ECB German Nominee Calls on Economists to Fight ‘Harmful’ Views

(Bloomberg) --

Germany’s nominee for the European Central Bank board has issued a call to arms to the nation’s economists to speak out against “harmful & wrong narratives” attacking its monetary policy.

The plea in a tweet on Wednesday by Isabel Schnabel, a top academic at the University of Bonn and an adviser to the government, gives a glimpse of the role as a public defender of the ECB that she could seek to play at the institution. Before taking up her appointment, she still needs to pass scrutiny by the European Parliament.

Schnabel’s prospective membership of the Executive Board will put her in a key position implementing negative interest rates and bond-buying programs that are deeply unpopular in Germany. Newspapers and magazines there regularly criticize the policies for hurting savers, and former Finance Minister Wolfgang Schaeuble once claimed they contributed to the rise of the right-wing Alternative for Germany party.

Schnabel isn’t an all-out defender of monetary stimulus -- her academic track record has delved into the dangers of pumping huge volumes of liquidity into the financial system, risks that were highlighted on Wednesday in the ECB’s own Financial Stability Review. She signaled in a further tweet that her defense of the institution isn’t unconditional.

Schnabel’s move to the ECB is a new twist in a story of German discontent that has also manifested itself within the institution. She is replacing Sabine Lautenschlaeger, a longstanding critic of its monetary policy who last month became the third consecutive German board member to quit before the end of her term.

In a further tweet, Schnabel highlighted the views of Marcel Fratzscher, a former ECB economist who runs the DIW economics institute in Berlin.

To contact the reporter on this story: Paul Gordon in Frankfurt at pgordon6@bloomberg.net

To contact the editors responsible for this story: Craig Stirling at cstirling1@bloomberg.net, Jana Randow

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