Isabel Schnabel: The importance of trust for the European Central Banks's monetary policy

Speech by Ms Isabel Schnabel, Member of the Executive Board of the European Central Bank, as part of the seminar series "Havarie Europa. Zur Pathogenese europäischer Gegenwarten" at the Hamburg Institute for Social Research (Hamburger Institut für Sozialforschung), Frankfurt am Main, 16 December 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The graphs can be found on the ECB's website.

Thank you for inviting me to join this seminar series. I am pleased to speak to you today about Europe and about the euro. The seminar series "Havarie Europa", literally translated as "shipwreck Europe", touches on a topic that all proponents of European integration are forced to deal with time and again: euro-scepticism.

Public trust in the European Union (EU) and European institutions like the European Central Bank (ECB) has suffered considerable strain in recent years due to the global financial crisis, the European sovereign debt crisis and the UK's withdrawal from the EU. At present, the coronavirus (COVID-19) pandemic is posing huge challenges for the European Economic and Monetary Union (EMU).

In these stormy conditions, the "ship Europe" has, however, not run aground. European institutions and national governments have responded rapidly and comprehensively to mitigate the economic impact of the pandemic. Europe has learned the lessons from past crises and shown that it is capable of navigating, even through turbulent waters. A "Havarie Europa" is therefore not within sight.

The progress we have made in overcoming these shared challenges should be reason for confidence. A crisis-proof and economically successful Europe provides the best arguments to counter euro-scepticism. In the long run, a high degree of public trust will ensure European institutions' capacity to act.