The European Parliament could have an early say in the race for the European Central Bank vice presidency, a win for lawmakers after years of pushing for more influence over the EU’s top appointments. Eurozone finance ministers will begin the process of selecting a successor to Luis de Guindos on Thursday, according to a draft timeline seen by POLITICO and an EU diplomat who separately confirmed the document’s content. The deadline for submitting candidates will be in early January, although an exact date is still to be agreed.  According to the document, members of the Economic and Monetary Affairs Committee will have the right to hold in-camera hearings with all the candidates in January before the Eurogroup formally proposes a name to the European Council for appointment. This would mark a break with the past, when MEPs only got involved in the process after ministers had already had their say. Involving the Parliament at an earlier stage could influence the selection process, for example by giving it the chance to press for adequate gender balance in the list of candidates. This had been one of the Parliament’s demands in its latest annual report on the ECB’s activities. “The Parliament will play a stronger role this time,” the diplomat told POLITICO. So far, only Greece is considering proposing a woman for the vice president slot: Christina Papaconstantinou, who is currently deputy governor at the C. Finland, Latvia, Croatia and Portugal are all set to propose male candidates. The candidate picked by ministers will return to lawmakers for an official hearing, which should take place between March and April, according to the document. MEPs have limited power over the final appointment, but they will issue a nonbinding opinion, which is then adopted through a plenary vote. The new vice president will be formally appointed by the European Council in May, before taking office on June 1. So far, only Greece is considering proposing a woman for the vice president slot. | Aris Messinis/Getty Images The vice president’s position is the first of four to come up for rotation at the ECB’s Executive Board over the next two years. It wasn’t immediately clear if the other three appointments — including the one for a new president — will give the lawmakers the same degree of influence. CORRECTION: This article was updated on Dec. 9 to correct the spelling of the surname of the deputy governor of the Bank of Greece.

European Central Bank officials are growing increasingly jittery as Kevin Hassett — a close ally of President Donald Trump with very little central bank experience — emerges as the frontrunner to lead the U.S. Federal Reserve. A report last week by Bloomberg described Hassett, whom Trump picked at the start of the year to head the White House National Economic Council, as the “emerging front-runner” to replace current Fed Chair Jerome Powell.  Hassett’s rise has set off alarm bells in Frankfurt. European officials fear Hassett, under pressure from his boss in the White House, could push the Fed into cutting interest rates far more aggressively than Powell — even though that might risk unleashing another wave of inflation that could ripple out across the world. “If markets obtain a firm belief that the new [Fed chair] is subject to fiscal or any other dominance at the expense of the inflation target, there will be capital flight from the U.S. and an erosion of the value of the dollar with serious consequences worldwide — including higher inflation,” one ECB official said.  Like others interviewed for this story, the official spoke on condition of anonymity to discuss internal deliberations. “There is a possibility that the U.S. will have some inflationary bias … because of the political involvement,” a second ECB official warned. The Bloomberg report came just before Thanksgiving, after Treasury Secretary Scott Bessent had whittled down a long roster of candidates into a shorter list. Later during the holiday weekend, aboard Air Force One, Trump told reporters that “I know who I’m gonna pick,” but he told a cabinet meeting on Tuesday that he wouldn’t announce his decision until early in the new year.  Prediction markets such as Polymarket have made Hassett the odds-on favorite since then.  “For Trump, Hassett would be the best choice,” a third ECB official agreed, noting the candidate’s political proximity to the White House.  PRESSURE CAMPAIGN Trump has repeatedly attacked the Fed since returning to office in January, blasting Powell — whom he appointed as Chair during his first term — as a “numbskull” and a “major loser” for not cutting interest rates more quickly. The Fed withstood the pressure until September, when signs of a slowdown in the labor market emerged. It cut rates again in October, but Powell upset those expecting more easing soon by warning that another cut in December is by no means “a done deal.” Since then, several of his colleagues on the Federal Open Markets Committee have expressed reluctance to cut any further in December, pointing to an inflation rate stuck above the 2 percent target. More recently, as Jerome Powell has come under fire from the White House, European colleagues have rushed to defend him. Usually, when the labor market weakens, so does inflation, but that hasn’t happened this time. At both of his last two press conferences, Powell noted that the Fed’s dual mandate of keeping prices stable while pursuing full employment were currently “in tension” with each other.  