ECB Communications Director Christine Graeff and ECB President Mario Draghi attend a press conference in Washington, D.C. | Pete Marovich/EPA ECB’s (non)communication strategy keeps investors in the dark Limiting debate is an approach ECB Communications Director Christine Graeff shares with her boss, Mario Draghi.

FRANKFURT — A group of German journalists watched in disbelief as Christine Graeff rushed to the microphone.

“This will close the press conference,” said Graeff, the European Central Bank’s communications director, as its president, Mario Draghi, readied to leave. “Thank you very much.”

It was March, when rising price pressures across the eurozone would have guaranteed some critical questions from the inflation-obsessed Germans. But not one of those German reporters got to ask a question.

Whether deliberate or an oversight, the abrupt ending was seen by many in attendance as typical for Graeff. Since starting in 2013, the 44-year-old daughter of German and French parents has deployed a tight-fisted control of information.

“Of course, they denied that [freezing out the Germans] was intentional,” said one journalist who didn’t get an opportunity to ask a question. “That is not very convincing. And if it was, it is amazingly incompetent.” Even people working for the bank were surprised by the move, the journalist added.

“The ECB seems to have given up trying to reach the general public" -- Holger Steltzner

Journalists covering the ECB were reluctant to speak on the record about its communication strategy, fearing that doing so would make it more difficult to secure important interviews or information.

The European Central Bank declined to comment for this article.

It was not only this press conference that left questions unanswered. While press conferences traditionally last an hour, Graeff ended every single one of them this year earlier than that. For those who don’t get a question in, the chance to make up for it elsewhere is close to zero. Draghi gave not a single sit-down interview this year, and he rarely speaks to journalists on the sidelines of conferences or elsewhere.

“The ECB seems to have given up trying to reach the general public,” said Holger Steltzner, publisher of Frankfurter Allgemeine Zeitung, one of Germany’s leading broadsheets.

Wink-wink

Under Graeff, the bank’s communication’s department has done much to propel itself into the 21st century, giving ECB watchers a better chance to understand its decisions by publishing minutes of policy meetings and executive board members' diaries about three months after the fact. Graeff and her team have also organized more background briefings, at which officials have the chance to explain their thinking freely to journalists, without every word being reported.

Graeff's approach to minutes diverges from the past, when journalists tracking the ECB watched with envy their colleagues in the United States, where the Federal Reserve has for years published minutes of policy discussions. However, fewer follow-up questions are now allowed at press conferences.

Like Draghi, Graeff spends little time in the ECB office in Frankfurt, making it hard for ECB-watchers seeking guidance to get a hold of her, a number of journalists confirmed. While Draghi is more of a lone intellectual limiting his contacts to a tight-knit group of trusted advisers, Graeff maintains a busy schedule traveling and networking.

When she is in town, she does all the charming that Draghi may not get around to. Graeff — who once wrote a European guide to corporate kissing — winks at nearly everyone she meets, a signature gesture that has taken aback many a colleague at the conservative ECB.

But when it comes to exposing Draghi to questions from the media, Graeff is suddenly far more reserved.

Shortly after she started at the ECB in 2013, fresh from the communications consultancy Brunswick, Graeff asked some reporters to submit questions ahead of the regular monetary policy press conference, said two veteran journalists covering the ECB at the time. Though the journalists refused to play ball, it has left them wary of attempts to control the public debate.

Journalists seen as critical of the ECB complain about having a particularly hard time getting access. Frankfurter Allgemeine Zeitung, for instance said their main ECB-watcher has not had any invitations to key ECB background briefings. The ECB declined to comment on which, if any, mechanisms it has in place to ensure equal access of key media covering the ECB.

‘Whatever it takes’

Limiting provocative debate is an approach Graeff shares with her boss. According to officials at the bank, Draghi has little time for open discussion.

“Draghi prefers to have one-on-one meetings, keeping others in the dark of what has been discussed,” one central bank official said, describing his strategy as a soft form of divide and conquer.

