Christine Lagarde’s Hardest Task Isn’t In Her Job Description

Reviving Europe’s Economy Will Take More Than Monetary Policy

Christine Lagarde answering journalists at the ECB headquarters in Frankfurt, Germany, November 2019 Ralph Orlowski / Reuters

Mario Draghi became president of the European Central Bank (ECB) when the financial crisis had reached its depth. At the time, he promised to do “whatever it took” to safeguard the euro from collapse. Eight years later, Draghi has come to the end of his tenure, which by most measures can be judged a success. He stabilized European financial markets and expanded the bank’s monetary policy toolkit. Even Draghi’s critics admit that he managed better than anyone imagined.

At the very end of his mandate, however, Draghi made his most controversial move to date. In September, he announced that the ECB would relax its existing policy instruments and inject 20 billion euros every month into the eurozone in the form of new asset purchases. The mix of policies, Draghi claimed, would continue as long as necessary to shore up the flagging eurozone economies. He argued that it would restore

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