Banking News

Lagarde installed as new ECB Head

Lagarde installed as new ECB Head

(2 July 2019 – Europe) European Union (EU) leaders have named current International Monetary Fund (IMF) head Christine Lagarde as the new head of the European Central Bank (ECB) to commence in the role from November 2019.

The ECB also finalised the EU’s other top four roles after lengthy discussions resurfaced bitter tensions within the world’s largest trading bloc. EU leaders anticipate that the decision to nominate two women, France’s Lagarde and German Defence Minister Ursula von der Leyen as President of the European Commission (EC), to the top of EU economic leadership for the first time will send a positive message and repair damage wrought by such a divisive summit conducted over three days in Strasbourg. Lagarde, France’s first woman finance minister and since 2011 head of the International Monetary Fund (IMF) has no direct active monetary policy experience. The biggest task for Lagarde will be to revive stagnating growth marked by stubbornly low inflation in the euro zone economy.

Lagarde will replace Mario Draghi as ECB President after performing the role during a tumultuous eight-year tenure from 2011 while von der Leyen will replace Jean-Claude Juncker as EC President, the EU’s executive arm. Mr Draghi is credited with saving the Euro currency from disintegrating during Europe's sovereign debt crisis and guiding a subsequent recovery in the region's economy. As president, Draghi didn't raise interest rates once. It has been suggested Draghi should replace Lagarde at the IMF. Von der Leyen, and EC deputies Frans Timmermans and Margrethe Vestager will all lead the EU’s policies until 2024 ranging from climate to migration to trade. The fifth and final leadership position of President of the European Parliament (Parliament's speaker) was won by David Sassoli.

“Christine Lagarde will be a perfect president of the European Central Bank. I am absolutely sure that she will be a very independent president. After all, Europe is a woman” stated outgoing EU Summits Chair Donald Tusk, referring to the ancient Greek mythical figure of Europa who gave her name to the continent.

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