Internally, where Draghi has described his secretive style as an attempt to prevent the bank’s frequent leaks, the bank president’s go-it-alone attitude draws both admiration and scorn.

The Italian will forever be admired for his “whatever it takes” speech, a communication miracle widely credited with shoring up the eurozone in the dark days of the debt crisis in 2012. Those three magic words came as a complete surprise to his colleagues on the bank’s governing council, but they quickly rallied behind them, helping Draghi provide a defensive shield for members of the eurozone under speculative attacks.

Three years and €2 trillion later, the national governors are no better informed about Draghi's thoughts about the best policy course ahead.

Draghi made a similar move when he addressed the U.S. Federal Reserve’s annual economic policy symposium in Jackson Hole, Wyoming, in 2014. Just before he took the podium, Draghi scribbled in a reference in his speech to a set of economic statistics that indicated inflation across the eurozone was headed for a lasting decline. The remark put the ECB on track for a large-scale asset purchase program that started six months later.

This time around, not all policymakers were enthused. “Mario is more secretive … and less collegial,” one ECB insider complained to Reuters at the time. “The national governors [of the eurozone’s central banks] sometimes feel kept in the dark, out of the loop.”

Three years and €2 trillion later, the national governors are no better informed about Draghi's thoughts about the best policy course ahead. “The exit [from ultra accommodative monetary policy measures] has not been on the meeting agendas, and we have not talked about it,” an official from a national central bank told POLITICO.

It wasn't just investors but also fellow policymakers who were spooked when Draghi used the ECB’s annual flagship conference in Sintra, Portugal, to shift his rhetoric, sparking expectations that the ECB would soon adjust it policies.

This time, the markets did not quite react the way Draghi wanted as they perceived the message as much more hawkish than he intended, and ECB Vice President Vitor Constancio stepped in the next day, trying to explain to markets what his boss really meant.

Step-by-Step

Draghi’s penchant for surprise might have been an asset when he was battling low inflation and trying to keep the eurozone from falling apart — especially if the alternative was weeks of delay as he sought consensus on the council as the situation threatened to spiral out of control.

But now that the situation has stabilized, his approach could turn into a liability when it comes to withdrawing support measures, as markets react wildly to unexpected news, harming the recovery.

“Surprises can be good when you want to elicit a major market reaction, such as when you want to end a financial panic as Draghi did in July 2012,” said Holger Schmieding, chief economist at Berenberg, a Hamburg-based private bank. “If you don’t want to elicit a major market reaction, it is better to proceed calmly, step by step, with communication always ahead of the actual policy steps.”

Draghi seems to think that he should be the sole source of early guidance. Possibly worried about investor jitters on perceived differences between policymakers, Draghi earlier this year warned his executive board against publicly discussing future policies, according to a bank official. The move was begrudgingly received and adhered to halfheartedly at best.

Whatever its economic merits, the Draghi and Graeff media strategy has not resonated with the general public. That may be in part because ECB executive board members tend to speak more to expert media outlets rather than mainstream media.

In the recent years, most board member interviews have gone to financial news providers Bloomberg and CNBC, as well as Germany’s Boersen-Zeitung, which markets itself by its narrow focus on “pure” financial news.

Not reaching out to eurozone citizens is reflected in their lack of trust in the central bank. Even as people in the eurozone have rediscovered their love for the common currency, with public support for the euro hitting a 12-year high this year, just 37 percent of the population trusts the bank, according to the European Union’s most recent Eurobarometer opinion poll. Some 49 percent do not.

If the ECB leaves the public in the dark, investors are wandering in a fog with little idea where the path ahead leads.

What is needed to master the momentous challenge ahead, though, is a clearly spelled out and longer-term exit strategy for all to understand that is backed by the council.

“Communicating an optimal exit plan would be a good place to start,” BNP Paribas economist Richard Barwell said. The chief advantage of publishing that plan is that it would force the council to discuss and agree it beforehand.”

Draghi has two key upcoming speaking engagements, one during the Fed’s Jackson Hole symposium from August 24-26 and the other when he holds his regular press conference in Frankfurt in September.

He could say anything — or nothing at all.