Here, there and everywhere with ECB’s Nowotny

February 6, 2009

Austria’s Ewald Nowotny is a very busy man. Apart from running the Austrian Central Bank and sitting on the board of the European Central Bank, he has given at least 32 interviews since taking office last September, to publications as diverse as Japan’s Nikkei newspaper and Austrian alternative weekly Falter as well as the usual financial papers.

And his fondness to talk at length on ECB rate policy, the euro, emerging Europe, recession, inflation, deflation, growth forecasts and bank rescues has in turn set tongues wagging. He’s even done an internet chat with readers of Austria’s Der Standard.

“Ewald Nowotny is almost omnipresent. Barely a day goes by without (him) popping up in one of Austria’s publications airing statements about the current economic situation,” German
financial daily Handelsblatt wrote in a recent article, which only appears in its paper version.

There are some good reasons why Nowotny is omnipresent.

He came to office two weeks before the collapse of Lehman Brothers, the height of the financial crisis. After nearly every bit of gloomy economic news, whether European or Austrian, he is there to reassure in his careful but direct style.

“In times of crisis he wants to get his message across and concerns himself with improving public sentiment,” Handelsblatt wrote. “For Nowotny, economics is also psychology.”

He has been cited on nearly 50 separate occasions by Reuters since Septmber 1. In the same period fellow board members Guy Quaden (Belgium) and Vitor Constancio (Portugal) have been cited  11 times each and given only a handful of interviews between them.

Nowotny tends to talk in a free and general style, according to Gilles Moec from Bank of America, and his comments should be taken as an informed opinion on the state of the economy rather than clues as to future ECB action.

“He’s a central banker but he gives his opinion on what he thinks the economy IS and not really about where interest rates should go.  From this point of view, he is very interesting — he gives an overview.”

Nowotny’s Kenysian slant also means he is slightly apart from the other ECB council members while his belief that it is now more up to fiscal, rather than monetary policy to escape the crisis, is also unusual.

“It’s a very clear-cut approach. He is the only (board member) to my knowledge who tackles this policy-mix issue in a straight-forward manner,” Moec said.

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