The European Central Bank’s staff union is taking the bank to court, accusing ECB management of trying to silence and intimidate its representatives in violation of the principles of European democracy.

The case, lodged with the European Court of Justice on Oct. 13, marks the latest escalation in a battle between union representatives and management, where relations have deteriorated since Christine Lagarde took over as ECB president in 2019.

The action contests a series of letters the bank addressed to the International and European Public Services Organization (IPSO) union and one of its senior representatives “restricting staff and union representatives from speaking publicly about workplace concerns, such as favoritism and the ‘culture of fear’ at the ECB,” the union said in a statement.

These letters constitute “an unlawful interference” with basic freedoms guaranteed by the EU Charter of Fundamental Rights and the European Convention on Human Rights, the union said. “Freedom of expression and association are not privileges; they are the foundation of the European project.”

An ECB spokesperson said the bank does not comment on court cases, but that it “is firmly committed to the freedom of expression and the rule of law, operating within a clear employment framework that is closely aligned with EU Staff Regulations and is subject to European Court of Justice scrutiny.”

The first letter, signed by the ECB’s Chief Services Officer Myriam Moufakkir, came in response to an interview given by union spokesperson Carlos Bowles to Germany’s Boersen-Zeitung daily paper, published May 7. In it, Bowles had warned that a culture of fear may contribute to self-censorship, groupthink and poor policy decisions.

The interview came at a time when the ECB’s failure to anticipate the worst bout of inflation in half a century had provoked widespread and public soul-searching by policymakers. It also followed a union survey in which around two-thirds of respondents said being in the good graces of powerful figures was the key to career advancement at the ECB, rather than job performance.  

IPSO is a four-letter word

According to the IPSO union, Moufakkir responded with a letter stressing that staff and union representatives must not make public claims of a “culture of fear” within the institution or its possible effects on ECB operations — including its forecasting work, which had come under especially intense scrutiny. It also accused Bowles of breaching his duty of loyalty under the ECB’s internal code of conduct, and instructed him to refrain from public statements that could “damage the ECB’s reputation.”

A later letter by Moufakkir, addressed to IPSO dated Aug. 1 and seen by POLITICO, spells out the thinking. In it she stresses that the right of “staff representatives … to address the media without prior approval … applies exclusively to ‘matters falling within their mandate’. It does not apply to the ECB’s conduct of monetary policy, including its response to inflation.”

In his interview, Bowles made no reference to current or future policy but rather to a work environment that he said fostered groupthink. Lagarde herself had warned against such risks, denouncing economists the previous year in Davos as a “tribal clique” and arguing that a diversity of views leads to better outcomes.

Bowles had made similar statements to the media before, such as in an interview with the Handelsblatt daily paper published in January 2016, without eliciting any reaction from the bank’s management.

Contacted by POLITICO for this story, the ECB said it had “stringent measures to ensure analytical work meets the highest standards of academic rigor and objectivity, which are essential to the ECB’s mandate of price stability and banking supervision.”

Moufakkir suggested that Bowles’ comments undermine trust in the ECB and that this trust is crucial if the ECB is to deliver on its mandate. “Freedom of expression, which constitutes a fundamental right, does not override the duty of loyalty to which all ECB staff are bound,” she argued.

Bowles rejected that framing, arguing in a letter to Moufakkir that he had a “professional obligation” to address such issues and their impact on the ECB’s capacity to fulfil its mission.

Paper trail

The trouble, according to the union, is that Moufakkir addressed the first two letters to an individual union representative (Bowles) who was speaking on its behalf, effectively undermining the union’s collective voice.  In her email, the union said, Moufakkir also “heavily misrepresented” Bowles’s comments and accused him of misconduct without affording him a hearing.

In her letter from Aug. 1, Moufakkir maintained that her original letter to Bowles “was not a formal decision” to be recorded in his personal file, but rather a “reminder and clarification of applicable rules.”

 “Its purpose was not to intimidate or silence Mr Bowles but to highlight to him the importance of prudence and external communications about ECB matters,” she wrote.

The union said it sees this framing as an effort by the ECB to shield itself from judicial review: the letter addressed to Bowles was marked ECB-CONFIDENTIAL and Personal, conveying the impression of an official document.

According to a person familiar with the matter, a special appeal launched by Bowles to the executive board to retract Moufakkir’s instruction has since been dismissed — without addressing its substance — because the letters had no binding legal effect and were therefore inadmissible. That has now prompted the union to turn to the ECJ; a response to a second appeal by Bowles remains outstanding.

The union said that what it perceived as attempts by the ECB to silence union representatives have succeeded: Previously scheduled media interviews have been “cancelled due to fear of retaliation.” When contacted for comment, Bowles declined, citing the same reason.

What comes next?

The ECB will have two months to submit its defense to the court.

As an EU institution, the ECB is neither subject to German labor laws nor to similar rules in other EU member states and instead enjoys extensive scope to set and interpret its own rules. Out of 91 employment-related court cases since the bank’s inception, the ECB has won 71.

Regardless of the legal implications, the union warned that the ECB’s approach undermines its institutional integrity and damages its credibility. 

“Silencing staff representatives or whistleblowers prevents legitimate issues from being addressed and erodes trust in the institution,” it said. “Reputation cannot be protected by censorship — it must be earned through sound governance, transparency and open dialogue.”

It sees the letter as part of a broader pattern in which the ECB has sought to restrict trade union activity and control staff representation, including planned changes to a representation framework that would limit the participation of union members in the ECB staff committee. IPSO is the sole trade union recognized by the ECB and holds seven out of the nine seats on the ECB’s staff committee, which is elected by all ECB staff.

The ECB, for its part, has rejected much of the criticism emerging from survey organized by the union and the staff committee, which showed widespread distrust of leadership, surging burnout levels, and complaints about favoritism. The ECB has called the surveys methodologically flawed and unreliable.