Hassett has presented a very different view, telling CNBC in November that “inflation has come way down” from the 5 percent that it averaged during Joe Biden’s presidency andthat “the trajectory is really, really, really good if you look at it.” That’s despite U.S. headline inflation actually rising in four of the last five months.  MY GOOD FRIEND BEN That is why many in Frankfurt see alternative candidates — including the dovish but experienced Fed Governor Christopher Waller — as far safer choices. Also still in the running, according to various sources, are former Fed Governor Kevin Warsh, BlackRock fixed-income chief Rick Rieder, and sitting Governor Michelle Bowman. For decades, relations between the Fed and the ECB have been collegial and cooperative. Members of the small, globally connected circle of central bankers have long seen themselves as a kind of fraternity. During the height of the 2008 financial crisis, then-ECB President Jean-Claude Trichet liked to emphasize that closeness by repeatedly referring to Fed Chair Ben Bernanke as “my good friend Ben.” More recently, as Powell has come under fire from the White House, European colleagues have rushed to defend him. Lagarde told a Washington Post event in April that “I have … enormous respect for Chair Powell, and I know that he’s doing exactly what’s expected of him to serve the American people.”  Deutsche Bundesbank President Joachim Nagel echoed such comments more recently. Outside the eurozone, Bank of England Governor Andrew Bailey — another central banker anxious about the risk of financial volatility — called Powell “a man of the utmost integrity.” With Powell’s departure looming, ECB officials increasingly fear that this long-standing, trust-based relationship may be nearing its end, a fourth official told POLITICO. These concerns have already begun to influence the ECB’s strategic considerations in other areas, including liquidity policies and its own leadership succession. The ECB declined to comment. (Additional reporting by Ben Munster)

LONDON — Financial markets gave a cautious welcome to Chancellor Rachel Reeves’ budget — to the extent that they could make sense of it. The presentation of the U.K. government’s fiscal plans for the next year was badly disrupted when the Office for Budget Responsibility accidentally published its analysis of the bill before Reeves had even announced it in parliament. That forced investors into a frantic search for its key details. As the initial uncertainties lifted, the pound rose by 0.2 percent against the dollar and a little more against the euro, on the key takeaway that the annual tax take will rise by £26 billion by the 2029-2030 fiscal year. That will squeeze the budget deficit and give Reeves more room for maneuver in the event of a fresh downturn. “The Chancellor more than doubled her fiscal headroom from around £10 billion to just under £22 billion,” Deutsche Bank analyst Sanjay Raja said in a note to clients. Such considerations should reduce the U.K.’s vulnerability to swings in global financial markets, which has been exposed more than once in a year when U.S. President Donald Trump has upended the global trading order. Investors had worried all year that a global economic slowdown could push Britain in the direction of a debt crisis. But Reeves now estimates the budget deficit will fall to 1.9 percent of GDP by 2030, from 4.5 percent of GDP in the current year. That will stabilize the debt ratio well below 100 percent of GDP, but at a cost. By freezing income tax thresholds for the rest of this parliament, and by a host of smaller measures, Reeves will raise the overall tax take to a record 38 percent of gross domestic product, according to the OBR. The new debt trajectory generated a measure of relief in bond markets, visible in a drop of 0.05 percentage points in the government’s key 10-year borrowing cost to 4.44 percent by 2 p.m. in London. That was the lowest since the leak of Reeves abandoning her planned increase in income tax rates two weeks ago. It also fed through into slightly stronger expectations of interest rate cuts from the Bank of England. The two-year gilt yield, which closely tracks expectations of the Bank Rate, fell 0.03 percentage points to a 15-month low of 3.74 percent. Reeves was careful to avoid the mistakes of her last budget which, by raising regulated prices sharply, drove headline inflation back to 4 percent over the summer. In her statement on Tuesday, she went in the other direction, freezing rail and bus fares and removing some of the government-directed charges on energy bills. The OBR said these measures would take 0.4 percent off the rate of inflation over the next year. “I have cut the cost of living with money off bills and prices frozen,” Reeves said. Deutsche’s Raja said the measures would have a “modest but meaningful” impact on inflation, making the Bank’s job “slightly easier” for the next 12 months. The Bank of England held off from cutting the key Bank Rate at its latest Monetary Policy Committee meeting this month, despite increasingly signs of the job market weakening. Most analysts had said at the time they would expect a cut in December, as long as the budget didn’t add to inflationary pressures.

