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Christine Lagarde’s Gifts to Populists

Since taking over as president of the European Central Bank in late 2019, Christine Lagarde has committed three major errors that play right into the hands of right-wing populists. Now, one can only hope that these parties' own incompetence will sink them before next year's European Parliament elections.

ATHENS – Christine Lagarde’s three blunders as president of the European Central Bank did not cause the revival of right-wing populism across Europe; but they have reinforced it mightily.

The first gaffe cost Italy billions, and the ECB many of the reputational gains that Mario Draghi, Lagarde’s predecessor, previously worked so hard to secure. Recall March 2020: The world was gripped by pandemic-induced anxiety and markets were panicking, especially about the solvency of Italy, a country with gigantic debts and no central bank of its own to print money the way the US Federal Reserve, the Bank of Japan, and even the Bank of England could do.

When asked at a scheduled press conference if the ECB would stand by Italy’s debt to contain interest-rate spreads (the difference in borrowing costs between member-state governments) within the eurozone, Lagarde did not reassure markets and the public by repeating Draghi’s famous promise to do “whatever it takes.” Instead, she did the opposite, declaring: “We are not here to close spreads.” Within seconds, Italy’s debt-servicing costs skyrocketed. While Italy’s government was apoplectic at this, populist opposition leader Giorgia Meloni, who has since become prime minister, was undoubtedly delighted.