The European Central Bank has turned curiously quiet. I have had the impression for a few weeks that Jean-Claude Trichet, president, and other members of the six-man executive board, were appearing in public less often. Now, I have done the sums, and I was right.
Since the beginning of December, and including those scheduled for this week, their speeches have numbered fewer than in any three month period since the global financial crisis first erupted in mid-2007. (I excluded last August, a dead month for policymakers.) Since the beginning of this year, Mr Trichet has made only one full-scale address, according to the list kept on the ECB’s website. That was at the 50th anniversary this month of the Reserve Bank of Australia in Sydney, when his remarks were overshadowed by his decision to return early to join eurozone leaders in talks on the Greek crisis. In the first two months of last year, Mr Trichet gave at least nine speeches.
Such reticence is uncharacteristic. Unlike other central banks, which like to ration appearances, the ECB has since the launch of the euro in 1999 been on a mission to explain its role and thinking to as many audiences as possible. The strategy has been an important part of building its credibility.
It is true that media interviews have continued, and Mr Trichet has given press conferences in Frankfurt after the two interest-rate setting meetings so far in 2010. Nevertheless, it is hard to escape the impression that the central bank sees less to talk about.
Why might it be holding back? One reason could be that the action at the ECB has slowed. With the eurozone economic recovery still looking limp, its main interest rate could be on hold for much of this year. The “exit strategy” to unwind emergency measures taken after the collapse of Lehman Brothers was set out clearly last year.
But worries about Greece and the resulting risks to eurozone stability have exploded onto the scene since December – creating lots to talk about for the monetary guardian of Europe’s single currency. The ECB has strong views on Greece – that it should focus on helping itself and that possible bail-out plans are best not talked about. The problem, perhaps, for the ECB is that too high a profile might seem inappropriate given this is, essentially, a political crisis.
That should not stop its executive board members talking about other subjects, however – the longer term competitive challenges facing the eurozone or the future of liquidity provision, for example. Then again, maybe they feel that would appear negligent if they made a lot of speeches, and didn’t mention Greece at all?
