For decades, Europe’s workers have been told to trust in the neutrality of central banks. We were assured that the European Central Bank’s (ECB) sole commitment to price stability was a technocratic imperative – untouched by politics, unshaped by ideology. However, the ECB’s newly released 2025 Strategic Review confirms what trade unions have long warned: this neutrality is a myth, and the Bank’s policies continue to tilt the economic playing field in favour of capital and against labour.
The Review was a critical opportunity for the ECB to course-correct. Instead, it largely reaffirms a framework that has already failed Europe’s working people. The ECB’s response to the inflation shock of 2022–2023, which was rooted in outdated assumptions about wage-driven inflation, ignored the real culprits: fragile supply chains, fossil fuel dependency, and unchecked corporate pricing power. Rather than adapting, the ECB doubled down on its old reflex: raising interest rates. The consequences have been severe, pushing households to the brink, straining public services, and delaying vital investment in the green and digital transitions.
The Strategic Review does little to challenge the harmful mythology inherited from the 1970s: that inflation is fundamentally a wage problem. This narrative has been thoroughly debunked. Wages have consistently lagged behind inflation, and workers have borne the brunt of the crisis. Yet, the ECB continues to treat collective bargaining as a threat rather than a stabilising force. In doing so, it undermines one of Europe’s greatest economic assets: coordinated wage-setting that supports both fairness and resilience.
In one of the research papers published alongside the review, the ECB states:
“The risk of wage price spirals in the recent inflation surge was contained by a solid anchoring of inflation expectations combined with an only limited role of wage indexation… This institutional feature [wage indexation] was substantially reduced after the experience of wage price spirals from a full and automatic indexation for more than 50 percent of the private sector employees in the 1970s to a negligible feature by the introduction of the euro… Unions have voiced demands to strengthen the indexation of wages to inflation in some euro area countries, but so far this has not led to any substantial institutional change in the wage setting process.”
In other words, the ECB celebrates the weakened bargaining power of workers as a positive structural development, making the Eurozone less susceptible to wage-price spirals. Even setting aside the dubious theoretical and empirical evidence for wage-price spirals, this is clearly a one-sided model of inflation control that forces workers to bear the brunt of economy-wide inflation by accepting real decreases to their purchasing power. Such language from the ECB risks encouraging governments to further erode the collective bargaining power of workers. Conversely, a coordinated whole-of-government approach to inflation, with a more flexible targeting framework, could maintain price stability more successfully without imposing disproportionate welfare losses on workers.
This is not just a missed opportunity; it is a political choice. The ECB’s mandate, as enshrined in Article 127 of the Treaty on the Functioning of the EU, obliges it to support the Union’s broader objectives: full employment, social progress, and environmental sustainability. These are not optional extras; they are essential conditions for real, lasting stability.
The Review’s failure to fully integrate these priorities into its core framework is deeply disappointing. While it gestures towards climate risks and inequality, it stops short of embedding them into a new analytical pillar or aligning monetary operations with the EU’s fiscal and industrial strategies. The ECB has chosen caution over courage – orthodoxy over innovation.
Europe’s trade unions are clear: we will not accept more sacrifices from those who have already given too much. We call for a genuine shift in monetary policy – one that empowers, not weakens, collective bargaining. One that recognises structural risks like climate shocks and corporate greed. One that supports, rather than stifles, the just transition and quality job creation.
The ECB’s credibility will not be restored by repeating the mistakes of the past. It will be earned by protecting Europe’s future: a fairer economy, built on decent work, sustainable investment, and shared prosperity. The Strategic Review may be published, but the debate is far from over. Workers demand not neutrality, but justice; not fear of inflation, but bold, coordinated policies that serve the people – not just the markets.
Ludovic Voet was elected confederal secretary of the European Trade Union Confederation in 2019.