Europe must work to unleash the untapped potential of its internal market, European Central Bank President Christine Lagarde said, noting that she given the very same message in 2019 – before Russia’s war on Ukraine and U.S. President Donald Trump’s disruptive second presidency. Speaking at the annual European Banking Congress in Frankfurt, Lagarde said the ECB estimates that internal barriers in services and goods markets are equivalent to tariffs of around 100 percent and 65 percent, respectively. While acknowledging that barriers cannot be removed entirely, she pointed out to three key steps to boost potential. These include a overhaul of EU governance to see the bloc move to qualified majority voting to avoid legislation being bogged down by individual vetoes. The EU should also introduce a pan-European regime for corporate law, the so-called 28th regime. Finally, it should revive the principle of mutual recognition to allow goods and services to move freely within its Single Market. Lagarde gave political leaders a pat on the back for boosting government spending on defense and infrastructure, and for learning from the experience of past crises. “The fiscal packages now being implemented for defense and infrastructure – especially here in Germany – are coming at the right time for Europe and will have a measurable effect on growth,” she said.

The starter’s gun is about to fire on the race to succeed Christine Lagarde as European Central Bank president in 2027, and two heavyweight countries who have never held the position look likely to make the running: Spain and Germany. Madrid has been conspicuously silent on nominating a replacement for its current representative on the board, Luis de Guindos, who is preparing to leave the vice presidency in June. That has fueled speculation in markets and policy circles that the eurozone’s fourth-largest member is eyeing a bigger prize. The ECB is set for a major leadership reshuffle over the next two years, creating a rare opportunity for national governments to install trusted figures at the top of one of the EU’s most powerful institutions. De Guindos’ post is up for grabs in May next year, while the chief economist role, the presidency and the important markets division will all become vacant in 2027. While Germany, France and Italy have always held one of the six coveted Executive Board seats, Spain has endured a six-year gap without representation. Should it remain silent as the other board seats fill up, this would be a clear indication that Spain wants the top spot. The Spanish economy ministry declined to comment directly, but stressed that “Spain remains firmly committed to having a meaningful and influential presence in key European institutions, as it has consistently done.” Betting on the presidency is a gamble for Madrid, and the competition is fierce — not least because Germany, which has never held the top ECB post, may also want to seize the chance. For once, Spain has a strong candidate in Pablo Hernández de Cos, the former Bank of Spain governor who is now general manager at the Bank for International Settlements. Groomed by former ECB President Mario Draghi, de Cos restored the Bank of Spain’s reputation after a series of missteps before and during the financial crisis. His achievement was implicitly acknowledged by his appointment to two terms as chair of the Basel Committee for Banking Supervision (BCBS), the global standard-setter for bank regulation. But inevitably, the shadow of U.S. President Donald Trump looms over the issue. De Cos moving to the ECB could cost Europe the BIS leadership. Given Europe’s fading relevance to the global economy, Trump may persuade others that — with the IMF, BCBS and the Financial Stability Board already headed by Europeans — the Old Continent has more than its fair share of top jobs. While not powerful, the BIS is a highly prestigious institution commanding a unique overview of global financial flows. Two people familiar with the ECB’s thinking told POLITICO that its current top management is concerned about the risk of losing a slot that has traditionally been held by a European. GERMANY’S MOMENT Much will depend on Germany, which, like Spain, has never held the ECB presidency. The German government will form an opinion “in due course” but will refrain from speculation today, a spokesperson said. The country’s previous contenders — Axel Weber and Jens Weidmann — both fell victim to their unbending faith in conservative monetary orthodoxy in times of crisis. But today, after the worst bout of inflation in Europe for over half a century, the climate looks far more welcoming for a more hawkish leader. As the current Bundesbank president, Joachim Nagel would be the obvious choice. | Pool photo by Maxim Shemetov via Getty Images As the current Bundesbank president, Joachim Nagel would be the obvious choice. A more moderate voice than either Weber or Weidmann, Nagel may be more acceptable to other member states. However, Nagel — a member of the SPD junior coalition partner — has more than once stepped on the toes of German Chancellor Friedrich Merz — most recently by expressing support for joint European debt issuance to finance defense projects. Like de Cos, Nagel could also face competition within his own country. Lars-Hendrik Röller, formerly chief economic advisor to then-Chancellor Angela Merkel and still a heavyweight in Berlin policy circles, has floated Jörg Kukies, who was finance minister under Olaf Scholz. While also a social democrat, Kukies is clearly associated with the right wing of the party and has not recently opposed Merz in public. Kukies may well be an acceptable candidate for the chancellor, a person close to Merz told POLITICO. His impeccable