The Bundesbank invited civil society organisations to a virtual event in order to listen to their views on issues relating to the Eurosystem’s monetary policy strategy. Bundesbank President Jens Weidmann thanked the participants for their contributions and announced that he would raise the insights gained in the ECB Governing Council’s deliberations. “I greatly appreciate that you have given so much thought to the issues we raised,” said the Bundesbank President.

Lively discussion about Eurosystem objectives

The event centred on four topics, the first of which was the role that price stability plays for the various organisations and their members, and how changes in the general price level affect them. On this issue, all representatives of the organisations agreed that price stability should be an important objective of the Eurosystem.

In addition, the organisations reported on their expectations and concerns regarding economic developments. Many stressed that the coronavirus pandemic and the resultant economic crisis posed major challenges to them and their members. A particular problem cited by the representatives was the uncertainty about how quickly the economy would recover from the crisis.

There was lively debate on the question of which other issues besides price stability the organisations consider important in terms of the Eurosystem and where the limits of monetary policy lie. A number of organisations made the case for broadening the ECB’s monetary policy mandate and, in particular, focusing more on climate policy objectives. Others stressed that the central bank should concentrate on price stability as its objective.

Finally, Mr Weidmann and the participants discussed how they believe central banks should best communicate with the general public. Some organisations expressed the wish that the Bundesbank make even greater use of more easily understandable formats to explain its work. Several also proposed a repeat of the “Bundesbank Listens” event as part of a regular communication format.

Bundesbank hasn’t finished listening

As the event came to an end, the Bundesbank President stressed that it did not mean the Bundesbank had finished listening, saying that a central bank has to explain its monetary policy measures and relies on the confidence of its public. “It should therefore also be aware of the general public’s expectations of monetary policy. In that regard, this event, and all other listening events, has great value above and beyond the strategy review,” the President remarked.

At the same time, Mr Weidmann warned against overburdening monetary policy, advising that an independent central bank cannot take the place of political solutions in a democracy. “This is because the political mandate to shape our society lies with elected representatives of the people who make up parliaments,” Mr Weidmann said.

Background to the strategy review

“Bundesbank Listens” is one of the numerous events taking place as part of the Eurosystem’s strategy review. The Governing Council of the ECB decided in January 2020 to review its monetary policy strategy. This review will touch on the understanding of price stability, monetary policy instruments, economic and monetary analyses and the ECB’s communication practices. The review will also take into account how other considerations, such as financial stability, employment and environmental sustainability, can be relevant in pursuing the ECB’s mandate.

Participating institutions

• Arbeitsgemeinschaft berufsständischer Versorgungseinrichtungen (ABV)
• Bund der Steuerzahler e. V.
• Bundesverband der deutschen Industrie e. V. (BDI)
• Bundesvereinigung der deutschen Arbeitgeberverbände (BDA) 
• Bund für Umwelt und Naturschutz Deutschland e.V. (BUND)
• Bürgerbewegung Finanzwende e. V. 
• Deutscher Bauernverband e. V. (DBV) 
• Deutscher Gewerkschaftsbund (DGB)
• Greenpeace e. V.
• Haus & Grund Deutschland
• IG Metall
• Vereinte Dienstleistungsgewerkschaft (ver.di)
• WWF Deutschland
• Zentralverband des deutschen Handwerks (ZDH)