Schnabel's Departure Marks End of Era at ECB

Isabelle Schnabel's departure from the European Central Bank (ECB) marks the end of her seven-year effort to reconcile Germany's traditional monetary conservatism with the ECB's role in crisis management. The institution was founded and is headquartered in Frankfurt, a city where Schnabel's influence has been felt.

Schnabel shared the German aversion to high inflation, and one of her first actions as an ECB policymaker was to raise interest rates in 2022 after Russia's invasion of Ukraine led to a long-lasting price rise. However, unlike her predecessors Jürgen Stark and Sabine Lautenschleger, Schnabel did not clash with the ECB over monetary orthodoxy.

Instead, she became one of the leading advocates of crisis-fighting instruments, including bond purchases, which are necessary to prevent financial fragmentation and protect the common currency. Her stance recalled the promise made by then-ECB President Mario Draghi a decade earlier to do 'whatever it takes' to save the euro.

While Schnabel's tenure was marked by an effort to bring Germany closer to the ECB's way of thinking, not everyone believes this was beneficial for Germany. Robin Brooks, a senior fellow at the Brookings Institution, argues that Berlin chose the 'wrong Germans' by appointing Schnabel and Joachim Nagel to the ECB.