Lagarde Reiterates That ECB Will ‘Stay the Course’, Hiking Significantly at a Steady Pace

23 January 2023

By Xavier D’Arcy – ESCHBORN, Germany (Econostream) – ECB President Christine Lagarde repeated on Monday that the ECB would ‘stay the course’ in the fight against inflation.

Speaking the annual opening of the German Stock Exchange outside Frankfurt, Lagarde said that inflation in the currency union was ‘far too high’ and the challenge facing Europe that concerned her the most. In a speech mostly focused on geopolitics and trade, she said that it was ‘vital’ that high inflation not become entrenched.

The ECB president repeated the guidance issued at the central bank’s press conference in December that rates will ‘still have to rise significantly at a steady pace to reach levels that are sufficiently restrictive, and stay at those levels for as long as necessary.’

‘We must bring inflation down, and we will deliver on this goal’, she said.

In some off-the-cuff remarks not included in the official transcript of her speech, she said that the European economy faced a ‘Leopard moment’.

This was not a reference to the current geopolitical situation and the ongoing discussion surrounding the sale of Leopard 2 tanks to Ukraine, she joked, but to the 1963 film The Leopard, starring Alain Delon and Burt Lancaster.

She quoted Delon’s character, Tancredi Falconeri, who said that ‘If we want things to stay as they are, things will have to change.’

‘For us to thrive, certain things will have to change’, Lagarde said: ‘We have to ask ourselves, what needs to change, how much needs to change, so that we can continue to thrive, and we continue to live, rather than stay put, do nothing, and possibly fall back?’