Germany V Draghi

ECB Attacks at Fever Pitch

Don't tell me what to do. Wolfgang Schäuble (l) and Mario Draghi.
  • Why it matters

    Why it matters

    Critics blame ECB chief Mario Draghi’s loose monetary policies for sabotaging economic growth in the 19-nation euro zone and sparking the rise of the far-right Alternative for Germany party. ECB backers say critics should look in the mirror.

  • Facts


    • German Finance Minister Wolfgang Schäuble on Friday blasted the ECB’s monetary policies and even blamed Mr. Draghi for strengthening populist party AfD.
    • German economists and Social Democrats fired back, calling the conservative criticism of the euro-zone’s central bank maligned and out of control.
    • Mr. Schäuble and Mr. Draghi come face to face on Thursday, when both attend International Monetary Fund meetings in Washington.
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Mario Draghi has never had a cozy relationship with the German public. Hailed for a time as a hero by financial markets, Germany has been ever critical of the European Central Bank boss – but never as much as right now.

His transgressions, according to critics, range from sabotaging economic growth in the 19-nation euro zone with overly loose monetary policies to harming savers, pensioners, insurers and banks across Germany by reducing interest rates to record lows.

In the one corner is Germany’s finance minister, Wolfgang Schäuble, a long-time standard bearer of the conservative wing of the center-right Christian Democratic Union and Chancellor Angela Merkel’s chief rival within the party over the past decade.

It is not often that Mr. Schäuble wades into monetary policy. Central banks are meant to be independent after all, free to make the tough choices to safeguard the economy without political interference.

But in a scathing attack on Friday at an event near Frankfurt, Mr. Schäuble apparently could no longer hold his tongue. He blasted the ECB’s monetary policies and even blamed Mr. Draghi for sparking the rise of far-right political party Alternative for Germany.

The tirade, which was followed by other conservative politicians over the weekend, seemed to mark a new low for Germany’s policymakers in their relations with the Frankfurt-based ECB, and even sparked some German policymakers to rally to Mr. Draghi’s cause.

“The tone and the direct attack on the ECB by a senior, or better by one of the two most prominent members of the German government, is unprecedented,” Carsten Brzeski, the Frankfurt-based chief economist of the Dutch-German bank ING-Diba, said Tuesday.

The ECB president does have his backers after all, even in jaded Germany, where criticism of the central banker has reached a deafening crescendo.

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