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Speaker 1: When Angela Merkel wanted somebody to lead the European Central Bank,

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Speaker 1: she decided to try to recruit the head of the

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Speaker 1: i m F, the International Monetary Fund, and she successfully

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Speaker 1: recruited Christine Leguard, who is now the head of the

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Speaker 1: European Central Bank, the first woman that had the Central Bank,

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Speaker 1: but also one of the most influential people in the

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Speaker 1: global world of finance. I had a conversation with her

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Speaker 1: about how Europe is recovering from COVID and also how

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Speaker 1: Europe is recovering from its economic slowdown. So as we

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Speaker 1: now look at the post COVID environment, what would you

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Speaker 1: say is the situation in Europe. Is Europe recovering more

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Speaker 1: rapidly or not quite as rapidly as you thought from

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Speaker 1: the COVID uh pandemic. Actually, David, Europe is recovering more

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Speaker 1: rapidly than we had anticipated, and we have as a

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Speaker 1: result of that, significantly upgraded our projections. So our projection

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Speaker 1: fall this year is plus five so it's a significant

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Speaker 1: upgrade plus four puscent four point six percent next year

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Speaker 1: and back to sort of pre COVID type of growth subsequently.

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Speaker 1: But this year is certainly going faster than we had thought,

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Speaker 1: to the point where we will have recovered two pre

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Speaker 1: COVID nineteen levels before the end of the year one.

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Speaker 1: We had anticipated it would be early twenty two at best.

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Speaker 1: It's not going to be in twenty one. Well, are

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Speaker 1: you worried about the delta variant impacting what you've just

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Speaker 1: said or the show called move variant, which is now

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Speaker 1: something that's on the horizon. It's it's very closely related.

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Speaker 1: We used to say that the best economic policy was

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Speaker 1: an accelerated vaccination rollout. Well, we are still in that

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Speaker 1: situation where vaccination matters enormously, but on that front, Europe

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Speaker 1: has done quite well. We have more than seventy of

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Speaker 1: the adult population that is completely vaccinated in the your area,

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Speaker 1: and some countries are doing actually better than that. In

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Speaker 1: excess of that, that has been a significant boost for

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Speaker 1: growth and it has helped governments not go back to

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Speaker 1: the stringent containment measures that we had seen previously. So

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Speaker 1: during COVID, were you working remotely? I mean, were you

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Speaker 1: running the European Central Bank from one of your homes

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Speaker 1: or from a home somewhere, or were you really going

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Speaker 1: into the office. I spent quite a few weeks stuck

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Speaker 1: in my Frankfurt apartment during the first wave of COVID,

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Speaker 1: and actually the very sizeable package that we put together

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Speaker 1: for monetary policy purposes was engineered around my kitchen table. Subsequently,

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Speaker 1: when traveling was more flexible and we could move out,

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Speaker 1: then I went to the office a bit. But in

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Speaker 1: the main, you know, the the by default solution is

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Speaker 1: remote working still today and probably until the end of January,

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Speaker 1: and then we will see, well you should take that

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Speaker 1: kitchen table move at your office obviously was very productive, right,

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Speaker 1: So let me ask you post COVID, do you expect

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Speaker 1: Europeans will go back to work at the same levels

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Speaker 1: before in terms of coin to work five days a

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Speaker 1: week or where people work four days a week, one

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Speaker 1: day remotely or just four days a week of work.

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Speaker 1: You know, first of all, we should all acknowledge that

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Speaker 1: there are people who do not have the luxury of

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Speaker 1: choice that have to go to work because their physical

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Speaker 1: presence is required. You know, you think about hospital staff,

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Speaker 1: you think about construction workers, you think about some people

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Speaker 1: working in shops. They don't have the choice. They have

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Speaker 1: to be on site and at work and showing up

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Speaker 1: in you know, offices. I think we are heading towards

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Speaker 1: a hybrid movement where part of the week will be

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Speaker 1: spent in the office so that people can meet, can

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Speaker 1: see each other, can hold regular meetings, and and have

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Speaker 1: face to face contact, but the rest of the week

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Speaker 1: will likely be working from home. So whether it's fifty,

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Speaker 1: whether it's is up for debate, and it's going to

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Speaker 1: be handled at company levels, I suppose, because most of

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Speaker 1: the legal constraints have been lifted at this point in time.

