“We have an open economic model that exposes us to global shocks. However, we seem unable to reduce this vulnerability by correcting our internal market and strengthening our domestic growth,” stated Lagarde, during a speech at the Palazzo Vecchio in Florence, at the official dinner preceding the external meeting of the ECB Council.
She noted that the continent has withstood “storms that could very well have toppled it,” such as the pandemic, the energy crisis, or the war, highlighting that it managed to do so due to the “resilience of its policies, institutions, and commitment to act together.”
“In the past five years, we have faced the worst pandemic since the 1920s, the highest U.S. tariffs since 1930, the deepest energy shock since the 1970s, and the most devastating land war on European soil since the 1990s,” she detailed.
Despite this resilience, Lagarde warned that “old methods can no longer take us much further” and called for “creativity” in decision-making.
Although Member States generally agree on what needs to be done, “governance often prevents us from doing it with sufficient determination,” she stressed, warning that the decision-making process in the European Union “has become too slow, too complex, and too hostage to the vetoes of different Member States.”
Lagarde also encouraged the creation of common European regimes that allow for the application of shared standards “without waiting for a total national convergence” and spoke of “deepening cooperation between groups of countries willing to advance more quickly, not as exclusive clubs, but as pioneers whose progress strengthens the whole.”
