Reflections on Lagarde, Germany and the future of the ECB

In her first week as president of the European Central Bank, Christine Lagarde presented former German finance Minister Wolfgang Schäuble with an award from the association of German magazine publishers. During this engagement she did not speak of monetary policy but rather called for Europe to have ‘strength, resolve and courage’.

In a discussion with Ellie Groves, OMFIF Chairman David Marsh and his US counterpart Mark Sobel offer differing views on how Lagarde will best achieve the ECB mandate of ensuring price stability. Sobel argues that the continuation of loose monetary policy is required, whereas Marsh focuses on Germany’s wish for policy normalisation. Both agree that ECB policies should be pan-European and the central bank's new chief has a great strength in her convivial leadership style.

 

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