Speech by Christine Lagarde, President of the ECB, at the high-level public discussion “Inflation kills democracy” on the occasion of the 100th anniversary of the currency reform in Germany in 1923, organised by the German Ministry of Finance in Berlin, Germany

Berlin, 21 November 2023

The story of Germany in the years after the First World War is a striking reminder of how price stability and democracy go hand in hand.

The historian Gerald Feldman famously called those troubled years “the Great Disorder”.^[1] And although the relative contributions of the hyperinflation of the 1920s and the deflation of the 1930s are still debated, there is little doubt that wild swings in prices eroded the economic foundations of democracy.

One of the ways in which price instability does this is by triggering large distributional effects, which often hurt the poorest in society the most. For example, ECB analysis finds that the spike in inflation over the last 18 months has…