Christine Lagarde of France, who is about to take over the reins of the European Central Bank (see EUROPE 12358/6), defended on Wednesday 30 October the policy of very low or even negative interest rates, which supports economic growth and employment at the expense of savers.
“Didn’t we finally do the right thing by deciding in favour of employment and growth, rather than in favour of protecting savers?”, she asked while on RTL. “People will be happier to have a job than to have protected savings”, she added, describing the spirit in which the ECB’s very accommodating monetary policy is conducted as “beneficial”.
The former IMF Managing Director also said that euro area countries with surpluses, such as “the Netherlands” and “Germany”, have “not really made the necessary efforts” to provide fiscal stimulus. “Why not use this budget surplus to invest in infrastructure? [...] Why not invest in education, in innovation, to enable a better rebalancing in the face of current imbalances?”, she continued, echoing the call of the outgoing ECB President, Mario Draghi, for fiscal policy to take over from monetary policy in order to cope with the slowdown in growth (see EUROPE 12356/12). (Original version in French by Mathieu Bion)