Session 3: Is “more” always “better”? Transparency, accountability and the clarity of message - Speech by Sylvie Goulard
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Goulard, Sylvie
Sylvie Goulard, Former Member of the European Parliament, discusses transparency, accountability and the clarity of message in central banks' communications.
 Thank you very much for inviting me and thank you for organizing also this conference. Well, I'm not a central banker, I'm not an economist. I would like to talk as far as I know the only person with political mandates in this room and I stopped some months ago. But I was not only in the Econ Committee of the European Parliament, I was sharing at the European Parliament a small group of MEP, called the Nantagroup, fighting against poverty. And in this group our tradition was to organize meetings of deprived people with people in charge. We invited once Benoit Curé, Mario Monti, Emmanuel Macron, so we had quite interesting experiences in reconnecting the ones taking the decisions and the poorest of the poorest. So I would like to make four remarks, because accountability matters. The first thing is that whatever you like it or not, as you said, we have reached an irreversible point. I mean people are asking for more transparency because the society is changing. It is through on trade issues, it is through on monetary issues, it is through for the political life so it will not go back. And it's not a bad thing. It is also the result of higher level of education. I've checked in France, we had 4% of the population having the baccalaureate, so the A level, habitu in the 1950s. We have now more than 50% and even 80% if you include the professional baccalaureate. So it's a huge change. People are directly interconnected and sometimes I have the feeling that we don't realize. We don't realize enough, never how much the society has changed. And here I don't want to be rude, but when I look at the public here in this room, I can tell you it has nothing to do with the public of the French tube, of the tube in Frankfurt. You have no one with migrants background, more or less. And women are very rare in the financial sector and I congratulate you for being one of the most famous. But it is very important, you just said the person who is sending the message matters. It's not just the content of the message, but and that's the reason why we made the battle in the ECB during the last mandate for closing the gender gap with the support of some people who are in this room and I appreciated it because it is something important that the citizens feel that the people in charge are not so far away from themselves that they will never understand their concerns. The third element on the evolution of the society is that we went through a crisis and a very severe one. For all of us, when we talk about change and disruption and to adapt, well, it might be to change from a very well-paid job in London for a very well-paid job in Frankfurt and this is the end of the world. Many people have lost their jobs, their savings, their pensions and sometimes even their children because when you lose your home and your job, sometimes you lose your children. So we should keep this in mind and be very humble. When we say we were successful in this or that, it might be true from a technical point of view, but don't believe that people in the street think that we were successful. We are the one who put them in the mess. And the mess for them meant that they lost everything. The second remark I wanted to do is that central banks are in a very specific position even if the whole society is changing rapidly because they are independent and this is a good thing if they realize that the other side of the coin is to be even more responsible than the ones who are directly accountable in front of parliament. The fact that you are technocrats protected by your statute, well-paid, oblige you to work in the interest of the population. It is also true for politicians, it is also true for the public sector, there is no open society in which responsibility can be not part of the role of the elite. But nevertheless, the fact that you have people designated and then keeping their job for years without being sacked is a huge responsibility. And here I must say I am very proud of what we did in Europe on a very pragmatic basis because I am quite sure that if we would have tried to define the accountability of the ECB in the master's negotiations, we would not have invented the monetary dialogue. Just for the ones who are not familiar to it, the head of the ECB, Mr. Trichet and Mr. Draghi are regularly invited at the European Parliament every three months, more or less. And this is a real important rendezvous and thanks to the press that is reporting on that, it became a place where during the crisis above all, but I hope even in the future, there is a real dialogue between the head of the ECB and the representatives of the people. Sometimes it is a little bit awkward taking into account the number of extremists we have in this parliament, but nevertheless it is useful. And as it was said before, I don't want to come back. It is also an opportunity, I remember long discussions with Mr. Trichet and Mr. Draghi. I know they see it as an occasion to listen, to get some messages, to have the direct and sometimes emotional reaction of let's say a representative of Greece during the Greek crisis or whatever. So this is something very important. On the one hand, we have to defend independence and what we observed in Italy