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Speaker 1: But people have learned during the pandemic and those learnings

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Speaker 1: will be bottled in and used for future, for future

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Speaker 1: way of working. So around the kitchen table that we

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Speaker 1: just made famous, you were talking about you put together

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Speaker 1: a package that was designed to make Europe solve their

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Speaker 1: economic problems as it dealt with COVID. The United States

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Speaker 1: had a similar package. Um in hindsight, would you say

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Speaker 1: the package worked as well as you thought, not as

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Speaker 1: well or better than you thought. Yeah, you know, when

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Speaker 1: we put it together, we we were hopeful that it

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Speaker 1: would work. But you you know, the truth of the

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Speaker 1: pudding is in the eating, and it was a matter

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Speaker 1: of days before we really appreciated that message was received.

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Speaker 1: Fiscal authorities began to act in tandem and in good

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Speaker 1: coordination as well. And I think the impact of Next

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Speaker 1: Generation EU when all Europeans decided to go and borrow

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Speaker 1: together jointly, this this, this entire package actually responded well

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Speaker 1: and fast and big to the unbelievable crisis situation that

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Speaker 1: we faced. So all in all, I think it worked well,

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Speaker 1: and it's certainly we responded I think faster and better

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Speaker 1: than we had in two thousand and eight and then

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Speaker 1: in two thousand eleven in the European sovereign debt crisis.

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Speaker 1: In the United States, not just AIG the United States

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Speaker 1: all the time, but it's the country I'm most familiar with.

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Speaker 1: We've had some challenges during COVID that people who were minorities,

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Speaker 1: often women, people of lower income strata, they couldn't get

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Speaker 1: access to broadband, they didn't have that, and they had

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Speaker 1: childcare problems and so forth, and it's thought that they

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Speaker 1: fell further and further behind. Did you find the same

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Speaker 1: phenomenon in Europe. Yeah, this has been the case in

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Speaker 1: Europe as well, where inequalities in terms of opportunities, in

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Speaker 1: terms of facilities have been aggravated and probably exacerbated by

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Speaker 1: COVID ninety for the reasons that you've mentioned, those people

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Speaker 1: who was hit by pandemic, where women, where young people,

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Speaker 1: where people on fixed uman temper contracts, and and those

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Speaker 1: you know, we're more remote from work than than the others.

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Speaker 1: And if you look at those who lost their jobs,

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Speaker 1: it's predominantly those, those women and young people in particular,

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Speaker 1: in disproportionate amount relative to the others. So as you

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Speaker 1: look at the European economy today, what would you say

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Speaker 1: it's single biggest challenges and what would you say it's

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Speaker 1: single biggest opportunity is I think the single biggest challenge

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Speaker 1: always is to deliver, is to implement. There lots of

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Speaker 1: good intentions, but implementation sometimes is hard. I think the

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Speaker 1: second difficult area that will need to be tackled is

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Speaker 1: this issue of inequality, because COVID nineteen has aggravated inequalities.

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Speaker 1: The third one is climate change, where we will have

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Speaker 1: to transition probably faster than we think, which will imply

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Speaker 1: transition cost, which will imply a change in the overall

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Speaker 1: structure of our economies. I would say those three implementation,

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Speaker 1: inequality and and climate change. And what has been the

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Speaker 1: impact on the European Central Bank or the European economy

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Speaker 1: if any on Brexit, has it been as bad as

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Speaker 1: some people predicted, or have been better than people thought?

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Speaker 1: What would you say? I think the conclusion varies depending

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Speaker 1: on which side of the channel you're on. You know,

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Speaker 1: from our perspective it it's a sad development and we

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Speaker 1: certainly have lost the benefits of excellent cooperation with the

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Speaker 1: Bank of England. We try to continue to maintain a

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Speaker 1: good relationship because because you know, we have lots of

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Speaker 1: links between us. But in terms of trade it has

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Speaker 1: been certainly a loss for the UK more so than

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Speaker 1: for Europe, and and we'll see how it goes. All

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Speaker 1: I can say is at this point in time, Europe

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Speaker 1: is coming out of the crisis. Were not with flying

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Speaker 1: colors yet because a lot of work needs to be done,

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Speaker 1: but strongly than we had expected. I think the UK

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Speaker 1: is having a more difficult time at the moment. Part

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Speaker 1: of the you help deal with the situation in Europe

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Speaker 1: post during COVID was that you had the package that

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Speaker 1: you referred to a very large package of financial stability package.

