European Central Bank (ECB) President Christine Lagarde has called on EU leaders to take swift action across several critical areas to bolster the bloc’s resilience amidst global uncertainty. According to a Reuters source, this includes potentially controversial joint debt issuance. Lagarde aims to invigorate a hesitant reform process at this week’s EU summit, as the bloc faces pressure from unpredictable U.S. policy and China’s growing influence in export markets.
Following Lagarde’s announcement last week about sending EU leaders a “checklist” of necessary reforms, the ECB has prepared a document outlining key priorities. These include establishing a savings and investment union, realising the digital euro, deepening the single market, fostering innovation, and strengthening the core institutional framework. The ECB argues that coordinated and decisive collective action can unlock higher growth potential, strengthen resilience, and reinforce policy autonomy and prosperity for Europe, requiring increased productivity, mobilised investment, and enhanced resilience.
One point likely to spark debate is the ECB’s recommendation for a common, highly liquid, euro-wide benchmark safe asset to improve the supply of high-quality collateral. While the ECB has consistently advocated for greater joint debt issuance, some governments, notably Germany, have historically resisted such calls, opposing debt mutualisation outside of crisis situations. An ECB spokesperson declined to comment on the document.
The ECB document also reiterated its long-standing support for a joint deposit insurance scheme and a European framework for liquidity in bank resolution cases. Additionally, the ECB emphasized the need to boost retail participation in capital markets, particularly through a savings and investment account, with a focus on pension financing. The European Central Bank is the central bank of the Eurozone, responsible for the monetary policy of the countries that have adopted the euro. Its primary objective is to maintain price stability within the Eurozone.
