A year ago, the President of the European Central Bank (ECB), Christine Lagarde, issued a stark warning regarding the European Union’s (EU) competitiveness. She noted that internal barriers are throttling innovation, productivity, and investment. In response to France’s proposal to expand the ECB’s mandate to include growth objectives, Lagarde added that monetary policy was inadequate to address these challenges; the EU must therefore undertake structural reforms. These internal barriers limit both services and goods. In some cases, national regulations exceeding EU requirements exacerbate the problem. She recommended the creation of an EU Capital Markets Union. She also advocated for joint European bond issuance, explicitly referencing defence spending. However, such reforms face resistance within the EU. To underscore her warning, Lagarde claimed that Europe is experiencing an “existential crisis!”
BARBER: Mark Carney’s European ‘associate membership’ delusion
