On Tuesday, 17 September, the European Parliament approved Christine Lagarde’s nomination to the European Central Bank (ECB) presidency by a comfortable majority (394 votes in favour, 206 against, 49 abstentions). She will assume the post on 1 November.
Romanian MEP Dacian Cioloș, who chairs the liberal group Renew Europe, believes that Mrs Lagarde is “the right person” for this high-profile position. He noted that, in particular, the former French finance minister will have to rise to the “challenge of uniting the ECB”.
Supported by a comfortable majority of central bankers, the recent measures taken by the Governing Council of the ECB—including a resumption of massive bond buybacks and a further reduction of the deposit facility rate to −0.50%—were deemed disproportionate by Jens Weidmann and Klaas Knot, respectively the governors of the Bundesbank and the Dutch Central Bank (see EUROPE 12326/1).
On behalf of the EPP Group, German MEP Markus Ferber echoed the ongoing debate in Germany on the willingness of some banks to make savers pay for the impact of negative ECB rates.
“Last week’s decision added fuel to the fire. Mario Draghi and the ECB have lost a lot of public trust”, he criticised. Reiterating that the European institution’s mandate was to ensure price stability, he called on the ECB to “leave the path it is on—that is to say, the path of cheap money”.
During her hearing before the MEPs at the beginning of September, Mrs Lagarde had been in line with the ECB’s monetary policy to fight persistently low inflation (see EUROPE 12320/4). She had also committed to make the Frankfurt Institute’s activity more consistent with the fight against climate change.
“Ecology and economy must go hand in hand”, said Damien Carême (Greens/EFA, France). He added, “There is an urgent need to act and align the ECB’s monetary policy with the Paris agreements. From now on, the ECB must disinvest in the most polluting companies and encourage the purchase of ‘green’ assets without waiting for an agreement on green taxonomy” (see EUROPE 12320/5).
According to a study by Positive Money Europe, 63% of securities acquired by the ECB under the CSPP are securities from carbon-intensive industries.
For Spanish MEP Iratxe García Pérez who is president of the S&D Group, Mrs Lagarde “has the leeway to rethink the ECB’s targets and strategies and align them with the United Nations’ Sustainable Development Goals”. Supporting the current monetary policy, she calls for the Stability and Growth Pact to be reformed so as to give Member States “more [budgetary] flexibility”, specifically to stimulate investment.
Yves Mersch. In another non-binding opinion, the European Parliament approved the appointment of Yves Mersch as Vice-Chair of the ECB’s Supervisory Board—which directly supervises the main major banking groups in the framework of the banking union in the euro area—by a large majority (379 votes in favour, 230 against, 69 abstentions). (Original version in French by Mathieu Bion)