12 September 2026
Interview with Christine Lagarde, President of the ECB, conducted by Jean-Christophe Lalay and Maxime Mainguet on 12 September 2026
What brings you to the Fête de la pomme organised by Hervé Morin this Saturday?
I’m here as a friend, a neighbour and a Norman to offer a European voice, without being a candidate for anything. I’m here simply to help French people understand the role of Europe a little better.
On Thursday you announced an increase in the ECB’s key interest rates, which should help to contain inflation but will penalise people planning to purchase property or invest. Why did you take this decision, in a very uncertain context?
The ECB’s task is to maintain price stability. We have an inflation target of 2% over the medium term. Today, inflation is well above 2%, at 3.3% in the euro area, and there has been a major shock that will probably last longer than we had expected. The shock is the result of the conflict in the Middle East, but also the destruction of refining capacity around the world, especially in Russia. It has led to an increase in energy costs, and that drives all prices higher. In this kind of situation, and as we also have a resilient economy, we are obliged to react.
What do you say to the economists who argue that raising interest rates is risky for growth when inflation is related to an external shock rather than an overheating domestic economy?
That’s true when the shock is short-lived. But the current shock is longer-lasting. The conflict is continuing. We expect the volatility and pressure on energy prices to continue, even though the increase in prices also poses a risk of lower growth.
Growth in France is subdued and inflation is lower than in neighbouring countries. It’s going to be particularly affected by this decision…
The ECB has to work for the entire euro area. It can’t look at France, Lithuania or Germany in isolation. Besides, France is one of the countries planning structural reforms, and it would be very important that it implements them.
Which reforms?
First, there are European reforms, such as the capital markets union, which will have an impact in France. We also need to simplify administrative regulations both at the European level and in France. We need to go through the regulatory framework governing economy activity with a fine-tooth comb. France has made progress in making its labour market more flexible, something which has worked very well in Germany and Spain, but reform is a continuous process. And there is of course the pension reform, whatever form it takes. We can’t continue with the model of previous decades when life expectancy continues to rise.
On the whole, growth in euro area countries is less dynamic than it used to be. Can growth really be revived on a lasting basis in an ageing, already highly developed continent?
That’s a legitimate question. Demographics play an important role. But we can offset demographic trends through improved productivity. Even with a smaller workforce, if we become more efficient, we can still generate growth. It’s not a lost cause. Europe has talent, a well-educated population and ample savings, but we are not doing enough to mobilise all of that. We need to take matters into our own hands, and I think the dramatic shift in US policy in recent years should inspire quick, resolute action on our part.
Government borrowing costs are rising almost everywhere. Should we be worried about another sovereign debt crisis?
The rise in long-term rates is linked to two factors. The first is the state of public finances in general, and in the United States in particular. The second is the funding needs of economic actors, especially for artificial intelligence, which represent serious competition for sovereign debt: when investors can choose between different issuers, this inevitably drives up costs for those issuers. But the situation is very different from 2008 or 2011: our financial sector is much stronger than it was back then.
Could French debt held by the Banque de France be cancelled, as some presidential candidates have suggested?
If you borrow €1,000 and then go back to the person who lent it to you and say “in the end I’m cancelling my debt, but I still need money”, will that person still want to lend to you? The idea is so absurd to me that I suspect it is an attempt to undermine the system under the guise of a technical argument, though it is nothing of the sort. It’s financially very dangerous, and it also happens to be a violation of the European treaties. That’s quite the list.
ECB staff recently warned of a hypothetical AI-related “stock market correction” in the United States. This would have an impact on Europe. How severe could the shock be here?
Asset valuations in the AI sector are very high. The various planned initial public offerings are proof of this. There is also an additional risk, which is currently being assessed: circularity risk, whereby one company acquires a stake in another, which then awards it a contract to supply microchips, etc. A correction is entirely possible. When? We don’t know. European banks hold AI-related assets but, as I said, our financial sector is a lot stronger than it used to be.
Coming back to France, what is your position as regards the presidential campaign now getting underway.
My only position is to share my perspective as a woman from Normandy, a French citizen and a European who, having experienced it in every role I have held, can make the case for Europe.
Some people think you would make a good candidate…
That’s flattering! But I don’t think so.
Will you serve out your term at the ECB, which is due to end in October 2027?
I will leave in 2027. I will say no more than that.
Are you considering a return to national politics after leaving the ECB?
No. I’ll be turning 71 soon, you know. You have to know when to call it a day.
