the ceremonial at the Japanese imperial court is a simple matter compared to the communication rituals of central banks. For the currency watchdogs, it is a matter of gradually adapting their own formulations to new developments so that the players on the financial markets can ideally always foresee what the central banks are planning next.
The head of the European Central Bank (ECB), Christine Lagarde, who once studied law, apparently does not master this monetary policy waggle dance flawlessly even after two years in office. This became apparent last Thursday when Lagarde, during a live performance, felt what he felt was a contradiction to the Governing Council’s decision that had just been published in writing.
“Again and again she referred to the next meeting in March, as if important decisions should simply be postponed due to the Council’s lack of willingness to compromise,” write the ECB Watchers of the Handelsblatt, Jan Mallien and Frank Wiebe. “It was only in the course of the press conference that Lagarde admitted, after many inquiries, that there could probably be a clear shift towards a tougher monetary policy in March and that interest rate hikes this year can no longer be ruled out.”
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(Photo: laif (2), Marc-Steffen Unger, REUTERS, Bloomberg)
Mallien and Wiebe took the unsuccessful appearance as an opportunity to fundamentally question Lagarde’s performance at the head of the ECB – and met with many skeptics. About Erik Nielsen, chief economic adviser to the major Italian bank Unicredit. He says: “With Lagarde, we don’t really know where she stands.” This is possibly the worst judgment that the financial industry can make about the chief executive of a central bank.
The main drivers of inflation, which are now also causing concern for the ECB, are high energy costs. The prices we are currently seeing for oil and gas are only a part of what warm homes and car traffic actually cost us.
In 2019, the federal government spent 1.9 billion euros on promoting energy-efficient building refurbishment. A year later it was already 8.6 billion euros, and last year it was 18 billion euros. That means an increase by a factor of nine within two years.
A lot of money is not only being distributed in the building sector. The environmental bonus, which encourages the switch from combustion engines to electric cars and ecologically dubious hybrid vehicles, had a funding volume of 98 million euros in 2019. In 2021 it was already three billion euros – in between there is a factor of 30, as researched by Handelsblatt energy reporter Klaus Stratmann. An end to the increase is not in sight.
All this serves a good purpose – the energy transition – but the efficiency of the funding falls by the wayside. Now business wise man Veronika Grimm is sounding the alarm in the Handelsblatt newspaper: “Programs are being set up that can produce unbelievable deadweight effects. This is how the energy transition is hitting the wall.”
Instead of building on a “small-scale, difficult-to-understand funding framework”, the economist recommends: “However, one should rely much more heavily on this instrument and establish an ambitiously increasing CO2 price as a leading instrument. The effects are systematically underestimated.”
In other words: In the energy transition, the Federal Republic must dare more market.
With the sluggishness of a Kashubian kolkhoz tractor, the West’s crisis diplomacy in Ukraine has gradually picked up speed. First nothing happened for weeks, and then yesterday Chancellor Olaf Scholz was with Joe Biden in the White House, French President Emmanuel Macron with Vladimir Putin in Moscow, Foreign Minister Annalena Baerbock with the Ukrainian government in Kiev.
Today Macron is in Kiev again, traveling from there to Berlin, where he meets Scholz, who will have returned from Washington by then. A level of activity commensurate with the gravity of the situation – many wars break out because the adversaries misinterpret the intentions of their allies and opponents. Every personal encounter can help.
And in terms of content? Putin describes the talks with Macron in Moscow as useful. Some of Macron’s ideas could be the basis for further joint steps.
Biden said in the White House on Monday that in the event of a Russian invasion of Ukraine “there will be no more Nord Stream 2. We will put an end to this.”
Scholz, on the other hand, managed not to mention the controversial German-Russian pipeline during the press conference. Only this much from the chancellor: possible sanctions in the event of a Russian invasion of Ukraine had been prepared intensively. It is part of not disclosing all plans to Moscow in advance. White House press secretary Jen Psaki dodged questions from journalists about whether the federal government had promised the White House an off-pipeline.
Okay, not every pass between Biden and Scholz works perfectly, but just imagine the West having to get through the current crisis with Donald Trump in the White House.
Peter Thiel is probably one of those people who would like the Republican ex-president to be back in the White House as soon as possible. The Bloomberg news agency reported in the evening that the tech investor would resign from his position on the board of the Meta Group (Facebook) in May.
The reason, according to Bloomberg: Thiel wants to campaign even more politically for the Trump camp, but the meta mandate should not slow him down.
And then there is the “high pullitik” that moved the republic yesterday as much as the Ukraine crisis. Photos from the Luftwaffe Airbus on the way to Washington had previously appeared, in which Scholz spoke to the journalists in the back of the cabin in a T-shirt and sweater. And immediately the question arose: Is this habit appropriate to the dignity of the office and the occasion?
In fact, Scholz went to a fashionable high-risk area without need. There’s nothing that makes a grown man honk himself quite like choosing the wrong sweater – I’ll just say: reindeer.
In this specific case, however, the chancellor has mastered what is perhaps the most surprising challenge of his still young term in office: elegant grey, elegant knitwear – flawless, right? Unfortunately, there is no reference to the source of supply on the website of the Chancellery.
I wish you a winter’s day that offers you more than just noble grey.
Her
Christian Rickens
Editor-in-Chief Handelsblatt
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