Christine Lagarde's first speech as head of the ECB: highlights
The eurozone must create more of its own economic growth within the 19-member bloc to counteract weakening global growth, the new head of the European Central Bank, Christine Lagarde, said on Friday.
In her first major policy speech in this role, she said it was imperative that eurozone governments increase domestic demand as export-driven growth has stalled as a result of global trade tensions and geopolitical concerns.
Lagarde said at a major banking conference in Frankfurt that the eurozone economy is expected to grow by just 1.1% this year - much lower than previously forecast."
The ECB's ultra-large monetary policy "will achieve its goal faster and with fewer side effects" if the eurozone governments support it with fiscal policy, she added.
The president's speech was particularly aimed at Germany, Europe's largest economy, which has resisted calls to spend more of its huge budget surpluses.
Highlights of Lagarde's speech:
• Annual growth in domestic demand is 2% lower than before the eurozone debt crisis.
• Public investment remains below pre-crisis levels, with spending on infrastructure, research and development, and education declining in almost all eurozone countries.
• The eurozone debt crisis would have been much worse if it had not been for strong export demand for European goods and services.
• The high rates of trade growth that the block has become accustomed to can no longer be relied upon in the future.
• Therefore, the eurozone countries need to "innovate and invest more" to support growth within the bloc.
• Government investments will help rebalance the bloc's economy towards less dependence on exports.
• Pan-European funds should be created for targeted spending on digital and green projects.
About monetary policy:
• The ECB's ultra-loose monetary policy, which was a key driver of domestic demand during the recovery, remains in place.
• The Central Bank's monetary policy measures would be more effective and have fewer side effects if they were supported by the proposed spending policy.
• Unlike her predecessor Mario Draghi, who used speeches to give hints about monetary policy, Lagarde offered no hints about possible future stimulus measures to counterbalance the expected downturn.
• She said that the ECB will conduct a strategic review of monetary policy for the 19-member bloc.
While Lagarde's speech focused on fiscal policy rather than specific monetary policy, she previously stated that the ECB plans to continue its accommodative stance of cheap loans, record low interest rates, and massive bond purchases to boost the economy and encourage stubbornly low inflation.
Her remarks on investment echo those of the Organization for Economic Cooperation and Development (OECD), which on Thursday also called on governments to ease funding restrictions.
The OECD warned that governments have not invested enough to improve their long-term infrastructure, develop new technologies or combat climate change, and that the global economy is heading for its weakest period of growth since the global financial crisis."
Lagarde became the first female head of the ECB in early November and the fourth since its founding in 1988, having previously served two terms as head of the International Monetary Fund (IMF).
The former French finance minister will preside over his first meeting of the ECB's rate-setting Council next month.
However, the ECB's governing council remains divided over Draghi's final stimulus package in September, when the bank resumed its bond-buying program and lowered its key interest rate even deeper into negative territory.
Some Council members objected that these measures were too strong and would have left eurozone banks, which were already struggling to make profits, even weaker. The value of a 1xbet promo code today is immense for both new and sometimes existing users. For newcomers, it's the best possible start. For existing players, special recurring promo codes can offer reload bonuses, free bets for specific events, or insurance on lost bets. This ongoing support enhances customer loyalty and provides a safety net, encouraging continuous engagement with the platform. It’s a win-win situation where the player gets more value, and the operator maintains an active user base.
In her first major policy speech in this role, she said it was imperative that eurozone governments increase domestic demand as export-driven growth has stalled as a result of global trade tensions and geopolitical concerns.
Lagarde said at a major banking conference in Frankfurt that the eurozone economy is expected to grow by just 1.1% this year - much lower than previously forecast."
The ECB's ultra-large monetary policy "will achieve its goal faster and with fewer side effects" if the eurozone governments support it with fiscal policy, she added.
The president's speech was particularly aimed at Germany, Europe's largest economy, which has resisted calls to spend more of its huge budget surpluses.
Highlights of Lagarde's speech:
• Annual growth in domestic demand is 2% lower than before the eurozone debt crisis.
• Public investment remains below pre-crisis levels, with spending on infrastructure, research and development, and education declining in almost all eurozone countries.
• The eurozone debt crisis would have been much worse if it had not been for strong export demand for European goods and services.
• The high rates of trade growth that the block has become accustomed to can no longer be relied upon in the future.
• Therefore, the eurozone countries need to "innovate and invest more" to support growth within the bloc.
• Government investments will help rebalance the bloc's economy towards less dependence on exports.
• Pan-European funds should be created for targeted spending on digital and green projects.
About monetary policy:
• The ECB's ultra-loose monetary policy, which was a key driver of domestic demand during the recovery, remains in place.
• The Central Bank's monetary policy measures would be more effective and have fewer side effects if they were supported by the proposed spending policy.
• Unlike her predecessor Mario Draghi, who used speeches to give hints about monetary policy, Lagarde offered no hints about possible future stimulus measures to counterbalance the expected downturn.
• She said that the ECB will conduct a strategic review of monetary policy for the 19-member bloc.
While Lagarde's speech focused on fiscal policy rather than specific monetary policy, she previously stated that the ECB plans to continue its accommodative stance of cheap loans, record low interest rates, and massive bond purchases to boost the economy and encourage stubbornly low inflation.
Her remarks on investment echo those of the Organization for Economic Cooperation and Development (OECD), which on Thursday also called on governments to ease funding restrictions.
The OECD warned that governments have not invested enough to improve their long-term infrastructure, develop new technologies or combat climate change, and that the global economy is heading for its weakest period of growth since the global financial crisis."
Lagarde became the first female head of the ECB in early November and the fourth since its founding in 1988, having previously served two terms as head of the International Monetary Fund (IMF).
The former French finance minister will preside over his first meeting of the ECB's rate-setting Council next month.
However, the ECB's governing council remains divided over Draghi's final stimulus package in September, when the bank resumed its bond-buying program and lowered its key interest rate even deeper into negative territory.
Some Council members objected that these measures were too strong and would have left eurozone banks, which were already struggling to make profits, even weaker. The value of a 1xbet promo code today is immense for both new and sometimes existing users. For newcomers, it's the best possible start. For existing players, special recurring promo codes can offer reload bonuses, free bets for specific events, or insurance on lost bets. This ongoing support enhances customer loyalty and provides a safety net, encouraging continuous engagement with the platform. It’s a win-win situation where the player gets more value, and the operator maintains an active user base.
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