in the last weeks show that it is not easy above all when you have not only the monetary policy responsibility, but the financial supervision of course, national parliaments as well as the European Parliament might wish to interfere. So it is a balance to strike, but nevertheless in my opinion, the fact that central banks are independent must encourage the dialogue to be of the best possible quality because it is the necessary complement to the independence. And the monetary dialogue was just invented in a report of the European Parliament. There is no legal basis in the treaty and also there is no legal basis in the treaty. The head of the ECB is repeating that he is accountable, which by the way asks also the question if for a long lasting period or forever the all members of the Eurozone are not the all members of the EU are not members of the Eurozone, then there is a question. But at least in the treaty, the parliament was seen as the parliament of the Eurozone because the euro is the currency of the union. Many people ignore it, but article three of the treaty underlines this. Why is the ECB in a very specific situation? Not only central banks in general are independent and accountable and have to deal with this contradiction, but the ECB is in a very strange situation and I must say that I am impressed by the way it was managed. It is the only central bank of a currency without a state. So it is not only independent, it is to a certain extent quite isolated. And as you perfectly know in the monetary, economic and monetary union, the monetary side is based on federal institutions and very strong powers in this house. On the economic side, we have a coordination which sometimes remained very, very loose. It means that the ECB has to interact with several governments having different situations to cope with, very, for example, different levels of unemployment. I take the floor regularly in Germany and in Italy. If you make the test in the room in Germany, how many people have a child unemployed in Baden-Württemberg? No one. They don't even know what it means. In the south of Italy, you have quite half of the room and this is a real difference. So there is convergence but there is still also some divergence in the eurozone. You also have the linguistic diversity. Mario Draghi made the point this morning. If each newspaper is talking only to its constituency, we are in trouble. We should all, the politicians, the members of the ECB, the commission, try to think cross-border. If we don't manage to think cross-border, we miss the point because we have to explain to the southern part of Europe why some of the rules are also rules accepted, ratified in the south and we have to explain in the north of Europe why some countries in the south or in the periphery have specific difficulties. Many, many people do, of course, try to create this bridge, to build this bridge but it is not easy. The third thing I wanted to stress is that you are dealing with very complex issues and if I may, we should not be surprised that populists are getting so many votes when, I can tell you on the ground, many people don't even make the difference between the institutions. Try to ask ordinary people if they really make a difference between the commission, the council, the ECB, they simply don't know. They all have euros in their pockets, they all vote when there is a referendum or an election and it is good because we believe in democracy but they are not at all on the same ground for knowledge and comprehension. That's the reason why I wanted to congratulate Christine for the quality of the new website because I remember some years ago the website of the ECB was different, quite different. We have to continue and to offer videos, we have to help the teachers, for example, to explain this, we have to give journalists that are sometimes under time pressure directly, can I say it? Thinks that they can use without too much investment from their side and the language of the markets, the language we use here has nothing to do with the language of ordinary people and they are interested. I would not say that people are not interested in these matters. Last week we were at the Journey d'économie de Lyon, the Géco in Lyon. It is one very big event in the city of Lyon where you have more than 10,000 people participating in public meetings where you have economists, central bankers, people from the private sector for public administration, commissioners, but no one was there and you have teachers coming with their classes and this is an excellent opportunity to spread some ideas. Everything is web-streamed so I know teachers using this afterwards so we really have to talk to ordinary people, not to oversimplify or change the message, but try to translate it in the proper way and we should be humble because it is difficult to explain sometimes and sometimes maybe we pretend ourselves that we understand what we are doing and maybe we are not and maybe one of the reasons of the crisis is that too many people did not dare to ask simple questions to their very sophisticated people using math and making big sophisticated products. We have also to keep in mind that sometimes in the discussion we mix the different functions of the central banks. You have the monetary policy, you have in certain central banks the financial stability, you also have for a bank like La Banque de France the very narrow monitoring of the companies and here for example you have data available and I know that this is a change in their policy that you can also