According to a French politician who is currently president of the European Central Bank (ECB), Christine Lagarde, Europe’s acute inflation can be blamed on climate change. During her interview with Madame Figaro, Lagarde stressed that people needed to take into account that “climate disasters” significantly affected price stability.
ECB board member Isabelle Schnabel says inflation makes it difficult for central banks to control price pressures – Christine Lagarde insists climate change should be taken into account
Last June, the euro zone’s inflation rate was 8.6% and the following month in July, the European inflation rating jumped to 8.9%. While Federal Reserve Chairman Jerome Powell pledged to tame inflation on Friday, ECB Executive Board Member Isabel Schnabel and Bank of France Governor François Villeroy de Galhau told the press there was a need for greater “sacrifice” to curb rising inflation in Europe.
“Central banks are likely to face a higher percentage of sacrifices compared to the 1980s,” Schnabel said on Friday. “Even if prices respond more aggressively to changes in domestic economic conditions, as the globalization of inflation makes it difficult for central banks to control price pressures,” the ECB Executive Board member added.
Meanwhile, Madame Figaro’s recent interview with ECB President Christine Lagarde showed that the central bank leadership believes that inflation in Europe can stem from climate change.
Largaard is not the only person who has linked inflation to alleged long-term changes in temperatures and weather patterns around the world. On August 15, The New York Times published an editorial on how specific policies can fight inflation by simultaneously fighting climate change. The Biden administration is following the same trend, with the recently implemented bill called the Inflation Reduction Act claiming to reduce inflation by combating climate change.
Largard believes that climate change has affected price stability and noted that more climate disasters could harm the global economy. Largaard insisted during Madame Figaro’s interview
“If more and more climate disasters, drought and famine occur around the world, there will be repercussions for prices, insurance premiums and the financial sector.”
The President of the European Central Bank added:
We have to take that into account.
Europe is suffering with high energy costs associated with the Ukrainian-Russian war, but a number of media publications insist that “extreme heat in the United States, Europe and China is criticizing economies around the world and making inflation worse.” Analysts also assume that Europeans may face a very harsh winter when seasons change. During the Largaard interview published on 25 August, the President of the European Central Bank was asked whether she bears “any weight of responsibility” when it comes to the bleak European economy.
Largaard observed during her interview with the French media: “Yes, absolutely.” “I still buy groceries from the supermarket, pay my own bills, including my gas bills, and meet people in the market, where life here can be removed in the ECB a little bit, separated, and punctuated by standard economic models and forecasts. I move forward with a sense of duty and humility “.