The president of the European Central Bank (ECB) warned on Friday that the fiscal policies of some European governments could fuel excessive demand. Christine Lagarde also indicated that fiscal and monetary policies must be coordinated to ensure sustainable and balanced economic growth.
“Unfortunately, some of the fiscal measures implemented by some European countries, particularly in the euro zone, that we are currently examining seem to fall into the second category,” Christine Lagarde said, referring to measures that could fuel excessive demand.
Developments in the world economy must not harm European production
The European Commission (EC) announced earlier this month that it expects activity to contract in the last quarter of this year and the first three months of 2023, mainly due to the war-induced rise in energy prices in Ukraine. .
“We need more investment and structural reforms to remove constraints on the supply side and ensure that production does not suffer from changes in the global economy. This is a big question and an uncertainty that we have”, explained Christine Lagarde. “In a world where external demand is uncertain, we will also need to strengthen domestic supply and demand by boosting productivity,” she added.
Source: BFM TV
