The European Central Bank’s updated monetary policy strategy fails to deliver the change Europe’s workers need. Instead of innovating, the ECB’s strategy reiterates its reliance on interest rate tools.
By continuing to frame wage-setting as a main lever for limiting inflation, the ECB is sending the wrong signal to employers and governments: keep wages down. This discourages collective bargaining, weakens workers’ negotiating power, and fuels a race to the bottom on pay.
Meanwhile, recent inflation has been driven by record corporate profits and energy price hikes. Instead of offering solutions to these real problems and recognising wage growth as a driver of healthy demand and social stability, the ECB’s strategy threatens to continue treating wage increases as a risk to be contained.
ETUC Confederal Secretary Ludovic Voet said:
“We need a monetary policy that supports, not suppresses, wage growth, public investment, and the green transition. The ECB’s credibility won’t be restored by repeating the mistakes of the past. It must rebuild trust by enabling long-term prosperity: decent jobs, fair wages, and a resilient, low-carbon economy. This requires a shift from short-term fixes to coordinated, forward-looking policies across all institutions, not just the ECB hiking rates.”
“Europe’s workers didn’t cause this inflation, corporate profiteering and global shocks did. Yet workers are once again made to pay the price, while the real drivers go unchallenged. Monetary policy cannot treat all inflation the same. Blunt rate hikes deepen inequality and stall investment when targeted responses are needed. We demand a new approach: one where the cause of inflation determines the cure, and where the entire economic architecture, not just the central bank, works in the public interest.”
