European Central Bank chief urges governments to help growth

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Christine Lagarde president of the ECB before making a speech during the annual report 2018 of the ECB, before the European Parliament’s economic and monetary affairs committee at the European Parliament in Strasbourg, France, Tuesday Feb. 11, 2020. Lagarde warned that the world’s central banks have little room to stimulate growth in the economy as interest rates and inflation are already very low. (AP Photo/Jean-François Badias)

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FRANKFURT, Germany (AP) — European Central Bank President Christine Lagarde is urging governments to get more involved in supporting the tepid eurozone economy through targeted spending and business-friendly reforms.

Lagarde said that “”other policy areas… have to play their part” in helping the economy. She warned that monetary policy “cannot, and should not be, the only game in town.”

The remarks in front of the European Parliament on Tuesday played into a debate over the bank’s record low interest rates and money-printing bond purchases, which have been criticized in Germany for their impact on savers and potential role in inflating asset prices.

Lagarde’s answer has been that governments should focus less on balancing budgets or running surpluses and more on pro-growth spending.

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