English, PhD in finance from the University of Chicago and a spell leading Goldman Sachs’s German operations would also help his candidacy. But intriguingly, at a recent public event in Berlin, Bank of France Governor François Villeroy de Galhau appeared to suggest that Röller has also been touting a German woman — rather than Nagel — for the presidency. That woman could be the ECB’s current head of markets, Isabel Schnabel, who is said to be eyeing the post. Ordinarily, however, no one is allowed to serve more than one term on the Executive Board, meaning a legal loophole would need to be found to accommodate her. Given the presence of alternative candidates, and given that other member states may view her as excessively hawkish, one former board member said there’s no obvious reason why Germany should risk advancing her. In any case, Berlin may prefer to support a hawk from another country, to avoid pressure to give up the European Commission presidency early: Ursula von der Leyen’s term expires in 2029. GOING DUTCH? Enter Klaas Knot, who stepped down as president of the Dutch central bank in June after 14 years. Knot, like Draghi, a former chair of the Financial Stability Board, would bring deep institutional experience and monetary policy expertise. He also drew conspicuously supportive comments last month from Lagarde, who said he “has the intellect” as well as the stamina and the “rare” and “very necessary” ability to include people. Most of the obstacles in Knot’s way look surmountable: While he took a clearly hawkish line throughout the eurozone crisis, he became a far more nuanced team player during his second term. And while the Netherlands would still have a representative — Frank Elderson — on its board when the presidency comes up, a similar situation was dealt with easily enough in 2011, when Lorenzo Bini Smaghi left early to make room for Draghi. Knot’s only real problem is that he is currently out of the policy circus. “He will need to find a way to stay visible and relevant to bridge the time,” the former Executive Board member said. Knot is still tending potentially important connections: He is advising the European Stability Mechanism (the EU’s bailout fund) on strategic positioning, and the European Commission on central bank independence in potential accession countries. He also remains an avid public speaker — with no less than five engagements at the International Monetary Fund’s annual meeting last month.  But two years can be a long time in European politics. Carlo Boffa contributed reporting.

VIENNA — Donald Trump’s trade war has been less damaging for Europe’s economy than widely feared, and there is a hope that a stable recovery is underway, European Central Bank governing council member Martin Kocher said.  “We have not seen the strong reduction in growth rates and the inflationary effects of the trade conflicts that were anticipated in March and April,” the Austrian National Bank governor told POLITICO in an interview on Wednesday. On the same day that a closely-watched business survey pointed to an unexpected and marked pickup in activity in October, Kocher suggested there were emerging signs of an economic pickup. Kocher, who served as economy minister before joining the central bank in September, nonetheless warned against complacency. “I don’t want to sugarcoat what we are seeing,” he said. “This is the highest level of tariffs since the 1930s, and there will be effects on the world economy.” The impact on the eurozone will be exceptionally difficult to predict because we have not experienced anything similar in nearly 100 years, Kocher said, adding that this was the primary reason for diverging views about the ideal monetary policy path ahead on the ECB’s governing council. Falling inflation has allowed the ECB to cut its key deposit rate eight times since the middle of last year, bringing it down from a record-high 4 percent to 2 percent currently — a level that the Bank says is no longer restricting the economy. A behavioral economist rather than a monetary one, Kocher is one of the newest faces on the governing council, having succeeded Robert Holzmann earlier this year. Most analysts expect a more moderate approach from him than from the veteran hawk Holzmann, who was often the lone dissenter on the rate-setting body. The governor’s office leaves no doubt there is a change in style underfoot — the wooden desk replaced by a modern, height-adjustable table and new, colorful paintings by Austrian artists Wolfgang Hollegha and Hans Staudacher on the wall. While policymakers unanimously agreed to keep interest rates on hold last week, ECB President Christine Lagarde revealed that “there are different positions and different views” on whether the Bank may yet have to cut them one more time. “The difficulty is to assess whether most of the effects of the trade conflicts have already materialized or whether we will see them trickle down in the economy over the next couple of months and perhaps even years,” he said. “I’m convinced that we’ll see more effects over time. But whether they will be overall inflationary, or rather disinflationary in the euro area, is difficult to tell.” RISKY OUTLOOK Kocher explained it’s reasonable to expect deflationary pressure from the rerouting of trade from China to Europe that was flowing to the U.S. before the trade conflict began, but it’s equally plausible that geopolitical conflicts may hamper supply chains and boost prices. And things can change very fast. “Last week’s APEC summit with some interim agreement between the U.S. and China might have changed the outlook again,” he noted. While policymakers unanimously agreed to keep interest rates on hold last week, ECB President Christine Lagarde