ECB struggling with weak public trust, paper shows

FRANKFURT (Reuters) – Public trust in the European Central Bank appears to have dropped by more than in other governing institutions over the past decade, even as confidence in the euro currency remains robust, a new ECB paper said on Monday.

Having pushed monetary policy close to its limits since the global financial crisis, the ECB has faced a barrage of criticism and legal challenges, raising questions both about policy and the way it communicates with the public.

The bank has launched a strategy review, but the exercise had to be postponed due to the coronavirus crisis – which also forced the bank to take even more radical measures.

“Compared with both EU and national institutions, trust in the ECB appears to have been disproportionately affected by the crisis, experiencing a deeper fall and a slower recovery,” the ECB paper said, referring to the decade since the global financial crisis.

As a result, trust in the ECB was lower than in the European Commission and the European Parliament, even as 76% of euro zone citizens expressed support for the euro itself.

Top sceptics included Germany and Austria, which have long criticised the ECB’s ultra easy monetary policy and where citizens now trust the national government more than the ECB.

Countries that also suffered more in the debt crisis, such as Greece and Spain, were also among the sceptics.

Although the paper suggested few potential solutions, it noted that the ECB had a communication problem.

“Making communication more accessible to people with differing levels of education and prior knowledge, and also addressing the concrete concerns of citizens in different parts of the euro area – such as the ECB’s role in economic outcomes – can enhance trust in the ECB,” it said.

It also criticised general education levels, arguing people needed to understand better what central banks do and what services they provide.