The ECB did not cover itself in glory during the inflation surge that began in 2021. For a long time, the leadership insisted that price increases were only temporary, and refrained from raising interest rates. As a result, inflation in the eurozone climbed to its highest level since the introduction of the single currency. According to ECB Works Council Chair Carlos Bowles, some ECB economists had in fact warned that inflation would remain elevated for an extended period. However, the working environment at the central bank was so bad that they did not dare to share their assessments.

„When employees find themselves in a situation where they know that saying something their boss doesn't want to hear will damage their career, many people will not speak up“, Bowles told Börsen-Zeitung. He accuses the ECB of creating a climate of fear for many employees.

Bowles’ statements are backed up by surveys from the trade union Ipso, where he also serves as vice president. In a poll published in late April, only 34% of employees said that promotions go to those who perform well. By contrast, 77% believe that having the right connections is what matters most. According to Bowles, this can become a problem when research or forecast results don’t match what superiors want to see.

This doesn’t only affect promotions, but also job security. Many ECB employees are on fixed-term contracts. „Whether you keep your job is not connected to measurable performance. It only matters if your manager wants to keep you or not“, says Bowles. „There is therefore pressure to adapt study results and to not address problems.“ He cites a case in the ECB’s banking supervision department where an employee withdrew a study because the findings displeased the head of the unit.

The ECB firmly denies the claims. When asked by Börsen-Zeitung, a spokesperson stated that "it is regrettable that Mr Bowles is making such allegations about his colleagues’ work. He has not provided us with any evidence of such behaviour. The ECB staff’s analysis meets the highest standards of academic rigor, independence, and objectivity. It consistently delivers high quality insights that underpin our commitment to keep inflation at 2%.“

The ECB adds that internal promotions are never decided by a single supervisor. Instead, at least three people from different departments are involved. There are also often anonymous tests or external consultants involved in the process.

The ECB also notes that only 1,425 of around 5,000 staff participated in the Ipso survey. In ECB-conducted surveys with higher participation rates, a different picture emerges. For instance, 85% of respondents said they are proud to work for the ECB.

Bowles doesn’t dispute that. „Yes, people are proud to work for the ECB and are satisfied with the wages, but very dissatisfied with the autocratic management style," he said. In 2024, a survey by Ipso revealed that close to 40% of employees reported suffering from burnout. A major reason is the heavy workload, but Bowles also identifies another cause: „This is closely linked to our problem of favouritism,", he said. "Employees experience a loss of control because their performance has only limited influence, whether they make career or keep their job. This creates mental stress.“

Employee dissatisfaction is especially high regarding the ECB’s top leadership. In the latest Ipso survey, 51.9% said they had little or no trust in the ECB Executive Board. For President Christine Lagarde, the figure was even higher at 57.1%.

Bowles perceives no effort from Lagarde or other senior officials to address these issues, which is why he is now turning to the public via the media. He or other employees cannot file lawsuits with German labour courts. Though the ECB is headquartered in Frankfurt, it is legally located in a sort of „extraterritorial area“ and is not bound by national labour law. The ECB management sets its own rules.

The ECB’s extensive powers are designed to protect its political independence – vital to ensure the bank can fulfill its mandate without political pressure, especially in monetary policy and banking supervision. The value of this independence is evident today in the US, where the Fed is facing political pressure. But according to Bowles, the ECB’s extraterritorial status also creates governance problems.

He cites a new ECB initiative as an example. The central bank plans to limit how much working time Works Council members may spend on their representative duties – 50% for regular members, 75% for the Chair. Bowles sees this as a clear act of retaliation by management in response to the critical survey results.

The ECB denies that as well. It says the intention is to ensure staff representatives remain closely connected to the core work of the institution, and not serve only in representative roles. The ECB also emphasises that the plans do not include reducing the total time allocated to staff representation.