The president of the European Central Bank (ECB), Christine Lagarde, has suggested that governments should moderate certain items of the public budget in order to be able to fund "necessary investments" in defense, energy transition, or artificial intelligence, and thus preserve the balance of public accounts.
"Evidently, there are necessary investments in defense, in the energy transition, probably in the financing of artificial intelligence (...). This means, therefore, containing spending, to, in other respects, maintain their finances," indicated the 'guardian of the euro'.
The head of the ECB has avoided specifying which areas of spending should be adjusted to redirect public deficits. "I am not going to say more, as you can imagine," she concluded, refusing to go into details about possible specific cuts.
Lagarde has emphasized, above all, that States must exercise strict control over public finances and ensure the transparency of budgetary data, referring to the case of Greece during the financial crisis of 2008 as an example of what should not be repeated.
"Trying to tell stories, or arriving three months later saying 'oh, we had forgotten 1.5 additional deficit points, we are not at 6, we are at 7.5', I experienced that with Greece," she argued.
The president of the ECB also recalled that the fiscal rules of the European Commission now incorporate certain "flexibility valves" for certain investments, such as those related to defense, which allow a period of between 5 and 7 years to redirect the budget balance and return to equilibrium.
Boost for European banking champions
In the financial realm, Lagarde has reiterated the convenience of the European Union having "European banking champions," that is, large entities with sufficient scale to compete with the major banks in the United States, which involves promoting the creation of cross-border groups.
"In the banking sector, having banking champions means having cross-border activity, means having a much broader market share, means combining deployment capacity, testing capacity, and the economies of scale achieved through cross-border operations that allow enlarging the size of the groups," she asserted.
The central banker has pointed out that every year 300 billion euros leave Europe, which largely end up invested in the United States, and has called for progress towards a "fluid, liquid, deep, efficient capital market, with a single set of rules, with harmonized supervision" to strengthen the EU's ability to attract and retain those investments.