The President of the European Central Bank (ECB) Christine Lagarde took part in one of the most powerful interventions at the World Economic Forum, which is currently being held in Davos (Switzerland). The eurozone monetary policy chief on Wednesday argued that the EU (EU) should be “strengthened” to protect its commercial interests and offered “joint purchases of energy and raw materials” as counterbalanced action by sellers. [en referencia a Rusia o a las potencias petroleras]“.
Lagarde called on the EU to take a step forward in the wake of the ongoing energy crisis sparked by the Ukraine war following Russia’s invasion. “We have to take a stronger position, which is in line with our position as the world’s largest trading bloc. [y como mayor comprador]”, – he emphasized.
The president of the ECB advocated an alternative to “team play” and joint procurement of energy, minerals or other basic products for the European economy.
Common objectives of the EU
“War has shown us how weak we are by playing so openly, but it also allows us to understand how strong we are if we stay united,” said Lagarde, for whom “Europe is an incredible force when it bends.” However, the central banker acknowledged that the EU sometimes collects (goals) at its own door by slowing down the process and looking at national goals instead of European ones.
“I think we are in a time when Europe can act as a great team of players, at the same time as a referee,” he added, referring to “terrible power” in many areas, such as trade or technology, as well as Japan’s pension fund resources.
Russia’s heavy weight in the global oil and gas market, as well as in the market of raw materials important for industry and minerals crucial for ecological transition, led to a rise in prices, which moved to the entire basket of purchases. Goods and services, at the peak of inflation, which in March in Spain reached 9.8% compared to the same month last year, and in April 8.3%.
This increase in prices leads to a loss of household purchasing power if wages do not increase, a loss of corporate profit margins, and an increase in the value of credit and mortgages. Thus, after the pandemic, another blow to economic growth and more problems to reduce debt.
Consequences against which EU countries have taken various measures. Like the fiscal package of the government shock plan, or as a limit on the price of gas in electricity generation, recently approved by the European Commission in Spain and Portugal. However, risks remain and more responses, such as those proposed by Lagarde, are needed.
Source: El Diario