The president of the European Central Bank (ECB), Christine Lagarde, defended this Tuesday, in Sintra, that there is concern about the “budgetary rules that must be respected” in the European Union (EU)
Between the lines of Lagarde’s self-praise in Sintra: the ECB did a “remarkable” job in the fight against inflation
Lagarde said at the ECB Forum in Sintra that fiscal policy is important, especially now that the reform of the fiscal framework has been carried out “within which Member States have to operate and monitor the direction of debt and ensure that it remains sustainable.”
They have to do it “with flexibility, with enough focus on productivity and growth, with investment This leads to these two,” he said, stressing that he hopes that “operating within the European budgetary framework, countries will look at the structural changes they must continue to make in order to have a set of tools” that will allow them to improve productivity.
The ECB is therefore “concerned about the budgetary rules that must be respected within the EU and the structural reforms which will lead to improved productivity, which is the only way for Europe to remain strong and prosper.”
One of the countries with the most worrying budget situation is France And although the ECB president declined to comment directly on this specific case, she admitted that they are paying attention to the situation.
France. Lagarde says the ECB is “always attentive” to political uncertainty in eurozone countries and “will do what it has to do”
Christine Lagarde said the institution must pay attention to the stabilization of financial markets and is therefore also closely monitoring the political situation in France.
“The ECB has to do what it has to do, Our mandate is price stability and we are attentive to this because it is part of our job,” he said, highlighting that these are the things they monitor.
On the US side, Federal Reserve (Fed) Chairman Jerome Powell, also present at the panel, stressed that the country “has a very high deficit” and that the level of public debt “is not unsustainable, but the trajectory at this moment is.”
You should focus on moving forward, thinking about how we can get back to being sustainable path”for public debt,” warned the president of the Federal Reserve.
Brazil’s central bank governor Roberto Campos Neto also warned of the risks of high public debt, noting that the cost of servicing debt in the US, the European Union and Japan is rising, which has an effect on the market.
“Global debt is very high and will start to drain liquidity from markets,” he said, noting that “low-income countries are already feeling the impact.”
For the person in charge, there are several “bills to pay in the future”, such as the “cost of green transitionthe cost of fragmentation, the cost of pandemic in low-income countries and also in energy and innovation,” so it is important to think about how to achieve a “stable debt trajectory.”
Source: Observadora
