Christine Lagarde has urged European governments to cooperate better in efforts to stimulate the hesitant eurozone economy, in her first public appearance as President-elect of the European Central Bank (ECB), according to the Financial Times.
Ms Lagarde, who is to succeed Mario Draghi this autumn, made the recent remarks whilst addressing the European Parliament as part of her nomination process.
She told MEPs that “central banks are not the only game in town”, adding that “there is clearly co-operation to be had if all the institutions in Europe — and the eurozone in particular want to respond to the threat of populism”.
Another wave of monetary loosening by the ECB next week could also see rate cuts into negative territory and restarting its €2.6 trillion bond-buying programme.
Her calls for cooperation and potential further stimulus will be welcomed by many northern european countries. Last week German Finance Minister Olaf Scholz highlighted a €50bn emergency fund at his fingertips to stave off recession as did the Dutch Finance Minister.
Ms Lagarde has also called for reform of Europe’s budget rules, urging for changes that would create extra room for economies to use fiscal policy during downturns. Furthermore, in her eyes “central banks and banking supervisors can contribute to mitigating climate change” declaring it “a priority”.
Subject to approval by European parliamentarians, Ms Lagarde is due to take charge of the ECB on 1 November, and will likely pursue a continuation of Mr Draghi’s policies.