What Milton Friedman Wrote to Otmar Issing at Creation of ECB

 ‘Congratulations on an impossible job’ was his message

“I opened it, and Milton said: ‘Dear Otmar, congratulations on an impossible job. You know I am convinced the euro will fail, but’ – and then he added — ‘but because of you, collapse might be delayed by some years,’” Issing recalled.

The currency has survived arguably far longer than Friedman would have anticipated. But the inherent fragility he warned about has been a persistent headache, witnessed in the sovereign-debt crisis of the past decade and more recent bouts of turmoil. 

Issing spoke to Bloomberg Television just as ECB turns 25

One of the officials present at the ECB’s birth, and long seen as an archetypal monetary hawk, the 87-year-old Issing has plenty to reminisce about on the challenges of creating a central bank in a multi-country currency union from scratch. 

Here’s a selection of some of his comments. 

Issing, a career academic, was a board member of Germany’s Bundesbank, led at the time by Hans Tietmeyer, when he was tapped to become the country’s appointee to the ECB Executive Board with the responsibility of establishing and leading its economics and research efforts. But in Issing’s words, Chancellor Helmut Kohl needed some convincing.

“He asked Tietmeyer one day: ‘Has this professor ever said something positive on the euro?’ And Tietmeyer, as he told me later, said: ‘Probably not.’ But finally, Tietmeyer convinced the chancellor and the finance minister that nominating me would give much credibility to this position in the board.”

Oliver Crook and Craig Stirling 27 maj 2023 Bloomberg 


Otmar Issing är sannolikt, vid sidan av USA:s Volcker, världens mest respekterade centralbanksperson. 



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