Martin Wolf interviews Christine Lagarde: Whither Europe?

In this episode, we hear from Christine Lagarde, the President of the European Central Bank, as she delves into the rising inflation, the economic performance of the Eurozone, and the challenges Europe faces. Lagarde points to a series of interconnected shocks as the main drivers of inflation, while also acknowledging some possible policy errors along the way. Despite these challenges, she remains hopeful that inflation is approaching the ECB's target and highlights the unexpected resilience of the job market during the disinflation process. Looking forward, Lagarde emphasizes the necessity for a stronger capital market union in Europe and addresses the concern that the Eurozone is lagging behind the US. She stresses the importance of attracting and keeping talent, allocating capital effectively, and promoting innovation. Lastly, she advocates for Europe to engage in strategic negotiations with the US rather than seeking retaliation, and to navigate its complex relationship with China.