revealed that “there are different positions and different views” on whether the Bank may yet have to cut them one more time. | Nikolay Doychinov/AFP via Getty Images At the summit, the U.S. and China committed to lowering the temperature in their trade and tech rivalry. The so-called “Gyeongju Declaration” called for “robust trade and investment” and committed leaders to deepen economic cooperation. In this environment, “we have to wait and see to what extent [risks] materialize” as it’s difficult to take rate decisions “primarily based on the risk outlook,” Kocher said. As things stand, he said, the ECB would need to “see some risk materializing that would reduce … the GDP projection to a significant extent, and that would lead perhaps to some disinflationary effects” before it discussed cutting again. The governing council next meets in December, when a new set of forecasts will include estimates for growth and inflation in 2028 for the first time. Kocher warned against placing too much emphasis on the 2028 numbers, which many economists and investors focus on as an indication of whether the Bank is on track to meet its medium-term inflation target. While the forecast will offer more certainty about the outlook for 2026 and 2027, that for 2028 will be little more than “indicative,” he argued. “You always have to take projections with a grain of salt. And the further away the projection horizon, the larger the grain of salt.” GREEN BATTLE CONTINUES Kocher was speaking on the day that a majority of the EU’s 27 governments decided to water down their collective target for pollution reduction, seen by many as a sign that political momentum has swung after half a decade of green victories on climate policy. But Kocher fiercely defended the ECB’s commitment to green central banking. “Whatever is decided today, there’s no significant change in the targets of the European Union to become climate neutral in the near future,” Kocher said. And so long as it does not interfere with the ECB’s inflation-targeting mandate, the ECB has the “freedom” to support those objectives. He said the governing council had reaffirmed the view, even in the last couple of months, that it is essential to take climate risks into account in its projections, citing the massive impact that extreme weather events can have on growth and inflation. In contrast to his predecessor, Kocher also backs the inclusion of a climate criterion in the Bank’s collateral framework, a step that could one day make it more expensive for polluting companies than for green ones to borrow money. Critics of green central banking have argued that it is up to elected politicians, rather than central bankers, to create incentives for green business. But Kocher, a former downhill racer who has seen Austria’s key tourism sector struggle with an ever-shorter ski season, is unconcerned. “As long as it does not create a trade-off with our inflation target, I am perfectly fine with it,” he said.

SOFIA — The euro is more than just a currency: it’s a geopolitical insurance policy in a fragmenting world. That was the message the EU’s most senior economic leaders sent to a skeptical Bulgarian public during a pro-euro charm offensive in Sofia on Tuesday. Bulgaria is due to adopt the euro on Jan. 1, 2026, but only about half the population supports joining the single currency. Fears about inflation and centralization of power in Brussels and Frankfurt — exacerbated by alleged Russian disinformation campaigns — have turned many against the project. In a push to ease these concerns, Economy Commissioner Valdis Dombrovskis and European Central Bank President Christine Lagarde each stressed the geopolitical benefits of joining the euro. “Bulgaria is joining the euro … at a point when there is more volatility, at a time when we have more shocks, one after the other, compounded, and at a time where the global order, as we have known it, is more fragmented, and when friends are probably fewer,” said Lagarde, adding: “It’s important to close ranks and to be together.” Lagarde said that during the financial crisis, the single currency had proved a defensive shield against shocks and depreciation. Dombrovkis said that, in itself, the adoption of the euro could help Bulgaria compensate for growing geopolitical risks in investors’ eyes. “In Baltic countries, despite being geopolitically exposed, the borrowing costs were lower than in Poland, and to a large extent investors assessed that [the euro] is a stabilizing factor,” he said. Bulgaria’s accession to the euro has been planned for more than a decade, but as the date got nearer, it has spawned conspiracy theories and populist politics, alongside more justified concerns about the currency changeover. Investigative reports have identified Russian-funded social media campaigns to undermine support for the euro. Last April, the far-right party Revival, which arranged several anti-euro protests over the last year, signed a deal with Vladimir Putin’s Russia United. The percentage of Bulgarians who support the euro has slightly increased in the last few months. | Nikolay Doychinov/Getty Images Asked about Russian influence on public opinion about the euro, Dombrovskis said: “It is not a secret that Russia is waging a hybrid war against Europe and European member states. It is provocation, acts of sabotage, violation of European airspace, meddling in political processes in the European Union, also in other countries, and it is spreading disinformation.” The percentage of Bulgarians who support the euro has slightly increased in the last few months, reaching 51 percent according to a survey cited by Finance Minister Temenuzhka Petkova — up from 45 percent earlier in the year. European Stability Mechanism chief Pierre Gramegna highlighted risks coming from Washington’s new approach to monetary policy and cryptocurrencies: “The U.S. administration is changing its position on so many topics, including on finance and currency, that being part of a large bloc is a huge advantage,” he said, adding people in Bulgaria are not fully conscious of this. “The risk entailed in the digital currencies can be faced better if we are in the euro area,” he said.

