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Former European Central Bank President Mario Draghi will get Germany’s highest honor this week, though probably not its undying love.
German President Frank-Walter Steinmeier will give the country’s Order of Merit to the Italian, whose ultra-loose stimulus, including quantitative easing and negative interest rates, embittered many citizens in the euro region’s biggest economy. Unlike his predecessors, Jean-Claude Trichet and Wim Duisenberg, Draghi didn’t receive the award while in office.
If the delay in honoring the man who saved the euro was intended to avoid controversy, it hasn’t worked. An editorial on Monday in Germany’s mass circulation tabloid Bild screamed that Draghi’s accolade was “the most expensive Order of Merit our country has ever awarded.”
That bile may chime with readers who still feel his legacy. Draghi’s policy of ultra-low rates, intended to fight deflation in the euro zone, has cost citizens 120 billion euros ($132 billion) in real purchasing power, Bild claimed, without explaining how that was calculated. QE was another bugbear for Germans wary of monetary financing, and the program still faces a ruling on its legality in the nation’s highest court in March.
“Draghi doesn’t deserve the Federal Cross of Merit, because he abused the independence of the ECB to undermine the prohibition of state financing,” said Klaus-Peter Willsch, a lawmaker from Chancellor Angela Merkel‘s ruling CDU party. “And with his low interest-rate policy, he massively damaged German savers.”
Draghi’s ability to stoke controversy in Germany months after his term ended highlights the challenge faced by his successor, Christine Lagarde, in building bridges with the most important economy in the currency area. She’s trying -- attempting to learn German and making a point of endearing herself to dignitaries.
For his part, Draghi has received multiple prizes for his achievements in office and barely needs another, yet the Order of Merit still represents a hard-fought recognition.
The decision to award it despite his unpopularity could well show how Merkel appreciates his unique role in stemming what was an existential crisis for the euro area. His declaration in 2012 to do “whatever it takes” to save the currency stemmed the unprecedented market turmoil that almost splintered the bloc.
Draghi will receive the honor on Friday at the Bellevue Palace in Berlin, the German president’s official residence.