European Central Bank (ECB) President Christine Lagarde told an annual meeting in Davos, Switzerland, that Europe’s “laziness” and its cautious attitude to risk led to the EU’s economic decline.
We have a lot of assets, but we’re shooting ourselves in the foot many times because we don’t complete the work we set out to do.
Lagarde called on European leaders to deepen the single market by removing barriers to trade and investment. Europe’s economic challenges, including high energy prices and weak domestic demand, were largely caused by the EU’s economic policies, she stressed.
The ECB president also voiced hope that Donald Trump’s re-election as US president would force Europe to be more proactive. Lagarde’s stance was supported by Germany’s Vice-Chancellor Robert Habeck, the leading candidate of the German Greens in the February elections.
If we are saying, ‘Oh well, this [blows] over and [then we go] back to our own laziness…’ we’re doing it all wrong. I would say deregulation and making things faster and cutting red tape are right.
However, Lagarde stated that “simplification” was the solution to the stalled economy.
I think words matter. We’re not moving to a world of deregulation across the board, but we are certainly looking at significant simplification.
According to the European Commission, the financial union could unlock €470bn of additional private investment each year, more than half of the €800bn of additional annual investment recommended by Mario Draghi, Lagarde’s predecessor at the ECB, to boost EU competitiveness.