LONDON — Nigel Farage’s second-in-command called for a rethink of the U.K.’s interest rate-setting committee in a fresh sign that a Reform UK government could intervene in Britain’s independent central bank. Richard Tice, the deputy leader of the populist-right party that’s surging in U.K. polls, told POLITICO in an interview that there should be a debate over potentially sweeping changes to the make-up and role of the Bank of England’s Monetary Policy Committee (MPC).  “It’s not unreasonable to check whether or not we’ve got the membership of the MPC right. I mean, it’s almost 30 years,” he said, referencing the 1997 establishment of the MPC. “So you could say, well, have we got the membership right? Have we got the number of government representatives right? Should they or shouldn’t they have a vote? Have we got the mandate right?”  He added: “Should it have a growth mandate? We should have that debate.”  The BoE’s rate-setting committee is made up of nine members, including Governor Andrew Bailey, four senior central bank executives, and four independent external members appointed by the chancellor. A representative from the U.K. Treasury joins MPC meetings but is not allowed to vote.   Monetary policy has become increasingly politicized since the Covid-19 pandemic, after which inflation soared to double digits and the BoE raised rates to their highest levels in 15 years. The International Monetary Fund has warned the U.K. faces the highest inflation in the G7 this year and next.   Tice’s comments come ahead of a speech in the City of London Wednesday, where he is expected to set out a wide-ranging aspiration for financial services deregulation should Reform UK enter government in Britain’s 2029 general election. The deputy leader said the U.K. needs a “complete sea change” in how risk is approached in the City, and called for further red tape cutting on banks, hedge funds and other City giants. “No one’s stepping back and asking big, philosophical questions,” he said.   Tice told POLITICO his party is “happy” with the BoE’s independence, but said it is “ridiculous” that “no one dares to” question the performance of the central bank despite the U.K. “outsourcing all responsibility for massive issues that affect ordinary people.”  He argued the BoE had “failed” under Conservative Liz Truss, who was forced out as prime minister after bond yields spiked in the wake of a tax-cutting budget, leading banks to increase their lending rates. Tice accused City regulators of “missing” the issue of liability-driven investments (LDIs), which increased the strain on pension funds during that period, and said the Bank of England “could have actually stepped in and prevented the carnage.”  Truss has repeatedly blamed the Bank of England for failing to anticipate the market consequences of her budget. The central bank intervened after her mini-budget to calm the markets by implementing an emergency bond buying scheme.  WIDER REFORM Reform leader Farage, who is set to give a speech in the City Monday on his broader vision for the economy, has gone further, saying Bailey has “had a good run” and he “might find someone new” if the party wins the next election.  Bailey’s term is due to end in 2028, before the election. Tice did not rule out the prospect of a Reform government forcing out an underperforming central bank governor in future, saying: “At the end of the day, any public official has to be accountable for their performance.”  However, he declined to liken Reform’s stance to Donald Trump’s approach to the Federal Reserve, after the U.S. president repeatedly attempted to get rid of chair Jerome Powell.  Reform UK is currently ahead in the polls, as Britain’s Labour government continues to struggle with its messaging on the economy, immigration and frustration within Prime Minister Keir Starmer’s top ranks. Reform leader Nigel Farage, who is set to give a speech in the City Monday on his broader vision for the economy. | Mark Kerrison/Getty IMages Tice argued Labour — which has made growth its primary objective by rolling back 2008 financial crisis legislation — is adding rather than removing regulation, and accused it and the opposition Conservatives of “tinkering around the edges.”  “We’re not going to create any form of meaningful growth under the current trajectory of this government, or under the trajectory of any Conservative plans,” he said. “We are heading towards impoverishment and growth has relentlessly declined as borrowing has relentlessly increased, particularly if you look per head. And it requires a complete sea change in the way that we think about risk and reward.”  Asked whether a Reform government would go further than Labour on deregulation, Tice said: “Yes. We want to ask some very big questions about how we do things.”  Tice also argued that regulators such as the Financial Conduct Authority — which Farage hopes to strip of its role regulating banks — have “utterly failed to do their job.”  Asked if he believes Britain has now moved on enough since the 2008 financial crisis to strip away “protections,” he replied: “There are all sorts of different reasons why the ’08 crash happened. But we supposedly had all the mechanisms of protection there, and they failed. No one was properly held to account.” 

