Lagarde: energy is the main threat, France's debt is serious, and she may leave a few months early
Serguey Asael Shinder2 min readChristine Lagarde gave an interview to the French daily La Croix, conducted on 16 and 28 September and published in English by the European Central Bank on 30 September. It is one official's interview, not a Governing Council decision, and covers the economy, France and her own term.
The threat she names. For the ECB, she said, price stability remains the priority, and the main threat today is the energy crisis linked to the conflict in the Middle East, which weighs on both prices and growth. Crises no longer follow one another but are interconnected and reinforce each other. Europe's economic model rested on three pillars, cheap energy notably from Russia, the Chinese market for exports and the US security umbrella, and all three are being shaken.
On the rate rises. Asked about the ECB's increases in June and September, she said a central bank cannot reopen the Strait of Hormuz or create new oil and gas reserves. Its task is to stop a supply shock from feeding through the economy durably and driving up inflation, which may lead it to raise rates at the risk of weighing on growth; that is why it looks very closely at activity before acting. She also said the ECB was wrong in 2021 to treat the energy shock as temporary.
On France. She declined to comment on individual countries but gave the ECB's growth expectations for this year: 0.9% for the euro area and 0.5% for France. Debt close to 120% of GDP and not on course to be brought under control is serious, she said, especially as governments compete with large private financing needs, including for artificial intelligence. She added that it is not 2008 or 2011 because the European financial system is much stronger, and called cancelling part of the debt technically uncertain, financially very dangerous and a violation of the EU Treaties.
On her term. Her mandate ends in October 2027. She said she does not rule out leaving a few months early but has announced nothing, will still be in office in 2027, and that any early departure would only be a matter of months. She ruled out standing in France's 2027 presidential election.
What it means
The interview adds no new policy signal; the reasoning on rates is the one the ECB gave when it raised them. Its news value is in two figures, the 0.9% and 0.5% growth expectations, and in the timing remark. La Croix linked a possible early exit to France's spring 2027 election; she answered only that it will be for the French government in office at the time to argue its preference with the other leaders.