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Lagarde kicks off ECB term facing sceptical Germans


The new President of the European Central Bank (ECB) Christine Lagarde arrives at the compound of the ECB headquarters in Frankfurt/Main, Germany, on November 04, 2019. – Christine Lagarde took over on November 1, 2019 as president of the European Central Bank, replacing Italy’s Mario Draghi, as the institution has been riven by a return to easy money policies to stoke inflation and ward off recession. (Photo by Daniel ROLAND / AFP)

Christine Lagarde was to kick off her first week as European Central Bank chief with a closely-watched speech in Berlin later on Monday, where she will face a German audience fiercely critical of the bank’s easy money policies.

Arriving for her first full day of work in Frankfurt, the former French finance minister told reporters she would meet with staff members at the ECB headquarters before jetting off to the German capital.

Lagarde said she was due to speak at an evening ceremony in honour of “my friend Wolfgang Schaeuble”, Germany’s parliamentary speaker and veteran ex-finance minister.


Schaeuble, a conservative champion of austerity, is the architect of Germany’s strict “black zero” budget policy of not racking up new debts, defying pleas from other EU capitals to increase public spending.

It is also the country that has been among the loudest opponents of the ECB’s unprecedented stimulus measures in recent years, arguing that its record-low interest rates and cheap credit were hurting German savers.

Asked whether she would bring up the “black zero” in her speech, Lagarde said: That’s a topic that we discuss always together, but privately.”

In her previous role as head of the International Monetary Fund, Lagarde regularly added her voice to calls for Germany to spend and invest more, and in doing so help bolster eurozone growth.

Her ECB predecessor Mario Draghi also routinely urged eurozone countries to use their fiscal leeway to support the bank’s ultra-loose monetary policies with fiscal stimulus.

In a sign that she may take a more assertive approach, Lagarde last week singled out Germany and the Netherlands as “countries with chronic budget surpluses” that should loosen their purse strings to redress “imbalances” in the 19-nation currency bloc.

Markets will be closely following Lagarde’s first outing as ECB chief for any hint of policy changes to come.

So far Lagarde, who is a lawyer and not an economist by training, has indicated she will stick to the “same sound principles” as her predecessor in the face of a darkening eurozone outlook.

But a change in style was already obvious compared with Draghi, who tended to ignore impromptu questions from reporters.

“See you. Off to work now!” a smiling Lagarde told the press pack as she walked into her new office.


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