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Speaker 1: But that package really involves countries borrowing money against against

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Speaker 1: their their own abilities to pay it back. You are

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Speaker 1: in effect not a guaranteur, but you are making certain

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Speaker 1: that that they probably won't default. But are you worried

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Speaker 1: about too much debt among European countries, too much debt

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Speaker 1: in France or Germany or Italy or is that not

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Speaker 1: a big problem right now? You know? I think all

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Speaker 1: countries around the world increase and had to increase the

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Speaker 1: debt relative to GDP. And when you had this high

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Speaker 1: debt increase and and a big fall in GDP, for

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Speaker 1: of course, you end up with those ratios that look

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Speaker 1: that look um higher and are higher than what they

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Speaker 1: experienced before. But there was no option and no choice

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Speaker 1: but to do that. Um how did it not happened?

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Speaker 1: I think the story of the pandemic could have been

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Speaker 1: a lot worse than what we've seen. So now it's

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Speaker 1: a question of directing the the financing to the right investment,

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Speaker 1: making sure that the economies are going to bounce back

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Speaker 1: in the right shape with the right structural reforms that

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Speaker 1: will improve the productivity of those economies, that would position

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Speaker 1: them to be more digital and to to be to

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Speaker 1: be greener. And I believe that this next Generation EU,

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Speaker 1: which was voted a year ago now is going to

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Speaker 1: help with making countries better converge and reduce the gap

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Speaker 1: that existed between some of the southern European countries and

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Speaker 1: the Northern European countries. That is certainly the intention. Recently,

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Speaker 1: you said that you would like to have a goal,

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Speaker 1: a target of getting two percent inflation. Why has it

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Speaker 1: been so difficult to get to that level for the

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Speaker 1: last five, six or seven years or so in Europe?

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Speaker 1: And how confident are you that you can get to

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Speaker 1: two I think there multiple reasons for that, David, But

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Speaker 1: certainly what we decided to do was to have a

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Speaker 1: target which was simple, which was easy to understand, that

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Speaker 1: was a symmetric, and that also was focused on the

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Speaker 1: medium terms. So those were the three attributes. So instead

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Speaker 1: of having that complicated close to but below two percent,

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Speaker 1: which was a bit uncertain and fuzzy, and which included

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Speaker 1: somehow an implied biased, we decided that we would go

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Speaker 1: for something straightforward simple two percent, two percent symmetric, so

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Speaker 1: deviation up or down from two percent are equally undesirable.

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Speaker 1: That's the definition that we have agreed upon. And we

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Speaker 1: are also on on this medium term, which matters more

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Speaker 1: us because we are particularly concerned about inflation expectations. I

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Speaker 1: think that's that decision plus the forward guidance that we

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Speaker 1: also decided a few weeks after the strategy review of

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Speaker 1: the European Central Bank was released, was convincing enough so

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Speaker 1: that markets and and analysts and observers have appreciated that

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Speaker 1: we are serious women in business. We want two percent.

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Speaker 1: Uh And you know, I mean there are lots of

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Speaker 1: subtilties around the two percent and the lower band, which

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Speaker 1: which leads us to having a more forceful response in

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Speaker 1: some instances. But yes, women in business, and we mean

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Speaker 1: two percent for sure. So for hundreds of years, governments

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Speaker 1: and central banks have issued currency, and the currency is

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Speaker 1: used for things to buy things, sell things, and so forth,

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Speaker 1: enter price assets. Now some people have come along and

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Speaker 1: invented various things called cryptocurrencies. Central banks are trying to

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Speaker 1: adjust to what that means for am So do you

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Speaker 1: think that cryptocurrencies are a plush for the global economy

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Speaker 1: or is it too early to tell? Cryptos are not

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Speaker 1: currencies full stop. Cryptos are highly speculative assets that claim

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Speaker 1: their fame as currency. Possibly, but they're not. They are not.

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Speaker 1: I think we have to distinguish between cryptos that are

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Speaker 1: those highly speculatives um suspicious occasionally and high intensity in

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Speaker 1: terms of energy consumption assets, but they're not a currency.

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Speaker 1: On the other hand, you have those stable coins that

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Speaker 1: are beginning to proliferate, which some big texts are trying

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Speaker 1: to promote and push along the way, which are a

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Speaker 1: different animal and need to be regulated where there has

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Speaker 1: to be oversight that corresponds to the business that they

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Speaker 1: are actually conduct irrespective of how they um name themselves.

