Benoît Coeuré: Interview in Süddeutsche Zeitung
Interview with Mr Benoît Coeuré, Member of the Executive Board of the European Central
Bank, in Süddeutsche Zeitung, conducted by Mr Markus Zydra on 22 September 2016, and
published on 26 September 2016.
* * *
Mr Coeuré, Mario Draghi, President of the European Central Bank (ECB), will meet
members of the Bundestag next week. Does this mean the ECB still has a problem
with Germany?
No, not at all. We are legally accountable to the European Parliament but we are always
willing to exchange views informally with national parliaments. It is a very useful exercise for
us. The President had the first such exchange four years ago in the midst of the financial
crisis in Europe. Now we have made headway, growth has returned and the overall
economic situation has improved a lot, partially thanks to our decisions. This makes it a good
time to explain what we have been doing, to show the results of our actions and to respond
to any concerns that might be voiced.
The ECB has been accused by some German politicians of fuelling populist parties
like the Alternative für Deutschland (AfD). How would you react to such remarks?
The ECB is not a political institution. Our mandate is to maintain price stability. Political
issues must be handled by politicians and monetary issues by central bankers. We should
not mix these two things.
For many politicians the ECB is seen as the bogeyman...
There is a temptation everywhere, also outside Europe, to drag central banks into political
discussions. Some expect too much of us and want solutions to high unemployment or
longterm growth problems, while others blame us for the political outcome. Politics and monetary
policy don't belong together.
The ECB continues to give advice to governments. Is that legitimate?
In Europe, there is a long tradition of central banks giving economic policy advice. The
Deutsche Bundesbank has always done this and so have other European central banks. The
ECB gives advice, only insofar as it relates to monetary policy. Price stability relies on
economic and social stability. We have a duty to speak our mind and tell citizens what we
see as being the right conditions for us to fulfil our mandate properly. However, there is a line
that should not be crossed and it is certainly not our role to tell national governments
precisely what they should do.
The ECB has asked Germany to use its "fiscal space" and spend more public money...
What matters to us is the stability of the euro area economy. A growth model that relies
excessively on external demand poses risks because it puts the fate of recovery in the hands
of American or Chinese consumers. We need strong consumption and investment in the
euro area. The good news is that this is starting to happen. Internal demand is picking up in
the euro area as a whole, also in Germany.
So Germany should export less and import more?
Strong exports are a sign of competitiveness. They are an asset for Germany and therefore
for Europe. Nevertheless, increased investment in Germany would make the economy even
stronger and prepare it for the future. In France and Italy, preparing for the future means
giving priority to reforming labour markets and reducing debt. In Germany, debt has already
been greatly reduced which makes it possible to increase investment for the future. This
would also help to foster long-term growth and address demographic challenges.
You are said to be politically to the left. What does that mean to you?
We all come from different backgrounds in the Governing Council and it does not influence at
all how we conduct monetary policy. I personally believe that we need strong social systems
to protect the poorest people in our societies, which also implies that these systems should
be reformed to make them sustainable. But, given the challenges we see today both globally
and in Europe, the defining question is not about being left or right. It is about protecting our
societies and keep them open and it is about the role that Europe can play in doing so.
Europe needs to be reformed. It needs to demonstrate in a convincing way that it can cope
with the inequalities created by globalisation and by new technologies and that it can keep
our economies and societies open, while still protecting people.
But it is the ECB's monetary policy that makes the rich people in Europe even richer.
A recent study by the Deutsche Bundesbank points out that our accommodative monetary
policy has helped unemployed people to find new jobs. Try to imagine the situation if, from
2007 onwards, the ECB had done nothing in response to the crisis. Would the poorest
people be better off now? I don't think so, because the crisis would have been far worse.
The ECB has been pumping money in the financial system for years. Are you now also
planning to buy shares and bank bonds or even to distribute helicopter money?
We haven't discussed these options in the Governing Council. And I am not in favour of
buying bank bonds. It would create the wrong incentives for banks to reform, to get rid of
their non-performing loans and to identify new business models. As for helicopter money, it
clearly blurs the line between monetary and fiscal policy.
Will the ECB take further action or will it end its monthly asset purchase programme in
March 2017 as planned?
When the Governing Council met on 8 September 2016, economic and monetary data did
not justify changing our plans. There are downside risks but the economic recovery has been
resilient. We will continue to purchase assets on a monthly basis until March 2017 or beyond
if necessary; and in any case until we see a sustained adjustment of inflation towards 2%.
Do you think it is possible to exit the zero interest rate strategy without causing
turbulences in the financial markets?
It will be a long time before we can even start to think about exiting our accommodative
monetary policy. When we reach that point, it will be essential for the financial sector to be
robust enough to adapt to higher interest rates. We won't stand for our monetary policy being
reigned in as a result of concerns that it could pose problems for the banking sector.
Before the financial crisis central banks were only closely followed by specialists -
nowadays central banks are always in the spotlight. Do you find that helpful?
Sometimes we have to be in the spotlight in order to fulfil our mandate. In the first years of
the crisis it was all about maintaining monetary and financial stability. We had a natural role
to play in that context and we were at the forefront alongside all the other major central
banks. Now the challenge is to create long-term growth and jobs in a sustainable way. The
ECB cannot do much in those areas. It is high time for the focus to shift away from central
banks.
What if politics fails?
We live in democracies and I can't simply assume that democracies will not be able to deliver
good solutions to the problems they face. It takes time because the problems our societies
face today are exceptionally complex and interrelated.
The ECB was considered a hero in 2012. Now people frown upon the ECB's zero
interest rate policy. How does that feel?
We don't want to be a hero, and it is not decisive whether or not we are popular. People
should trust in the fact that we will achieve price stability. That is why the Treaties made the
ECB independent.