European Central Bank President Christine Lagarde speaks during the 54th annual meeting of the World Economic Forum, in Davos, Switzerland, on Jan. 19.DENIS BALIBOUSE/Reuters
The trade union representing European Central Bank staff says a majority of employees think Christine Lagarde is not the right person to lead the institution, according to a survey it conducted.
The survey by the International and European Public Services Organisation (IPSO) showed staff trust in the ECB’s entire senior management team was lower than a year ago, with nearly 60 per cent expressing a negative view.
Run to coincide with the middle of Lagarde’s eight-year term as president and released on Monday, the union’s survey showed ECB employees were mostly concerned with matters such as pay and working conditions.
However, IPSO said around half of those who responded expressed some doubts about Lagarde’s track record on fighting inflation, the ECB’s primary objective.
Lagarde and other ECB policy-makers have had to grapple with a sharp surge in prices fuelled in part by the war in Ukraine and its impact on energy prices – a spike also unforeseen by many other central banks and economists.
An ECB spokesperson said the survey was flawed, and included topics “for which the Executive Board or Governing Council rather than solely the President is responsible and that are not within IPSO’s remit.”
The ECB said its president and board “were fully focused on their mandate and have implemented policies to respond to unprecedented events in recent years such as the pandemic and wars.”
Organizational gripes were a constant of IPSO surveys under Lagarde’s two immediate predecessors Mario Draghi and Jean-Claude Trichet, but the pair received positive assessments by staff of their performance as central bankers.
IPSO said nearly 64 per cent of the survey’s roughly 1,100 respondents thought Lagarde had not improved the ECB’s reputation, without specifying further.
In farewell surveys run about Draghi and Trichet, more than 70 per cent thought they had improved the bank’s reputation despite objections about other issues. IPSO did not conduct midterm surveys of the pair.
Of the three ECB presidents, only Lagarde has had to deal with a period of sustained global inflation, which has hurt the living standards of workers, including those at the ECB.
The ECB employs more than 3,500 people who have elected IPSO representatives to six out of nine seats on the bank’s staff committee.
Some 53.5 per cent of survey respondents thought Lagarde, a former head of the International Monetary Fund, was not the right president for the ECB at this juncture, while 22.8 per cent said she was and 23.8 per cent could not say. This marked the first time staff had reached such a conclusion about the central bank’s leader, according to IPSO.
With no central banking experience, unlike her predecessors, Lagarde’s appointment as ECB chief in 2019 was questioned at the time by some analysts and politicians.
Trust in the ECB’s Executive Board, which also includes vice-president Luis de Guindos and four other members, was rated as non-existent or low by 59 per cent of the respondents – up from 40 per cent in a survey run a year earlier.
The ECB said it seemed the IPSO survey “could be filled in multiple times by the same person,” a criticism it had also made of the previous union polls. It pointed out its own surveys draw in about 3,000 responses.
In one of these ECB surveys, conducted in 2022, 83 per cent of nearly 3,000 respondents said they were proud to work for the ECB and 72 per cent would recommend it.
IPSO said it “did not detect any suspicious activity” in its survey and at least 91.5 per cent of the responses were made from within the ECB based on their internet protocol (IP) address. It was confident the results conveyed a fair picture of staff views.
A 2023 U.S. government survey of employees at departments and federal agencies found that 63 per cent of respondents had “a high level of respect” for their organization’s senior leaders – an increase over the previous four years.
More survey respondents approved of the ECB’s policy decisions under Lagarde than disapproved of them but support was modest at 38.4 per cent, compared to Draghi’s almost two-thirds backing.
Still, only 26.5 per cent thought the ECB should now take a different course, compared to 38.9 per cent for Draghi when he was criticized late in his term for keeping policy too loose.
Under Lagarde, the ECB came under fire from some investors and economists for tightening policy too late but it has since raised rates to record highs.
Other major central bank chiefs have also been criticized for how they have dealt with the biggest inflation surge in decades, including U.S. Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey.
In nearly 400 anonymous comments ECB staff fleshed out their ratings, mostly focusing on internal matters such as salary increases, hot-desking, diversity policies and Lagarde’s attitude towards staff.
Other staff comments on Lagarde were positive, with some noting she had learned on the job and one even describing her as a “stellar leader.”
Lagarde’s fellow policy-makers have also praised her for seeking consensus despite an ongoing issue with leaks, which saw her seize her colleagues’ mobile phones before a decision.