BAKU, Azerbaijan, January 24. Christine Lagarde, President of the European Central Bank (ECB), expressed optimism about Europe’s economic prospects during the Global Economic Outlook panel at the World Economic Forum in Davos, Trend reports.
Lagarde highlighted key metrics that demonstrate Europe’s economic stability, noting that the debt-to-GDP ratio stands at about 80%, the overall deficit for the Eurozone is approximately 3%, and inflation is down to 2.4%. Interest rates are at 3%, while Europe boasts substantial savings and talent.
"Europe has received a big wake-up call, urging action to address existential threats. If European leaders respond effectively, the continent holds immense potential to tackle these challenges," Lagarde said.
The ECB President emphasized the importance of completing the banking union and capital markets union, as well as retaining talent and savings within Europe. She also pointed out the need to attract skilled workers from abroad to enhance Europe’s competitive edge.
However, Lagarde acknowledged concerns expressed by CEOs and business leaders about the current investment climate. "They cite energy costs, excessive red tape, and bureaucracy as major barriers. Energy costs are decreasing as non-fossil energy production rises significantly. In the Eurozone, at least 70% of electricity now comes from non-fossil sources," she stated.
Lagarde also addressed the impact of the U.S. Inflation Reduction Act (IRA), which had initially attracted significant investments due to generous subsidies. However, she noted that the IRA’s subsidies are unlikely to materialize, creating an opportunity for Europe to reassert itself as a global economic leader.
"There’s no question that the challenges outside Europe are significant, but they also present an opportunity. Europe has the talent, resources, and ambition to remain a key global player," Lagarde concluded.
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