On Wednesday 29 May, Christine Lagarde, President of the European Central Bank (ECB), answered questions from the MEP Paul Tang (S&D, Dutch) on the effects of tighter monetary policy on the energy transition.
Regarding the integration of climate considerations into the future operational framework, Christine Lagarde confirms that, in line with its secondary mandate and without prejudice to its primary mandate of price stability, the ECB will aim to incorporate climate change-related considerations into its future structural monetary policy operations: longer-term refinancing operations and a portfolio of securities (see EUROPE 13370/33).
For the President, while monetary tightening increases the overall cost and supply of credit, this effect is less pronounced for companies with low emissions or committed to decarbonisation.
Ms Lagarde acknowledges that investment costs may be a barrier to climate-related investments for some companies. She believes that this reflects the dependence of European businesses on bank loans, and calls for the development of green finance and progress towards capital market union.
In her view, price stability remains a key factor in creating a favourable environment for investment.
Further information: https://aeur.eu/f/cgc; https://aeur.eu/f/cge (Original version in French by Émilie Vanderhulst)