- As for Europe, European Central Bank President Christine Lagarde said a continued decline in the working-age population is expected to begin as early as 2025, alongside climate disasters that increase every year.
- Her response to these shocks was that massive investment would be needed in a short period of time, requiring what she called “a generational effort.”
European Central Bank President Christine Lagarde attends the European Parliament’s Economic and Monetary Affairs Committee, at the European Parliament, in Brussels, Belgium, September 25, 2023.
Yves Herman | Reuters
European Central Bank President Christine Lagarde said on Friday that Europe now finds itself at a critical juncture, with deglobalization, demography and decarbonization looming on the horizon.
“There are increasing signs that the global economy is fragmenting into competing blocs,” she said at the European Banking Congress, according to a transcript.
Focusing on Europe, she said a continued decline in the working-age population is expected to begin as early as 2025, alongside climate disasters that increase every year.
Her response to these shocks was that massive investments would be needed in a short period of time, requiring what she called a “generational effort”.
“As new trade barriers emerge, we will need to reassess supply chains and invest in new chains that are safer, more efficient and closer to home,” Lagarde said during the opening speech.
“As our societies age, we will need to deploy new technologies so we can produce more with fewer workers. Digitalization will help. And as our climate warms, we will need to advance the green transition without further delay.”
She said estimates show the bloc’s planned green transition will require an additional investment of 620 billion euros ($672 billion) each year until the end of the decade, with an additional 125 billion euros per year. year for the digital transition.
“Governments have the highest debt levels since the Second World War and European recovery funding will end in 2026. Banks will have a central role to play, but we cannot expect them to take so much risk on their balance sheets,” she added. , highlighting the Capital Markets Union (CMU) project.
Discussions are still ongoing on a possible CMU for Europe. The aim is to create a single capital market, making it closer to what exists in the United States.
The EU says the official aim is to move “money – investments and savings – across the EU so that it can benefit consumers, investors and businesses, regardless of where they are.”
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