Interview with Christine Lagarde, President of the ECB, conducted by Petri Sajari

25 February 2023

President Christine Lagarde, the European Commission said last week that the euro area is set to narrowly avoid a technical recession. Before that, a recession was expected at the turn of the year. So how confident are you that recession is now avoidable in the euro area?

The most recent projections from both the IMF and the European Commission suggest that there will not be a recession in the EU or the euro area this year.

But there is a lot of uncertainty, and one central question is where the war is heading. Another big question is how the lifting of COVID restrictions in China will affect its economic recovery and the global economy. Wage negotiations and fiscal support will also play an important role.

What do you think are the main reasons for the better-than-anticipated economic developments in the euro area?

The euro area has benefited from a warm winter, which on the other hand is not a good thing as such because it is a manifestation of climate change. The energy saving measures and the solidarity between euro area countries have also played their part.

What do you mean by solidarity?

European countries have responded to President Putin’s unlawful and unjustified war by working better together. We will no longer buy Russian oil, and gas imports from Russia have gone down radically. Governments, such as Austria and Germany, Estonia and Finland, have been cooperating on…