Inside the dissent roiling Lagarde’s unhappy ECB

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Good morning. Today, our man in Frankfurt takes us inside the ECB’s internal animosity towards its president Christine Lagarde, and our agriculture correspondent explains Ursula von der Leyen’s desire to win over farmers.

‘Tribal’ unrest

What is Christine Lagarde playing at? The European Central Bank’s president will announce its latest monetary policy decision in Frankfurt today against a backdrop of worsening relations with many of her own staff, writes Martin Arnold.

Context: Just over half the 1,159 respondents to a union survey of the ECB’s 5,089 employees said Lagarde was performing poorly and the wrong person to lead the bank. This came days after Lagarde called economists “a tribal clique” that suffers from “blind faith” in its econometric models.

The ECB president is widely seen as a rock star of the global economy. She served as French finance minister and managing director of the IMF before taking charge of eurozone monetary affairs in 2019.

Yet she has surprisingly few fans among those working for her.

Her ratings are far below those of her two predecessors and the disillusion only seems to be growing. Almost 60 per cent of those polled said they had low or no trust at all in Lagarde and her board, up from just over 40 per cent a year ago.

The ECB responded by attacking the survey, saying it could have been filled out by the same people multiple times and went beyond the union’s remit. Some ECB officials believe the dissent stems from Lagarde’s lack of formal economics training. Others think it is because she is a woman in a man’s world.

Yet Lagarde seems to be almost deliberately trying to irritate her staff.

Speaking at last week’s World Economic Forum in Davos, she called economists “the most tribal scientists you can find, they quote each other — men more than women by the way”.

Complaining she was “surrounded” by people who all went to the same schools and are at a similar age, she said a lack of diversity was responsible for “this group thinking that doesn’t work”. 

Carlos Bowles, vice-president of the Ipso union that conducted the survey, said “many colleagues felt insulted” by Lagarde’s comments. 

One veteran eurozone economist called her comments “perplexing”.

“It is not a good idea to insult people who work for you,” Stefan Gerlach, former deputy governor of the Irish central bank who is now chief economist at EFG Bank, wrote on X. “If I were asked to conduct the Vienna philharmonic having no background in music or conducting, I would decidedly not refer to the violinists as a tribe.”

Chart du jour: Supply-side issues

Most of Europe’s heroin comes from Afghanistan. But the production of opium, its base material, has dropped following the Taliban’s return to power. This could have a significant impact on European drug markets, according to a report by the European Monitoring Centre for Drugs and Drug Addiction.

Farm offensive

Europe’s rightwing political groups are squaring up for a heated fight over rural votes ahead of the EU election in June, writes Alice Hancock.

Context: European farmers have taken to the streets with increasing anger this month to protest against EU policies governing agriculture, land and the bloc’s response to climate change. 

The European People’s party (EPP), the political group of European Commission president Ursula von der Leyen, has traditionally presented itself as the party of the farmers but, for the farmers at least, that relationship has gone sour.

“We must go very far to the right to end up in the centre,” said Dickens Bart, a dairy farmer and president of the Farmers Defence Force Belgium, who was protesting outside the European parliament yesterday.

Von der Leyen, who is due to open a series of “dialogues” with farmers today, has been under pressure from her EPP colleagues to take action and win back the farming vote, particularly following the landslide loss of centre-right parties in the Dutch elections last year.

“We expect the commission to work on a hopeful future perspective for farmers, a future that values our food producers as a strategic asset, not to add to their desperation with new bureaucracy and restrictions,” Manfred Weber, EPP group president, told the Financial Times.

“We are in a live-and-die competition with the extreme right to be seen as the party who delivers for farmers and rural areas,” another EPP official said more bluntly.

But Rob Roos, a Dutch lawmaker of the hard-right ECR group who also attended yesterday’s protest, said that the EPP were being disingenuous as they voted for many of the environmental laws farmers were protesting against.

“They say that they are here for the farmers. But in practice, they created the problems for the farmers,” Roos said. “And we . . . try to fight for these people and I think this is the difference.”

What to watch today

1. EU justice ministers meet in Brussels.

2. European Commission president Ursula von der Leyen holds strategic dialogue with farmers.

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