Christine Lagarde was recommended for the post of ECB President on Wednesday evening by MEPS who had questioned her throughout the morning on her competences and plans.
During a vote in the Economics and Monetary Affairs Committee, Ms Lagarde received 37 votes in favour of her taking up the position, 11 against and 4 MEPs abstained. The recommendation will now be passed on to the plenary for a confirmatory vote, which is expected to take place during the September plenary session from the 16th to 19th September.
Throughout most of the morning, Ms Lagarde fielded questions from committee MEPs during a hearing intended to judge her suitability for the post of President of the European Central Bank (ECB).
There were recurrent questions on whether the ECB should prioritise its secondary objectives and better integrate including through a review of its monetary framework, and the need to more effectively integrate fighting climate change into the Bank’s mandate.
MEPs also asked Ms Lagarde how the negative effects, such as extra low interest rates, stemming from the exceptional measures taken by the ECB could be mitigated, especially through its quantitative easing programme, the need to review the ECB’s code of conduct, the role of the Euro as a reserve currency, and how the ECB’s decisions can be better explained to the public.
In her replies, Ms Lagarde agreed that it was time to review the ECB’s monetary framework to address new challenges such as non-bank lending, fintech, crypto currencies, and climate change. She stressed that she would champion climate change becoming a “core concern” for the ECB, given it could pose “macro-critical risks”. Financing the ecological transition would be something all economic actors, including the ECB, would need to prioritise.
Ms Lagarde also said that while the ECB’s quantitative easing had indeed led to certain negative effects, its overall results were positive and that she saw such a “highly accommodative stance continuing for a long time”.
Ms Lagarde told MEPs that communicating and explaining decisions taken to people would be her primary role as future ECB President. “The ECB needs to understand and explain to people, not only the markets”, she said.
You can watch the hearing again here