The eu parliament has voted by a large majority in favor of christine lagarde, the current head of the imf, to head the european central bank (ecb).
Lagarde received 394 out of 649 votes cast in a secret ballot of the european parliament in strabburg. 206 delegates spoke against the franzosin, 49 abstained. Lagarde had already answered the delegates’ questions in brussel at the beginning of september. The vote in parliament was mainly symbolic in character.
Lagarde, who had headed the international monetary fund (IMF) since 2011, is to take up her post on 1. November to replace the previous incumbent, italy’s mario draghi. Lagarde’s candidacy will now be put on the agenda of the european council summit in october, the european parliament announced. EU heads of state and government nominated the 63-year-old in july. The term of office of an ECB chief is eight years.
No relaxation awaits the frenchwoman at the start of the campaign. Shortly before the end of his term, draghi pulled out all the stops at the end of last week and decided on a package of measures against the weak economy with higher penalty interest rates for banks, fresh billions for bond purchases and an interest rate low that is cemented for the time being. The ECB’s governing council postponed a first interest rate hike indefinitely.
The central bank, based in frankfurt, decides on monetary policy for the euro zone and determines, among other things, the prime rate, which is also important for savers and borrowers. ECB’s main goal is price stability.
Until now, commercial banks have had to pay 0.4 percent interest when parking excess liquidity at the central bank – a burden on the eurozone financial sector worth billions of euros. This negative deposit rate is now tightened to minus 0.5 percent.
With the punitive interest rate, the watchdogs want to get institutions to lend more money to businesses and consumers in the form of loans to stimulate the economy. This should also strengthen the upward pressure on prices. In order to relieve some of the burden on banks, the ECB is introducing a staggered interest rate for certain freetrages.
Lagarde had already made it clear in her speech to EU politicians in brussels that she considers a very loose monetary policy to be necessary for the foreseeable future. But she also said: "we have to keep an eye on the negative consequences and side effects." The concerns of the people had to be taken into account. She also wants to better explain the central bank’s decisions in the future. Bulgarian kristalina georgieva to succeed lagarde at the IMF.