The Latest: Lagarde aims to better explain ECB policies
FRANKFURT, Germany (AP) — The Latest on the hearings on the nomination of Christine Lagarde as president of the European Central Bank (all times local):
Christine Lagarde, nominated to head the European Central Bank, says she will strive for clear communication so that ordinary people know why the central bank is taking the decisions that affect them.
Lagarde said during a hearing Wednesday in the European parliament that while “financial market operators” were likely to understand the ECB’s message on monetary issues “I want the people of the euro area to understand why decisions are being made.”
Lagarde is trained as a lawyer, not an economist, although she is versed in finance after serving as French finance minister and head of the International Monetary Fund. The ECB has been criticized in Germany in particular for low interest rates that reduce returns for savers; current ECB President Mario Draghi has pointed out the measures helped create millions of jobs.
Christine Lagarde, the nominee to succeed Mario Draghi as head of the European Central Bank, has said that eurozone member countries should spend more on measures that help economic growth if they can do so without breaking budget rules.
Lagarde said that “there is not a lot of room but there is room that can be used in terms of fiscal policy” to boost the economy through spending on things such as broader high-speed internet coverage.
The countries that belong to the euro are bound by treaty rules that are supposed to limit the size of their deficits, but the largest member, Germany, has been running budget surpluses in the face of urging from the International Monetary Fund and the U.S. Treasury to spend more.
Lagarde is resigning from her job as head of the IMF after being nominated for an eight-year term beginning Nov. 1.
The nominee to succeed Mario Draghi as head of the European Central Bank has defended the bank’s record low interest rates and extraordinary stimulus measures deployed in the wake of the Great Recession and eurozone debt crisis.
Christine Lagarde said during a hearing Wednesday in the European parliament in Brussels that she agrees “a highly accommodative policy is required for an extended period of time.” She also defended the bank’s new tools such as bond purchases and negative interest rates, saying they had helped create 11 million new jobs since 2013 and that without them “the crisis would have been a lot worse.”
Lagarde resigned as head of the International Monetary Fund, effective Sept. 12, after European leaders nominated her for an eight-year, non-renewable term at the ECB beginning Nov. 1.