The interview was conducted by Frank Heine. 

Dr Nagel, you were guest of honour at the 44th “Goslarsches Pancket” on 20 March. What were you expecting from the evening? And what message did you bring for the people of Goslar?

Let me begin by saying what a great honour and a privilege it was to speak at the 44th “Goslarsches Pancket”. For me, this was an excellent opportunity for open dialogue across the worlds of business and finance and broader society. That dialogue is more important than ever right now, given the significant uncertainty caused by the war in the Middle East. For us, the war is a source of additional uncertainty and many challenges. Nevertheless, I came to Goslar this evening with a clear message: Germany’s economic substance and its pool of talent and entrepreneurial spirit are immense. These are qualities we can build on. By pulling together in Europe, we can make the most of opportunities and thus emerge stronger from this difficult spell.

We cannot rely on transatlantic cooperation and the rules-based international order to the same extent as before. That is a line from your speech at the New Year’s Reception of the American Chamber of Commerce in Frankfurt in mid-February. You were speaking about a new geopolitical reality. That was before US President Donald Trump ordered the attacks on Iran. What’s your view on the geopolitical situation and its implications? How did the ECB Governing Council assess this at its latest meeting?

The global situation is serious. Peace and reliability have become scarce. The war in the Middle East is also having an effect on us. Anyone having to fill up their car, say, will have noticed that by now. Energy prices have soared in recent weeks. It is the task of my colleagues on the ECB Governing Council and myself to keep euro area prices stable over the medium term. On Thursday’s meeting of the Governing Council, we decided to keep the key interest rates unchanged for the time being. We are, however, keeping a very close eye on how the conflict in the Middle East is affecting us. We will act decisively if that’s necessary.

For decades, the Bundesbank was regarded as a particularly strict guardian of price stability. Critics claim it has fallen into line too often with the European Central Bank’s monetary policy. How would you respond to that criticism?

The Bundesbank today is as firmly committed as it ever was to its role as a guardian of price stability. Nothing has changed in that respect whatsoever. On the ECB Governing Council, we analyse together, we discuss together, and we decide together on monetary policy in the euro area. In my view, it is helpful and worthwhile for the Governing Council to speak as one in public. That’s a principle I have held dear since taking office in 2022. I think this matters because it produces monetary policy that is more forceful and better placed to achieve its objective of price stability.

You’re said to be a strong supporter of the digital euro. Why is that, and what are you looking to achieve?

We’re seeing it all around us: the world is becoming ever more digital. At the same time, Europe is noticing that it needs to stand together and be resilient to geopolitical conflicts. So if we also get a way to pay digitally in Europe with a means of payment that is reliable and independent of non-European providers, that’s the right thing to do on two counts. The digital euro is like cash, only in digital form. With the digital euro, you will get a digital wallet you can use anywhere in Europe – whether to shop in stores, order online or send money to friends. And the digital euro will make sure Europe becomes more independent of payment service providers from outside Europe. In short, the digital euro will make our payments easier, safer and more modern, while also strengthening and better preparing Europe for the digital future. But don’t get me wrong: the digital euro isn’t going to replace cash, but will complement it as an additional payment option.

Turning to your institution, the Bundesbank recently reported losses for the second consecutive year. The loss for 2025 came to €8.6 billion. How long can the Bundesbank bear burdens like that without jeopardising its monetary policy credibility or its ability to act? 

Let me be quite clear here: the Bundesbank’s balance sheet is sound. The Bundesbank holds considerable assets that far exceed its current and future obligations. Take a look at our net equity, which amounted to €363 billion at the end of last year. Bearing this in mind, there’s no need to worry the Bundesbank might not be able to fulfil its tasks. The financial burdens will pass over the next few years. After that, we will start generating a profit again. That means we will scale back our accumulated losses and build up our risk provisions again under our own power. The current state of the Bundesbank’s balance sheet is not impairing its monetary policy credibility or its ability to act. Just to give you some context here: The Bundesbank’s current financial burdens date back to the period before and during the pandemic. Back then, Eurosystem central banks were using monetary policy purchase programmes to fulfil their mandate in times when inflation rates were very low.

If the Bundesbank is unable to distribute any further profits to the Federal Government, will taxpayers have to get used to generally being asked to pay up more and more in future because a safety buffer that was once there has now gone?

The Bundesbank’s task is not to generate a profit, but to discharge its mandate to safeguard price stability. That’s what monetary policy is there for.

One brief final question: should Germany rush to relocate its gold reserves from the United States to Germany? Just to be on the safe side ...

The Bundesbank has been storing some of its gold reserves with the US Fed in New York City for decades. We have enjoyed a very good, trusting relationship with that institution from the very outset. To date, there has never once been a situation where we have been unable to access or dispose over the gold reserves. I am not calling into question the trust that has been shown in the Fed so far. There is no reason for that whatsoever.

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