Vulcan Insight

Draghi passes the torch to Lagarde

1 November 2019

Christine Lagarde has officially commenced her new role as President of the European Central Bank.  At the handing over ceremony on Wednesday evening outgoing President Mario Draghi used his final speech to urge unity amongst members of the governing council.

Trade and geopolitical tensions forced the ECB to restart its bond buying programme in September, and to cut deposit rates further into negative territory. The effectiveness of the decisions were questioned by members of the ECB’s governing Council, including France, Germany, Austria and the Netherlands.

Leaders of the Eurozone’s biggest economies attended the ceremony and paid tribute to Mr Draghi’s commitment to do ‘whatever it takes’ to save the Euro – a key intervention by Draghi in 2012 which is widely seen as having averted catastrophe at the height of the Euro crisis.  French President, Emanuel Macron, said “It’s now up to us, heads of state and government, to carry this ‘whatever it takes’ to measure up to your courage and your clear-sightedness.” 

Ms Lagarde has pledged continuity in loose monetary policy, but also signaled that a rethink of the institution’s strategy — something some officials have openly advocated for — may be needed.

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