The president of the ECB (European Central Bank), Christine Lagarde, said this Monday (23) that she will leave her term as president as soon as she completes what was assigned to her when assuming the top chair of the European monetary institution. Last week, rumors emerged in the press that she would not fully complete her term at the ECB, which ends in April 2027.
“Completing what was designated in my mandate is my base scenario,” said Lagarde when asked at NABE’s 42nd Annual Economic Policy Conference about when she would leave the presidency of the European Central Bank.
She referred to the ECB’s challenge of bringing inflation to the 2% target and the digital euro. “I strongly believe we are advanced in this process.”
The BC leader also said that the euro zone’s monetary policy is “in a good place”, as is inflation.
She added that the ECB will continue to make its monetary policy decisions on a meeting-by-meeting basis and that the institution needs to remain agile.
Frameworks for the protection of BCs
The ECB president criticized possible political interference in central banks, in a clear allusion to the pressure felt by the president of the Fed (Federal Reserve, the US Central Bank), Jerome Powell, to reduce interest rates in the United States. For her, these attacks serve as an important reminder to create legal frameworks to guarantee the independence of central banks.
“Laws can be rewritten, mandates reinterpreted and institutional norms emptied. Ultimately, independence needs to be rooted in the culture and conviction of the people who serve these institutions – because, sooner or later, legal limits will be put to the test,” she commented.
On Trump’s Fed pick
The ECB president also said that US President Donald Trump’s choice for the presidency of the Federal Reserve, Kevin Warsh, should only focus on his mandate when he assumes the top chair of the North American Central Bank, thus avoiding incorporating political decisions.
“His biggest challenge, Warsh, will be doing his job,” said Lagarde in reference to the Trump administration’s attempted interference in the Fed.
Lagarde also praised current president Jerome Powell’s stance of making public statements about possible interference in the North American BC after the US Department of Justice began an investigation against him.
“I certainly have a lot of respect for Powell and his integrity, so he has my solidarity, at a time when we think around the world that central banks need to be independent,” commented Lagarde.
IA
The president of the European Central Bank also stated that Europe can benefit from advances in AI (artificial intelligence), even though it is not at the forefront of developing the most advanced models. She highlighted the potential for Europe to strategically leverage AI technologies.
According to her, although the continent does not lead the creation of the most sophisticated models, it can use these tools to boost economic growth and innovation in various sectors.
“If history serves as a reference, the greatest economic gain may not be in the production of these tools, but rather in their application throughout the economy”, Lagarde pointed out, stating that the European focus should be on the integration of AI into existing structures. “This is already happening. Digital service providers in Europe are seeing double-digit growth as companies adopt AI tools.”
The ECB official added that Europe is widely seen as lagging behind the United States in AI adoption and innovation.
She mentioned a 2024 report by the institution’s former president, Mario Draghi, according to which the region’s low productivity stems, in large part, from the fact that it did not take full advantage of the first digital revolution.
