First speech as ECB President: Lagarde demands more investment from governments

The new ECB President Christine Lagarde wants to significantly strengthen domestic demand in the eurozone. She called for more investment - both from governments and companies. In this way, the increasing global economic uncertainties could be overcome.

The world's second largest economic zone must be open and confident in itself, said Lagarde at her first public speech as President of the European Central Bank (ECB) at a banking conference in Frankfurt. The potential to create stronger domestic demand and long-term growth must be raised.

The ECB can also contribute to this. "Monetary policy will continue to support the economy and respond to future risks in line with our mandate for price stability," said the Frenchwoman. "And we will continuously monitor the side effects of our policies."

Demand for more investment

At the same time, the head of the central bank called on governments to make their contribution. Monetary policy could achieve its goal faster and with fewer side effects, while at the same time supporting policies with growth.

Budgetary policy plays a key role in this. "Public investment in the euro area remains below its pre-crisis levels," she said. Investments are a particularly important part of the answer.

A few weeks ago, she had already called on countries with budget surpluses, such as Germany and the Netherlands, to spend more in the fight against the economic downturn in the euro area. Such countries should use their leeway and invest in infrastructure or education.

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"Investing is a particularly important part of responding to today's challenges, as they are today's demand as well as tomorrow's supply." In addition to public investment, Lagarde also called private investment by companies.

The former head of the International Monetary Fund (IMF) had replaced the Italian Mario Draghi at the head of the ECB at the beginning of the month. She came across a monetary policy-divided Governing Council. For the large package of measures adopted in September to support the weakening economy had been criticized internally in some cases. Lagarde had already announced that he wanted to overcome the dispute over the recent easing.