FRANKFURT AM MAIN (Reuters) – European Central Bank officials are increasingly at odds about how to manage the economy during the second wave of COVID-19, and this jeopardizes the agreement hard-won by ECB chief Christine Lagarde, interviews with eight insiders of the bank.
Lagarde has managed to end the internal conflicts that characterized the ECB in the final months of Mario Draghi's tenure last year. She also managed to carry out a set of stimulus measures to keep the economy afloat amid a pandemic.
Tensions rise again, however, as the rise in coronavirus cases prompts the ECB to consider increasing stimulus.
Conservative politicians – “hawks” in central bank jargon – say the ECB is downplaying some positive signals, such as a number of better-than-expected economic indicators in the summer.
On the other hand, dovish-minded ECB officials are pushing Lagarde to use stronger language when it comes to the risks to growth and the dangers of a stronger euro against the dollar.
The controversy was already evident during the last ECB meeting in September, eight sources told Reuters, all of whom have direct knowledge of the process.
The ECB, speaking on behalf of board members, declined to comment.
(Balazh Koranyi, Francesco Canepa with participation of Frank Siebelt. Translated by Olga Beskrovnova. Editor Anna Kozlova)