the countryside for inflation hedges.

      Even the village idiot, Kurgman, is singing silly jingles about amping up inflation.

      Once that looming haystack of inflationary kindling catches flame, won’t be no fire department on earth that can put it out.


  3. Bakasone

    Protection from inflation would be one of the minor percs ECB staff feels entitled to. Do ECB officials pay taxes? Do they have to contribute to their pension schemes? How about free health insurance? And hey, ECB apparatchiks who managed to reproduce don’t have to worry where to put their offspring while they’re dozing in the office. The tax payers of Europe take care of it all.

  4. Anonymous Jones

    Human beings are hypocrites?!?!?!?!

    And agents of government are human beings?!?!?!?!?!

    And I’m a human being?!?!?!?!?!?!?!

    And all my ancestors for that past tens of thousands of years were also human beings?!?!?!?!?!?!?!?!?!

    Say it isn’t so!!!!!!!!!!!!!!!!!!!!!!!!!!!

    I am shocked, shocked to discover that hypocrisy is going on in here!

    [And this time, I really am quoting Captain Renault!!!]

  5. Hans Huett


    We should be happy about the ECB employees´ hypocrisy as sort of an early indicator: Their greed predicts rising inflation. Consider them as guinea pigs. Eine Versuchsanordnung :-D

    1. Bam_Man

      It’s words like “Versuchsanordnung” that make most Americans afraid to learn German! ;)

  6. IF

    Listening to Krugman the grand plan is to raise the price level in Germany to support club med. Actually he even wants inflation in club med, which means prices in Germany (where the ECB is located) would really have to go up a lot. Now German inflation indexing (at least as in Bunds) averages over the whole EU, which means the ECB workers are probably modest (as the EU average will not cover their local cost of living).

    1. j.grmwd

      Achieving inflation in Germany has to involve paying Germans more. What’s not to like about that, if you’re a German?

  7. Jim

    What happens to their pension when the Eurozone is dissolved? And if they’re isn’t a provision for this outcome, and the EZ is indeed dissolved, can the pensions be declared null and void?

    1. Procopius

      I remember reading in a history of World War II, during the preparations for the Allied landings in North Africa, the French government officials of the Vichy government were very difficult to deal with. They were asking for all sorts of guarantees and political concessions. The author (I’ve forgotten, was it Churchill? His six volume history was great, although maybe not completely accurate) explained that because of the repeated revolutions in France government officials were accustomed to certain institutions which guaranteed their pension rights, no matter how the government changed, and they wanted to be sure that when De Gaulle took over from Petain he would honor that tradition. I don’t know whether other countries have similar traditions. Germany had pretty stable governments up until the end World War I and the Hohenzollern dynasty. Holland and Belgium not so much, but I know too little of the details.

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