Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Olaf Storbeck on 26 February 2026

3 March 2026

(Two questions added on 2 March 2026, following the events in the Middle East, see bottom of the text)

One defining feature of the euro area economy over the past year has been that growth has been stronger than most people expected. How surprising has this been for you, and what is driving this?

The European economy has been growing in the neighbourhood of its potential. Consumption is contributing, as expected. Government spending is also contributing, again broadly as expected. Exports are essentially a drag. Higher business investment has made the main difference. Investment is ahead of expectations, and the extra momentum is coming from AI and from the green transition, where firms and governments are upgrading their capital stock.

Some people argue that the damage to economic growth during the hiking cycle and from the trade war was less than…