In a recent interview with the Financial Times, Christine Lagarde, President of the European Central Bank (ECB), asserts her determination to green the institution's monetary policy. These ambitions are not called into question by the health and economic crisis.
Greening operations
"I want to explore all possible avenues to combat climate change," said the ECB President in an interview with the Financial Times. She said she was convinced that "climate change has an impact on price stability"..
"If we don't measure the repercussions, if we don't anticipate drought, if we don't anticipate variations in the prices of food, energy, services, then we're not doing our job," asserted Christine Lagarde.
According to her, this commitment must apply to "all the business sectors and operations in which we are engaged to combat climate change. Because at the end of the day, money talks."
According to analysts, the commitment to greening the ECB's actions could involve stimulus packages conditional on environmental targets. The ECB's €2,800 billion asset repurchase program, underway since 2015 to support the economy, would also be affected.
Limited room for manoeuvre
While Christine Lagarde's intentions seem clear, she may well come up against the limits of the ECB's mandate, which is normally confined to maintaining monetary stability.
Thus, removing from its balance sheet bonds issued by groups that pollute too much would currently run counter to the neutrality required by the European Treaty, which obliges central banks to reflect the composition of all securities available on the market.
According to Xavier Timbeau, Director of the Observatoire français des conjonctures économiques (OFCE): "The asset purchase rules that have been laid down are not going to be changed in the short term. The ECB's instruments and objectives are essentially monetary and technical [...] the environmental issue does not come into play".
For him, environmental issues are first and foremost political, and the independent institution that is the Central Bank cannot intervene in this field as things stand.
However, the ECB already holds green issues, on the basis of a green label. New rules could therefore well see the light of day, although this will have to wait until the end of the ECB's strategic review, scheduled for the last quarter of 2021.