Great discussion with the Bundesbank

Europe’s central banks are opening up a dialogue with savers. Above all, the low interest rates, old-age provision and rising housing costs are discussed.

Bundesbank President Jens Weidmann at a banking congress

TThere weren’t any halls full of open-minded or even angry citizens. Instead, the central event of the announced Citizens’ Dialogue for the realignment of the European Central Bank in Germany took place as an online conference on Friday, owing of course to Corona. Under the title “Your Bundesbank is listening”, Bundesbank President Jens Weidmann discussed criticism and wishes regarding monetary policy with representatives from various associations.

The association representatives mentioned the low interest rates for savings, which would have been mentioned more often in a gym full of randomly selected citizens. This is a topic that some of its members are concerned with, even if they, the association representatives, of course have deeper insights into the necessities of monetary policy.

Nonetheless, it is also an issue among union members, reported Wilfried Kurtzke from IG Metall, as well as the question of how one should make provision for old age under these circumstances. Even freelancers, who are not always as wealthy as many believed, were worried about how to generate enough income on their capital for old-age provision in order to at least compensate for inflation, said Hartmut Kilger from the Association of Professional Pension Funds.

Constant concern about inflation

In any case, the concerns of the trade unions are more deflation than inflation, said Stefan Körzell from the DGB. However, unpredictable fluctuations in the inflation rate are also difficult for wage policy, said Beate Scheidt from IG Metall. Reiner Holznagel from the Taxpayers’ Association pointed out that one must also show consideration for older citizens in Germany who were afraid of inflation because of the hyperinflation of the 1920s; even if the inflation rate does not give any reason to do so at the moment.

Opinions differed on the question of whether the central bank should also take climate change into greater account in its monetary policy. Mauricio Vargas from Greenpeace pleaded for it – Alexander Barthel from the Central Association of German Crafts, on the other hand, railed: “Monetary policy must remain monetary policy.”

Bundesbank President Jens Weidmann wanted to know what the association representatives thought of including owner-occupied residential property in future inflation measurements at the European level. While many thought that was a good thing, including Kai Warnecke from Haus und Grund, some union representatives had a different proposal: it would be better to weight the sharp rents in the shopping cart higher in future.