ECB employees can go on strike

The European Central Bank (ECB) offered its staff a salary well below eurozone inflation. After the union rejected this offer, staff began discussing protest actions and the option to strike.

If a strike decision is made, it will be the second strike in the bank’s history. Previously, the employees had gone on strike due to the social security regulation in 2009.

In addition, the coordination of the issuance of money for the euro is in the ECB, while the task of issuing money falls on the national central banks.

WHY DID THE ECB RECOMMEND LOW HIRING?

The ECB proposed raising wages by 4.07 percent in January. Eurozone inflation was 10 percent in November. The ECB has long taken a stand against deals that index wages to inflation. The bank is of the opinion that an increase in wages at the rate of inflation will fuel the spiral of wages and prices.

According to proponents of the ‘wage-price spiral’ perspective, rising inflation causes wages to rise. The increase in wages causes prices to rise again. Thus, the economy enters an inflation cycle.

The ECB is one of the staunchest defenders of this idea and believes that wage increases should be below inflation. The bank made very low staff increases in 2022, but the ECB’s latest offer is less than half annual euro zone inflation. This means that the staff is exposed to a serious salary cut.

UNION REACTION

According to the Financial Times report, Carlos Bowles, vice-president of the Ipso union, which represents ECB staff, said:

“People are losing faith in this institution. This is what the ECB management told us; “We’re sorry we missed our inflation target and now you’re going to pay for it.”
The ECB’s position is highly problematic and undermines the bargaining power of workers. It also plays a role in increasing inequality.”

A recent union survey also revealed that the vast majority of workers were “angry” about the ECB’s wage offer. “The salary consultation will end at the end of the year and we will decide in January whether to protest or not,” the union said.

The union also met with the head of the ECB, Christine Lagarde, a few weeks ago. Lagarde made it clear that there was no room for negotiation at the meeting.

REMOTE WORK AGREEMENT

The ECB said it recently agreed a new policy for staff to work remotely for up to 110 days a year, after long deliberation. The agreement, which will be reviewed two years later, allows ECB staff to work remotely for up to 10 days a month.

In November, Eurozone inflation fell to 10 percent for the first time in 17 months. However, this rate is still five times higher than the ECB’s target. Wages across Europe have not been able to keep up with inflation this year.