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Speaker 1: And in all that, you have the central banks who

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Speaker 1: are prompted by demand of customers to produce something that

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Speaker 1: will make these the central bank and central bank currencies

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Speaker 1: fit for the sanctuary we're in, which is why we're

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Speaker 1: not all looking at CBDC central bank digital currencies, so

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Speaker 1: that instead of having banknotes and cash in our pockets

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Speaker 1: are in our wallet, we can have exactly the same

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Speaker 1: thing but in a digital form. So all of us

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Speaker 1: are working on this, and certainly I was keen to

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Speaker 1: that we have to stand ready for that. So if

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Speaker 1: the ECB, like the Federal Reserve, also looking at it,

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Speaker 1: If the ECB were to have a digital currency, would

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Speaker 1: that be to the exclusion of paper currencies, or it

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Speaker 1: would be up side by side, side by side, because

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Speaker 1: we want customers to have their preference. If they still

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Speaker 1: want to hold those banknotes and cash, fine, and it

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Speaker 1: should continue to be available and a run. You serve

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Speaker 1: two terms at the head of the IMF, and you

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Speaker 1: could have shared another term if you'd wanted to do so.

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Speaker 1: How do you compare the pleasure of running the i

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Speaker 1: m F with the pleasure of running a European the

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Speaker 1: European Central Bank. Is one more enjoyable than the other,

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Speaker 1: or one's less enjoyable than the other, or basically they're

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Speaker 1: both great jobs and you're happy you have had both

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Speaker 1: of them. Maybe I'm extremely privileged to have had the

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Speaker 1: role that I had as head of the IMF, and

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Speaker 1: we saw each other quite often in those days, and

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Speaker 1: you know how much I put my heart, my brain

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Speaker 1: and I've enjoyed it tremendously. I'm doing the same thing

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Speaker 1: with the CB, and I'm doing the same thing on

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Speaker 1: the European scene. And you know, it's in times when

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Speaker 1: you see geo political opposition, in times when you see

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Speaker 1: some some energy withdrawn behind im borders. It's important to

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Speaker 1: have this this desire to unite and to bring consensus

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Speaker 1: to the table and to um you know, convince people

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Speaker 1: that what we're doing together united is going to be

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Speaker 1: stronger than what we will do individually in our little corner.

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Speaker 1: So I'm enjoying what I'm doing as well. It's hard.

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Speaker 1: It's hard, let's face it, but but I'm enjoying it well.

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Speaker 1: When you were the head of the i m F,

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Speaker 1: you were the first woman to hold that position. Now

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Speaker 1: you're the first woman to hold the position of the

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Speaker 1: head of the European Central Bank, so you've obviously broken

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Speaker 1: through in many cases. You also the head of your

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Speaker 1: law firm and your first woman that had your law firm,

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Speaker 1: a large international law firm. At this point in your life,

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Speaker 1: do you feel discrimination against you in your professional life

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Speaker 1: as a woman or do you think discrimination generally is

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Speaker 1: received against women in the professional workplace. I think discrimination

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Speaker 1: has not receded, David, and I'm not I don't want

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Speaker 1: to take my personal situation because when you have traveled

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Speaker 1: the journey I have traveled, it's difficult to hold open

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Speaker 1: discrimination against me. Let's face it, but I'm very very

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Speaker 1: much aware of discriminations against many women, many young women,

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Speaker 1: many women in all parts of the world. And I'm

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Speaker 1: particularly I'm sorry to say, I'm particularly thinking of the

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Speaker 1: Afghan woman at the moment, who clearly are suffering the

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Speaker 1: worst possible nightmare and sent back in in in the

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Speaker 1: in their history and in their life. So it's a

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Speaker 1: constant struggle. It should be a constant fight of all

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Speaker 1: of us to make sure that everybody has a chance

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Speaker 1: to accomplish their talent and to develop they they the

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Speaker 1: activity in the way they want. And this is certainly

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Speaker 1: not the case yet. And look when I sit at

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Speaker 1: my governing council table and I look around, I see

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Speaker 1: twenty three men and one woman in add and to me,

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Speaker 1: so two to twenty three is not a very good ratio.

