European Central Bank President Christine Lagarde wants EU governments to consider the possibility of making EU debt a permanent fixture of the bloc’s economic response to crises, she told Le Monde in an interview published Monday.
Speaking of the €750 billion debt-fueled response to the coronavirus crisis, which the European Commission is going to borrow on financial markets and disburse as grants and loans to EU countries, Lagarde said “this stimulus tool responds to an exceptional situation. We should discuss the possibility of it remaining in the European toolbox, so that it can be mobilized again in equivalent circumstances.”
Lagarde previously denied the possibility of making this exercise permanent — a toxic proposition for so-called frugal countries such as Austria, the Netherlands, Denmark and Sweden. Last month, she said “it’s a one-off response to exceptional circumstances” during a hearing in the European Parliament.
In the Le Monde interview, however, she appeared open to the possibility of perennial EU debt. She also called for talks on a permanent eurozone budget: “I hope that a debate on a common budgetary tool specific to the euro area can also take place, and learn from the lessons learned from what is happening today,” she said.