provide for research and in the past I would say that secrecy on this type of data taking into account the fact that sometimes you have to aggregate for commercial reasons but I think it was a pity that the central banks had so many data and that these data were not available at a time where data are becoming more and more relevant. My last remark is on something that is a little bit more political and linked to my experience in the European Parliament. Transparency and it was said this morning by Mrs. Yellen, transparency does not mean cacophony, it does not mean that you don't have rules. Above all when you are taking decisions in collective bodies and here the cross-border element in the eurozone is something that makes all jobs in this house really difficult because you have to make sure that people of course can express themselves in the board, in the governing council and it is good for policies that all members feel free to express orthodox, non-orthodox visions but one thing is to discuss inside the room, another thing is to discuss outside and sometimes we had the feeling that the ECB managed to have a very little number of women but a lot of talkative persons inside which shows that prejudice is not always on the right side. So we really have to be aware that we have a common interest to defend, be tough in defending our points of view but respect collective decision-making process and respect some confidentiality when it has to take place and then transparency and explanation and we made the battles at MEP for the publications of Minutes. I'm not shocked if we know afterward that there is a minority position, it's part of democracy but of course it has to be done with respect for the whole and it is something that is important above all in crisis time but which is for the eurozone taking into account the cultural divergences, the cultural differences, something we have to keep in mind. My conclusion is that there is a gap between the elites and the citizens everywhere at least in the western world. Brexit is one example, Trump is another example, the IFD here, the Liga Nord in Italy, the Le Pen in France etc. So we have to be aware of that. It is a serious danger for our democracies. We should not leave the people to the populist, we should respect the most deprived, the ones suffering more than we do, we should really try to be transparent in a clever way and remain here in Europe a team and a team acting as a team and I would say that one of the most important words we have heard today was listening, listen to the people. They have common sense when they express their fears or they, you have to hear to listen and even when the European Parliament has consultative powers for example in the composition of the Board of this House, this House and the European Council should also listen a little bit more. Thank you.
 Thank you very much for inviting me and thank you for organizing also this conference.  Well, I'm not a central banker, I'm not an economist. I would like to talk  as far as I know the only person with political mandates in this room and I stopped some months ago.  But I was not only in the Econ Committee of the European Parliament, I was sharing at the  European Parliament a small group of MEP, called the Nantagroup, fighting against poverty.  And in this group our tradition was to organize meetings of deprived people with people in charge.  We invited once Benoit Curé, Mario Monti, Emmanuel Macron, so we had quite interesting  experiences in reconnecting the ones taking the decisions and the poorest of the poorest.  So I would like to make four remarks, because accountability matters.  The first thing is that whatever you like it or not, as you said, we have reached an irreversible  point. I mean people are asking for more transparency because the society is changing.  It is through on trade issues, it is through on monetary issues, it is through for the political  life so it will not go back. And it's not a bad thing. It is also the result of higher level  of education. I've checked in France, we had 4% of the population having the baccalaureate,  so the A level, habitu in the 1950s. We have now more than 50% and even 80% if you include the  professional baccalaureate. So it's a huge change. People are directly interconnected and  sometimes I have the feeling that we don't realize. We don't realize enough, never how much the  society has changed. And here I don't want to be rude, but when I look at the public here in this  room, I can tell you it has nothing to do with the public of the French tube, of the tube in  Frankfurt. You have no one with migrants background, more or less. And women are very rare in the  financial sector and I congratulate you for being one of the most famous. But it is very important,  you just said the person who is sending the message matters. It's not just the content of the  message, but and that's the reason why we made the battle in the ECB during the last mandate for  closing the gender gap with the support of some people who are in this room and I appreciated  it because it is something important that the citizens feel that the people in charge are not  so far away from themselves that they will never understand their concerns.  