© Reuters. ECB’s Lagarde Urges New Policy Mix in Challenging Environment
(Bloomberg) — European Central Bank President Christine Lagarde called for a new policy mix for Europe to ensure the economy will thrive in an increasingly uncertain global situation.
In her first major speech, the new ECB chief said on Friday that monetary policy will continue to support the economy, but that higher spending — especially on investment — is key.
“Twin external and domestic challenges call on us to consider — as Europeans — how we should respond to the new environment,” Lagarde said in Frankfurt. “The answer lies in converting the world’s second-largest economy into one that is open to the world but confident in itself — an economy that makes full use of Europe’s potential to unleash higher rates of domestic demand and long-term growth.”
Lagarde is picking up where her predecessor Mario Draghi left off — in his final speech, he called for euro-zone fiscal support that would take the burden of trying to jump-start the 19-nation economy off the ECB.
Lagarde also said she’ll announce a review of the central bank’s strategy “in the near future,” a step that may start to heal divisions that opened up among policy makers over Draghi’s stimulus.
With her remarks, the Frenchwoman is building on an idea she expressed in Berlin earlier this month, when she urged Europe to overcome its self-doubt and show strength and resolve instead.
“We have a unique possibility to respond to a changing and challenging world by investing in our future,” she said Friday. “All of this would be a game changer, not just for our own stability and prosperity, but for that of the global economy, too.”
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