Ski vacationers have been able to ski the same slopes with the heads of European central banks in Saariselka since the beginning of the week. They will meet in Inari tomorrow, Wednesday, for their half-yearly brainstorming session.
For example, the CEO Christine Lagarde snowshoeed and rode in a sleigh pulled by reindeer with her husband, some went ice skating, some went skiing.
the CEO of the Bank of Finland Olli Rehnin the guests are 24 heads of national central banks and members of the Executive Board of the European Central Bank. Only the Central Bank of Luxembourg is involved remotely.
Under the Inari meeting today, Tuesday, the central bankers will hold a secret “retreat”.
interviewed the President of the ECB and Christine Lagarde, who has been one of the world’s most powerful women for years, during her retreat to Lapland. The interview will be published in its entirety later on Tuesday.
What is Lagarde’s message to Finnish mortgage borrowers struggling with rising interest rates? Are the wage increases already so high that an inflationary spiral is ahead?
Have the Finns been forced to pay in the recent European crisis packages? Does the management of the European Central Bank dance to the tune of the big euro countries?
also asked the students beforehand to ask Lagarde questions.
In Lapland, the future interest rate policy is outlined
The last similar retreat was organized in Cyprus in October and the next retreat will be in Athens, Greece in the fall. During Lagarde’s term, informal meetings have been a way to increase the teamwork of central bankers.
There has been an extraordinary amount of demand for mediation and informal exchange of opinions, because since the financial crisis of 2008, the euro countries have in some places sharply disagreed on the principles of economic management.
The advantage of a casual trip to the snow is that central bankers can argue more freely there than in official meetings. For example, in Cyprus last October, it was planned what additional means to tighten monetary policy could be found in addition to raising interest rates.
At that time, it was reportedly agreed to reduce the purchases of securities, such as government bonds, which were decided upon in December.
Lagarde’s management idea is to first seek consensus and then work together to implement the decision. For example, the US central bank Fed publishes (you switch to another service) openly differing views of their leaders.
Olli Rehn invited the European Central Bank to Inari: “Choosing the meeting place is a sign of appreciation for the important work of the Sámi assemblies”
Lagarde grabbed a place from the Finns
The Frenchman Lagarde’s period at the head of European monetary policy has been a time of big changes.
His predecessor, the Italian Mario Draghi had driven interest rates deep below freezing and pumped billions of euros into the economy with programs to buy securities – in practice government bonds.
The financial crisis of 2008 started a recovery that had almost emptied the ECB’s monetary policy toolbox and pushed the eurozone member countries into an unprecedented confrontation as 2019 came.
At one extreme were those who supported central bank stimulus and at the other those who thought the market was being blamed for too much loose money.
Lagarde was elected CEO at the stormy Brussels summit in the summer of 2019. Finns may remember that the former CEO of the Bank of Finland also competed for the position Erkki Liikanen and the current Olli Rehn.
However, the cow trades of the big EU countries watered down their chances.
Who Lagarde?
Unlike her three predecessors, Lagarde had no previous central banking experience and is not an economist. He is a lawyer by training.
However, Lagarde has made a handsome career both in her home country’s French economic policy and in international finance: she sat in French governments for six years, including as finance minister, and for the last eight years was the head of the International Monetary Fund (IMF) before her predecessor. Dominique Strauss-Kahn after having to resign following a scandal.
As finance minister, Lagarde was a key architect in preparing rescue packages for French banks in the wake of the financial crisis.
It is estimated that Lagarde got her current position thanks to her political background. His networks are extensive, he is an experienced mediator and negotiator and he has influenced the solution of many international financial crises.
After being elected, Lagarde was immediately asked in a handshake whether she represents the hawks of strict economic discipline or the doves of a looser monetary policy in monetary policy. Lagarde replied that neither: she wants to be an owl because it is known for its wisdom.
“Women save difficult situations”
Lagarde is a feminist who has often supported women in developing countries in particular. He is also rated (you move to another service) such female leaders who do declare that they are feminists, but do not act according to their words.
After being elected to the head of the International Monetary Fund, the IMF he stated, (you switch to another service) that whenever things are very difficult, a woman is needed to save the situation. Men may be afraid to act if success is almost impossible: they may be afraid of losing their reputation, for example.
Lagarde has said that she learned strength especially when practicing artistic swimming – formerly known as water ballet. At the age of 15, he won the bronze medal in freestyle swimming at the French championships and also swam in the French national team at a young age.
– Mandatory movements must be performed in artistic swimming. Then a panel of judges evaluates the performance, whether you succeeded or not. Sometimes grades are unfair, but you still have to swallow it, grit your teeth and smile, Lagarde is said (you switch to another service).
With the same doctrine, he says that he also works in the leadership of the ECB. Criticism from monetary policy analysts – who are advantageously male – has indeed been harsher towards Lagarde than her predecessor Draghi.
More on the topic:
The key interest rate rises to its highest level in more than 14 years – according to ECB President Lagarde, steady interest rate increases will continue throughout the spring
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