In a scathing speech delivered at the 35th Frankfurt European Banking Congress, President of the European Central Bank Christine Lagarde urged European leaders to conduct widespread reform to ensure economic growth in the near-term and long-term future. The ECB Chief said that “The world will not slow down for Europe – but we can decide how we move forward.”.
President Lagarde said that Europe should no longer depend on exports for future economic growth. Although the EU has recently signed an increasing number of trade deals, exports in some major EU countries such as in Germany have lagged creating uneven economic growth in Europe. The ECB President urged member states to reduce internal trading barriers and speed-up further integration of the single-market to boost economic growth and offset export lag. She added that this will ensure future economic growth and ensure less dependency on external sources. Defence expenditure will help boost European growth, but the ECB Chief added that 10% of the EU’s investments are in US stocks, totaling €6.5 trillion, and Europe needs to make itself more attractive for investment.
The ECB President said more harmonisation is needed in EU law especially for startups and scale-ups and adopting Mario Draghi’s proposal to create a EU legal layer could address this issue. She added that more simplification is needed to free up internal barriers for the services-industries. She also proposed simplification of rules for the circulation of products and harmonisation of VAT. Issues can be addressed more speedily if the European Council adopts qualitative-majority voting she added.
In her speech she also referred to the digital Euro as one of the ECB’s flagship projects will ad to Europe’s resilience ion parallel with existing banking services.
Like her predecessor, Mario Draghi, ECB President Christine Lagarde remains a strong advocate for European economic growth via further European market integration and liberalisation.
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