The European Central Bank left its key interest rate unchanged at 2 percent on Thursday, with the euro area economy still proving itself resilient and with inflation reasonably steady around the Bank’s target. The decision was consistent with guidance from policymakers that monetary policy is in “a good place,” giving them room to wait for year-end projections that will include the ECB’s first inflation forecast for 2028. The economy grew a faster-than-expected 0.2 percent in the third quarter of this year, while preliminary data showed inflation ticking up to 2.2 percent in October, calming fears about a possible undershoot. “The economy has continued to grow despite the challenging global environment,” the ECB said in its statement. “The robust labor market, solid private sector balance sheets and the Governing Council’s past interest rate cuts remain important sources of resilience.” At the same time, however, the ECB warned that “the outlook is still uncertain, owing particularly to ongoing global trade disputes and geopolitical tensions.” Risks remain abundant: beyond potential delayed effects from new U.S. tariffs, they include a further strengthening of the euro, as the U.S. Federal Reserve continues to lower its own rates. On Wednesday, the Fed cut rates by another quarter-point — the second consecutive reduction — citing a slowdown in job growth. Domestically, a delay to Germany’s fiscal stimulus measures and France’s ongoing budget crisis could also threaten to push the ECB out of its “good place.” Even so, a growing number of economists believe the central bank has reached the end of its easing cycle, a recent Reuters survey showed. While a slim majority of analysts last month expected one more rate cut before the end of 2026, nearly 60 percent now anticipate no further changes to borrowing costs in the current cycle.

The European Central Bank’s staff union is taking the bank to court, accusing ECB management of trying to silence and intimidate its representatives in violation of the principles of European democracy. The case, lodged with the European Court of Justice on Oct. 13, marks the latest escalation in a battle between union representatives and management, where relations have deteriorated since Christine Lagarde took over as ECB president in 2019. The action contests a series of letters the bank addressed to the International and European Public Services Organization (IPSO) union and one of its senior representatives “restricting staff and union representatives from speaking publicly about workplace concerns, such as favoritism and the ‘culture of fear’ at the ECB,” the union said in a statement. These letters constitute “an unlawful interference” with basic freedoms guaranteed by the EU Charter of Fundamental Rights and the European Convention on Human Rights, the union said. “Freedom of expression and association are not privileges; they are the foundation of the European project.” An ECB spokesperson said the bank does not comment on court cases, but that it “is firmly committed to the freedom of expression and the rule of law, operating within a clear employment framework that is closely aligned with EU Staff Regulations and is subject to European Court of Justice scrutiny.” The first letter, signed by the ECB’s Chief Services Officer Myriam Moufakkir, came in response to an interview given by union spokesperson Carlos Bowles to Germany’s Boersen-Zeitung daily paper, published May 7. In it, Bowles had warned that a culture of fear may contribute to self-censorship, groupthink and poor policy decisions. The interview came at a time when the ECB’s failure to anticipate the worst bout of inflation in half a century had provoked widespread and public soul-searching by policymakers. It also followed a union survey in which around two-thirds of respondents said being in the good graces of powerful figures was the key to career advancement at the ECB, rather than job performance.   