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Speaker 1: And in the finance world, I don't know whether you

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Speaker 1: would call it discrimination, but there is certainly disparity between

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Speaker 1: men and women. If you look at the venture capital world,

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Speaker 1: it's the same. If you look at CEOs of large

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Speaker 1: international banks, it's the same. If you look at Parliament,

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Speaker 1: you have a much lower representation of women than they

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Speaker 1: all women in society. So something is not working. Now.

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Speaker 1: Central bankers are famous for not talking in language that

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Speaker 1: the average person can understand generally, and sometimes they've done

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Speaker 1: that on purpose. You talk in a language that everybody

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Speaker 1: seems to understand. It's very simple and so forth. Is

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Speaker 1: that a conscious policy that you have that kind of

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Speaker 1: makes what you're doing understandable to the average person. Yes, yes, David,

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Speaker 1: I think I think it's it's extremely important that people

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Speaker 1: understand what we're doing. A lot has to do with trust.

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Speaker 1: If some but it talks to you in a completely

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Speaker 1: obscure and jargonic language, how are you going to trust

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Speaker 1: that person? So it's it's to me it was critically

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Speaker 1: important to agree with the Governing Council members that we

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Speaker 1: would communicate in a more understandable, in a clearer and

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Speaker 1: simpler way. So, just to give you an example, after

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Speaker 1: each Governing Council we issue a monetary policy statement, well,

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Speaker 1: we committed to keep sentences short, to have one idea

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Speaker 1: of a sentence, to make sure that the you, the

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Speaker 1: words that we use are understandable by you, of course,

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Speaker 1: but a normal person as well, and uh and and

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Speaker 1: we measure that and we try to stick to those

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Speaker 1: principles and and will be held accountable. So do you

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Speaker 1: think your ability to do that, and the Federal Reserve

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Speaker 1: Chairman j pal is interested in that as well. Both

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Speaker 1: of you are trained as lawyers, um, so do you

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Speaker 1: think that lawyers. I'm trained as a lawyer too. Do

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Speaker 1: you think there's a greater future for central bankers to

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Speaker 1: be headed by are to be lawyers and there's some

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Speaker 1: hope for me to be a central banker someday or not? Really,

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Speaker 1: I'm sure you would thrive. And I think I think

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Speaker 1: I strongly believe in diversity, David, as you know, and

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Speaker 1: the diversity has not all to do with gender, with minority,

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Speaker 1: with the sexual orientation or whatever. It also has to

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Speaker 1: do with the background, with the training, with the culture

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Speaker 1: that you carry with you, and to bring it all

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Speaker 1: together around the table with diversity, in my view, improves

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Speaker 1: the quality of the decisions that we make. And I

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Speaker 1: learned a lot from my colleagues, brilliant economists, and I

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Speaker 1: hope they can be patient with us poor lawyers. Two

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Speaker 1: final questions. One, I would like to know what is

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Speaker 1: the pleasure of being the head of the Central Bank.

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Speaker 1: You obviously have to work seven days a week. You

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Speaker 1: did that for many years in your career. The map

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Speaker 1: as well what is the pleasure you get out of

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Speaker 1: heading the European Central Bank? And it's the same kind

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Speaker 1: of pleasure that I take in leading other organizations. Is

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Speaker 1: making sure that people around me are doing the best

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Speaker 1: they can for the organization, are delivering on their mission,

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Speaker 1: and that reform a team heading in the same direction,

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Speaker 1: so that that to me means an awful lot. So

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Speaker 1: my final question is really this, You, as in your youth,

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Speaker 1: were a synchronized swimmer where you have to I guess,

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Speaker 1: work very closely with teammates and get everything working together

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Speaker 1: quite nicely. Um, is it the case that when you're

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Speaker 1: you're doing the central banking role you have to have

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Speaker 1: the same kind of skill set. You've got all these

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Speaker 1: central bankers that are of each country, you have to

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Speaker 1: get them to work together. So do you think you're

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Speaker 1: synchronized swimming skills actually come to help you as the

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Speaker 1: head of the European Central Bank? Yes, they do, actually,

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Speaker 1: because what you learn in synchronized swimming is that, uh,

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Speaker 1: if each individual is brilliant, it's great, but if they

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Speaker 1: don't work together, you will not get the gold medal.

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Speaker 1: So working together as a team actually matters enormously. And

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Speaker 1: I've tried, and I will try to continue doing so.

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Speaker 1: Thanks for listening to hear more of my interviews. You

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Speaker 1: can subscribe and download my podcast on Spotify, Apple, or

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Speaker 1: wherever you listen