European Central Bank Christine Lagarde pointed out that high interest rates hurt the vulnerable the hardest
Geneva (AFP) - European Central Bank president Christine Lagarde vowed Wednesday to do whatever it takes to bring down high inflation and restore price stability.
Speaking at the World Trade Organization in Geneva, Lagarde said the ECB would spare no efforts to combat the inflation lashing most of the countries in the eurozone as following Russia’s invasion of Ukraine.
“We will restore that price stability and we will do whatever it takes,” she said.
“Those that are the prime victims of high inflation are the underprivileged, the vulnerable, the lowest paid.
“It keeps us all up at night, because it’s not a pretty situation,” she said, citing countries “where it’s hurting, where it’s bad”.
Speaking alongside WTO chief Ngozi Okonjo-Iweala at an event marking International Women’s Day, Lagarde highlighted that women were among those feeling the inflation crunch the most.
Women “are the first and prime victims”, she said.
The ECB has raised interest rates at an unprecedented pace since last July to bring inflation back down to its two-percent target.
And last week, Lagarde said that more interest rate hikes might be needed in the eurozone after the half percentage point hike it has already signalled will come later this month.
Stock markets wavered Wednesday after US Federal Reserve chief Jerome Powell warned a quicker pace of interest rate hikes might be needed to tame stubbornly-high inflation.
“As president of the ECB, my job is rather limited, but it is critically important, and it is price stability,” Lagarde said Wednesday.
Her job, she said, was “fighting inflation which has been generated by the energy crisis, instrumented by the terrible war against Ukraine.”
- Change in globalisation -
Lagarde said geopolitical tensions were fragmenting world trade, leading to a rise in protectionism that “could well get worse”.
European Central Bank president Christine Lagarde and World Trade Organization director-general Ngozi Okonjo-Iweala staged a public talk at the WTO marking International Women's Day
She said countries were reconfiguring their supply chains but rather than deglobalisation, the world was likely to see a change in the nature of globalisation.
“We are likely to see more trade within blocks as countries that share common values and interests deepen their trade ties to increase their resilience to external shocks and threats,” she said.
“We need to ensure that trade remains as open as possible within the new geopolitical constraints.”
Okonjo-Iweala said global tensions were increasing by the day and were having a palpable effect on trade.
“I would hope the response is not more protectionism,” the WTO chief said.
Lagarde said the fragmentation of world trade threatened to roll back decades of advancement in the rights of women, in terms of economic empowerment.
She called for more women in leadership positions during times of geopolitical tension.
“Fewer testosterones, smaller ego. That helps,” she said.
Lagarde acknowledged that there were only two women out of 26 people on the ECB governing council.
“This is not good enough and we can do better,” she said.