IPSO IS A FOUR-LETTER WORD According to the IPSO union, Moufakkir responded with a letter stressing that staff and union representatives must not make public claims of a “culture of fear” within the institution or its possible effects on ECB operations — including its forecasting work, which had come under especially intense scrutiny. It also accused Bowles of breaching his duty of loyalty under the ECB’s internal code of conduct, and instructed him to refrain from public statements that could “damage the ECB’s reputation.” A later letter by Moufakkir, addressed to IPSO dated Aug. 1 and seen by POLITICO, spells out the thinking. In it she stresses that the right of “staff representatives … to address the media without prior approval … applies exclusively to ‘matters falling within their mandate’. It does not apply to the ECB’s conduct of monetary policy, including its response to inflation.” In his interview, Bowles made no reference to current or future policy but rather to a work environment that he said fostered groupthink. Lagarde herself had warned against such risks, denouncing economists the previous year in Davos as a “tribal clique” and arguing that a diversity of views leads to better outcomes. Bowles had made similar statements to the media before, such as in an interview with the Handelsblatt daily paper published in January 2016, without eliciting any reaction from the bank’s management. Contacted by POLITICO for this story, the ECB said it had “stringent measures to ensure analytical work meets the highest standards of academic rigor and objectivity, which are essential to the ECB’s mandate of price stability and banking supervision.” Moufakkir suggested that Bowles’ comments undermine trust in the ECB and that this trust is crucial if the ECB is to deliver on its mandate. “Freedom of expression, which constitutes a fundamental right, does not override the duty of loyalty to which all ECB staff are bound,” she argued. Bowles rejected that framing, arguing in a letter to Moufakkir that he had a “professional obligation” to address such issues and their impact on the ECB’s capacity to fulfil its mission. PAPER TRAIL The trouble, according to the union, is that Moufakkir addressed the first two letters to an individual union representative (Bowles) who was speaking on its behalf, effectively undermining the union’s collective voice.  In her email, the union said, Moufakkir also “heavily misrepresented” Bowles’s comments and accused him of misconduct without affording him a hearing. In her letter from Aug. 1, Moufakkir maintained that her original letter to Bowles “was not a formal decision” to be recorded in his personal file, but rather a “reminder and clarification of applicable rules.”  “Its purpose was not to intimidate or silence Mr Bowles but to highlight to him the importance of prudence and external communications about ECB matters,” she wrote. The union said it sees this framing as an effort by the ECB to shield itself from judicial review: the letter addressed to Bowles was marked ECB-CONFIDENTIAL and Personal, conveying the impression of an official document. According to a person familiar with the matter, a special appeal launched by Bowles to the executive board to retract Moufakkir’s instruction has since been dismissed — without addressing its substance — because the letters had no binding legal effect and were therefore inadmissible. That has now prompted the union to turn to the ECJ; a response to a second appeal by Bowles remains outstanding. The union said that what it perceived as attempts by the ECB to silence union representatives have succeeded: Previously scheduled media interviews have been “cancelled due to fear of retaliation.” When contacted for comment, Bowles declined, citing the same reason. WHAT COMES NEXT? The ECB will have two months to submit its defense to the court. As an EU institution, the ECB is neither subject to German labor laws nor to similar rules in other EU member states and instead enjoys extensive scope to set and interpret its own rules. Out of 91 employment-related court cases since the bank’s inception, the ECB has won 71. Regardless of the legal implications, the union warned that the ECB’s approach undermines its institutional integrity and damages its credibility.  “Silencing staff representatives or whistleblowers prevents legitimate issues from being addressed and erodes trust in the institution,” it said. “Reputation cannot be protected by censorship — it must be earned through sound governance, transparency and open dialogue.” It sees the letter as part of a broader pattern in which the ECB has sought to restrict trade union activity and control staff representation, including planned changes to a representation framework that would limit the participation of union members in the ECB staff committee. IPSO is the sole trade union recognized by the ECB and holds seven out of the nine seats on the ECB’s staff committee, which is elected by all ECB staff. The ECB, for its part, has rejected much of the criticism emerging from survey organized by the union and the staff committee, which showed widespread distrust of leadership, surging burnout levels, and complaints about favoritism. The ECB has called the surveys methodologically flawed and unreliable.