The third element on the evolution of the society is that we went through a crisis  and a very severe one. For all of us, when we talk about change and disruption and to adapt,  well, it might be to change from a very well-paid job in London for a very well-paid job in Frankfurt  and this is the end of the world. Many people have lost their jobs, their savings, their pensions  and sometimes even their children because when you lose your home and your job, sometimes you lose  your children. So we should keep this in mind and be very humble. When we say we were successful in  this or that, it might be true from a technical point of view, but don't believe that people in  the street think that we were successful. We are the one who put them in the mess. And the mess  for them meant that they lost everything. The second remark I wanted to do is that central banks  are in a very specific position even if the whole society is changing rapidly because they are  independent and this is a good thing if they realize that the other side of the coin is to be  even more responsible than the ones who are directly accountable in front of parliament.  The fact that you are technocrats protected by your statute, well-paid, oblige you to work in the  interest of the population. It is also true for politicians, it is also true for the public sector,  there is no open society in which responsibility can be not part of the role of the elite. But  nevertheless, the fact that you have people designated and then keeping their job for years  without being sacked is a huge responsibility. And here I must say I am very proud of what we did  in Europe on a very pragmatic basis because I am quite sure that if we would have tried to define  the accountability of the ECB in the master's negotiations, we would not have invented the  monetary dialogue. Just for the ones who are not familiar to it, the head of the ECB, Mr.  Trichet and Mr. Draghi are regularly invited at the European Parliament every three months,  more or less. And this is a real important rendezvous and thanks to the press that is reporting  on that, it became a place where during the crisis above all, but I hope even in the future,  there is a real dialogue between the head of the ECB and the representatives of the people.  Sometimes it is a little bit awkward taking into account the number of extremists we have in this  parliament, but nevertheless it is useful. And as it was said before, I don't want to come back.  It is also an opportunity, I remember long discussions with Mr. Trichet and Mr. Draghi.  I know they see it as an occasion to listen, to get some messages, to have the direct and sometimes  emotional reaction of let's say a representative of Greece during the Greek crisis or whatever.  So this is something very important. On the one hand, we have to defend independence and what we  observed in Italy in the last weeks show that it is not easy above all when you have not only the  monetary policy responsibility, but the financial supervision of course, national parliaments as  well as the European Parliament might wish to interfere. So it is a balance to strike, but  nevertheless in my opinion, the fact that central banks are independent must encourage the dialogue  to be of the best possible quality because it is the necessary complement to the  independence. And the monetary dialogue was just invented in a report of the European Parliament.  There is no legal basis in the treaty and also there is no legal basis in the treaty. The head  of the ECB is repeating that he is accountable, which by the way asks also the question if  for a long lasting period or forever the all members of the Eurozone are not the  all members of the EU are not members of the Eurozone, then there is a question. But at least  in the treaty, the parliament was seen as the parliament of the Eurozone because the euro is  the currency of the union. Many people ignore it, but article three of the treaty underlines this.  Why is the ECB in a very specific situation? Not only central banks in general are independent  and accountable and have to deal with this contradiction, but the ECB is in a very strange  situation and I must say that I am impressed by the way it was managed. It is the only central bank  of a currency without a state. So it is not only independent, it is to a certain extent quite isolated.  And as you perfectly know in the monetary, economic and monetary union, the monetary side is based on  federal institutions and very strong powers in this house. On the economic side, we have a coordination  which sometimes remained very, very loose. It means that the ECB has to interact with  several governments having different situations to cope with, very, for example, different levels of  unemployment. I take the floor regularly in Germany and in Italy. If you make the test in the room  in Germany, how many people have a child unemployed in Baden-Württemberg? No one. They don't even know  what it means. In the south of Italy, you have quite half of the room and this is a real difference. So  there is convergence but there is still also some divergence in the eurozone. You also have the  linguistic diversity. Mario Draghi made the point this morning. If each newspaper is talking only  to its constituency, we are in trouble. We should all, the politicians, the members of the ECB,  the commission, try to think cross-border. If we don't manage to think cross-border,  we miss the point because we have to explain to the southern part of Europe why some of the rules  are also rules accepted, ratified in the south and we have to explain in the north of Europe  why some countries in the south or in the periphery have specific difficulties. Many,  many people do, of course, try to create this bridge, to build this bridge but it is not easy.  