By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel said on Thursday that the ECB's Transmission Protection Instrument (TPI) was aimed at ensuring the effective conduct of monetary policy and maintaining price stability, rather than responding to specific sovereign spread levels.

Asked about France and the potential use of the TPI at an event in London, Nagel, who heads the Deutsche Bundesbank, declined to comment on individual countries or spread levels, stressing that the Governing Council's mandate was “crystal clear.”

“All instruments — and you mentioned one — the purpose of these instruments is also crystal clear,” Nagel said. “It has to do, at the end, with the conduct of monetary policy.”

“I never comment on spread levels of specific countries,” he added. “My job in the Governing Council is to fulfil my mandate — this is price stability.”

Nagel said that the ECB had several instruments available, but that their use “has nothing to do with maybe certain spread levels or things like that. It is price stability.”

On wages, he said German workers had been in a strong position to negotiate significant increases following the inflation surge that began in 2022, after years of wage moderation.

Looking ahead, Nagel said he hoped wages would continue to increase more significantly in coming years, while pointing to productivity gains as an important factor determining the scope for wage growth.