New ECB chief urges Europe to over­come self doubt

Muscat Daily - - BUSINESS -

Frank­furt, Ger­many - Chris­tine La­garde steered clear of mon­e­tary pol­icy in her first speech as Euro­pean Cen­tral Bank (ECB) pres­i­dent, call­ing in­stead for ‘strength, re­solve and courage’ in the re­gion at an award cer­e­mony for for­mer Ger­man fi­nance min­is­ter Wolf­gang Schaeu­ble.

“I be­lieve this is a mes­sage all of Europe needs to hear to­day,” La­garde said in Ber­lin late Mon­day. “A call to re­mem­ber our bet­ter selves and not to al­low self-doubt to drag us down.”

On her first work­ing day at the cen­tral bank, La­garde stayed away from dis­cussing mon­e­tary stim­u­lus - typ­i­cally controvers­ial in Ger­many - and said any­one who wanted to hear her views on the topic should ‘please leave the room’. Still, she joins the in­sti­tu­tion at a key mo­ment, with the euro-zone econ­omy again un­der stress and the ECB putting in­creas­ing pres­sure on politi­cians to step up with fis­cal mea­sures and struc­tural re­forms.

Ger­many, the re­gion’s largest econ­omy, has faced crit­i­cism for con­tin­u­ing to run a bud­get sur­plus, wa­ter­ing down pro­pos­als such as a euro-area fis­cal ca­pac­ity, and stem­ming progress to­wards a com­mon de­posit in­sur­ance. Schaeu­ble, now the head of Ger­many’s lower house of par­lia­ment, has of­ten vil­i­fied the ECB, even blam­ing its loose mon­e­tary pol­icy for con­tribut­ing to the rise of right-wing pop­ulism in Ger­many.

In show­er­ing praise on Schaeu­ble, La­garde called him a for­mi­da­ble ne­go­tia­tor, and a straight-talker with a foren­sic mind. “You are no­to­ri­ous for your abil­ity to pick apart shal­low ar­gu­ments and for your in­tol­er­ance of su­per­fi­cial­ity.”

Last week La­garde said there wasn’t enough sol­i­dar­ity in the 19-na­tion re­gion as she called on Ger­many and the Nether­lands with their ‘chronic bud­get sur­pluses’ to look at ramp­ing up in­vest­ment. Es­tab­lish­ing a bond with Ger­many will be one of her key chal­lenges.

The most re­cent Euro­barom­e­ter sur­vey of pub­lic opin­ion showed 40 per cent of the coun­try’s pop­u­la­tion tends not to trust the ECB. For­mer ECB chief Draghi was por­trayed by tabloid me­dia as suck­ing Ger­man savers dry with his neg­a­tive rates, and Bun­des­bank pres­i­dent Jens Wei­d­mann has been a long-stand­ing critic of quan­ti­ta­tive eas­ing.

On Mon­day, La­garde said, “Of course, there have been dif­fer­ent views about what con­sti­tutes a ‘good so­lu­tion’ for Europe, such as the ap­pro­pri­ate bal­ance be­tween shar­ing risks and re­duc­ing risks.”


The new pres­i­dent of the Euro­pean Cen­tral Bank, Chris­tine La­garde speaks at an event in Ber­lin on Mon­day

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