The third thing I wanted to stress is that you are dealing with very complex issues and if I may,  we should not be surprised that populists are getting so many votes when, I can tell you on  the ground, many people don't even make the difference between the institutions. Try to ask  ordinary people if they really make a difference between the commission, the council, the ECB,  they simply don't know. They all have euros in their pockets, they all vote when there is a  referendum or an election and it is good because we believe in democracy but they are not at all  on the same ground for knowledge and comprehension. That's the reason why I wanted to congratulate  Christine for the quality of the new website because I remember some years ago the website of the ECB  was different, quite different. We have to continue and to offer videos, we have to help the teachers,  for example, to explain this, we have to give journalists that are sometimes under time pressure  directly, can I say it? Thinks that they can use without too much investment from their side  and the language of the markets, the language we use here has nothing to do with the language of  ordinary people and they are interested. I would not say that people are not interested in these  matters. Last week we were at the Journey d'économie de Lyon, the Géco in Lyon. It is one very big  event in the city of Lyon where you have more than 10,000 people participating in public meetings  where you have economists, central bankers, people from the private sector for public administration,  commissioners, but no one was there and you have teachers coming with their classes and this is an  excellent opportunity to spread some ideas. Everything is web-streamed so I know teachers  using this afterwards so we really have to talk to ordinary people, not to oversimplify or change  the message, but try to translate it in the proper way and we should be humble because it is difficult  to explain sometimes and sometimes maybe we pretend ourselves that we understand what we are doing  and maybe we are not and maybe one of the reasons of the crisis is that too many people did not dare  to ask simple questions to their very sophisticated people using math and making big sophisticated  products. We have also to keep in mind that sometimes in the discussion we mix the different  functions of the central banks. You have the monetary policy, you have in certain central banks  the financial stability, you also have for a bank like La Banque de France the very narrow  monitoring of the companies and here for example you have data available and I know that this is  a change in their policy that you can also provide for research and in the past I would say that  secrecy on this type of data taking into account the fact that sometimes you have to aggregate  for commercial reasons but I think it was a pity that the central banks had so many data and that  these data were not available at a time where data are becoming more and more relevant. My last  remark is on something that is a little bit more political and linked to my experience in the European  Parliament. Transparency and it was said this morning by Mrs. Yellen, transparency does not  mean cacophony, it does not mean that you don't have rules. Above all when you are taking decisions  in collective bodies and here the cross-border element in the eurozone is something that makes  all jobs in this house really difficult because you have to make sure that people of course can  express themselves in the board, in the governing council and it is good for policies that all  members feel free to express orthodox, non-orthodox visions but one thing is to discuss inside the  room, another thing is to discuss outside and sometimes we had the feeling that the ECB managed  to have a very little number of women but a lot of talkative persons inside which shows that  prejudice is not always on the right side. So we really have to be aware that we have a common  interest to defend, be tough in defending our points of view but respect collective decision-making  process and respect some confidentiality when it has to take place and then transparency and  explanation and we made the battles at MEP for the publications of Minutes. I'm not shocked if we  know afterward that there is a minority position, it's part of democracy but of course it has to  be done with respect for the whole and it is something that is important above all in crisis  time but which is for the eurozone taking into account the cultural divergences, the cultural  differences, something we have to keep in mind. My conclusion is that there is a gap between the  elites and the citizens everywhere at least in the western world. Brexit is one example,  Trump is another example, the IFD here, the Liga Nord in Italy, the Le Pen in France etc.  So we have to be aware of that. It is a serious danger for our democracies. We should not leave  the people to the populist, we should respect the most deprived, the ones suffering more than we do,  we should really try to be transparent in a clever way and remain here in Europe  a team and a team acting as a team and I would say that one of the most important words we have  heard today was listening, listen to the people. They have common sense when they express their  fears or they, you have to hear to listen and even when the European Parliament has  consultative powers for example in the composition of the Board of this House,  this House and the European Council should also listen a little bit more. Thank you.
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