Christine Lagarde on teaching activity with young people – zimo news

This is the express request of high school students invited to this special session on Friday, September 17th by challenge: Pictured with Christine Lagarde and François Villeroy de Gahau. Alternately, high school students from Bobigny, Massy, ​​Paris and Rouen posed for pictures at the Banque de France, specially decorated for the 20th anniversary of the euro, and the two leaders were clearly delighted with the “exercise.”

The presidents of the European Central Bank (ECB) and the Banque de France had an hour-long discussion with the young audience to gain a clearer picture of the central bank’s response to the inflation sweeping across Europe. Christine Lagarde pledged: “I say very forcefully that we will maintain our mission and that inflation will return to 2% in two or three years”.

It is with this goal in mind that the European Central Bank raised its key interest rate by 75 basis points on September 8, in what the World Bank said would be a record rate hike that would create the risk of a recession. The ECB president calmly assumed: “Will a rise in key interest rates lead to a drop in growth? It’s possible, but it’s a risk you have to take.»

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Not surprisingly, François Villeroy de Galhau, president of the Banque de France, agreed. “We can’t rule out a recession in 2023, but that will be limited and temporary.” Christine Lagarde’s confidence in the future is attributable to economic players in their decision-making for months It has factored in a possible rise in key interest rates. “Contrary to what has been said here and there, we have successfully communicated our objectives. Therefore, the ECB or Banque de France forecasts of around 0.9% growth in the euro area in 2023 are based on market expectations of our actions. »

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Faced with inflation, the ECB president doesn’t see rising wages as a bailout. on the contrary. “What we absolutely want to avoid is the so-called second-round effect: when prices go up, we negotiate pay increases, sometimes even higher than inflation, which causes prices to go up, and there, we’re in a terrible vortex,” she believes.

Action levers against global warming

Inevitably, in front of these young people, the presidents of the Banque de France and the European Central Bank also want to show how central banks are keeping up with their concerns, first and foremost global warming. “The real responsibility for action is the government and parliament. Nonetheless, we central banks must do our part,” Christine Lagarde said. “As climate affects inflation, we must do everything in our power to act, this point is very important.”

The former director of the International Monetary Fund detailed one of these levers, tilt: “As part of our corporate asset reinvestment policy, we will start next month considering the carbon footprint of companies whose securities will eventually be purchased, as well as their commitment to meeting the goals of the ‘Paris Agreement'”, Christine Lagarde explained.

As a result, companies with better climate performance will have an increased share of assets in the balance sheet of the Eurosystem compared with companies with worse performance. “We were also far ahead of green bonds, as 60 percent of them were denominated in euros,” recalls the former economy minister under Nicolas Sarkozy.

When a high school student from Massey asked about his experience in men’s circles, the ECB president concluded with some advice to get the attention of young women and young people from different backgrounds in the audience. “You like me, we often go into rooms where we don’t look like other people. You have to be confident enough to say to yourself: ‘They’re not better than me. They may know more in some areas, but I may be in others The more we know about the field, the richer we can bring together.’”



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