is : what is a reasonable framework? once you ’ re in the safe zone i think that fiscal policy can be conducted differently. 5 / 6 bis central bankers'speeches germany is there now, its debt is around 60 %. all countries know that there can be many pressures on public spending in the years ahead, basically because of the ageing of the population, the rising costs of healthcare and, of course, there ’ s going to be significant pressure on the public finances from what is necessary to tackle climate change. however, in a world where interest rates are so low, i think it ’ s perfectly possible to reconcile the fact that you need to make sure that your long - term fiscal goals are achieved with the fact that the business cycle is also affected by fiscal policy. and probably this can ’ t be summarised in a single rule. historically, this was not especially relevant because the fiscal multipliers have traditionally been low. essentially, central banks would offset fiscal stimulus if it was proven to be inflationary. but in a world of low inflation and low interest rates, we think fiscal multipliers under the current conditions are quite high if you have the fiscal space. i think we should be confident that there isn ’ t really a kind of excessive trade - off between being stimulating in the short term, while still making sure that we ’ re sufficiently prudent that long - term goals can be achieved. i think that a gear shift is required. for a long time the overwhelming focus was on how to make sure the high debt levels came down. but at some point that gear shift has to happen for those countries which have been successful. in italy there is a heavy brain drain, many young people go abroad. this poses a problem for the future of the country as well. and many highly qualified young people choose france or sweden or germany because they earn much more. should italian companies raise salaries? one of the great achievements of the european union has been free movement of people – the freedom to move across borders. at an individual level, of course that ’ s a fantastic gain from being a member of the european union. but it can also be a difficult choice to make for the individuals concerned, as people by and large would like to live in their home country. governments should recognise that if opportunities are greater abroad, many will take that decision. however, if wages are not backed by productivity, they should not go up. the way i would phrase it is : countries

philip r lane : interview in la repubblica interview with mr philip r lane, member of the executive board of the european central bank, in la repubblica, conducted by ms tonia mastrobuoni on 14 november 2019 and published on 20 november 2019. * * * christine lagarde takes office as president of the ecb at a difficult moment. the governing council is split about the decisions taken in september. i wouldn ’ t agree with your description! of course, the september decision did have pros and cons, and it was not unanimous. but now we are two months on. that decision is made and we are moving forwards. moreover, at governing council level this year there are many new members. it ’ s natural, with a new composition, to have discussions about how we operate as a group. how ’ s the economic situation in the eurozone? despite fears it could slip into recession, germany ’ s growth has slightly ticked up. in germany, even though manufacturing is taking a hit, the wider economy, the consumptiondriven part of it, is still in good shape. for the euro area as a whole, remember that manufacturing only represents about 17 % of gdp. it ’ s more important in germany and in italy than it is in the wider european economy, but in the end it ’ s only a limited fraction of overall activity. we can have a lot of bad news about manufacturing, but it may still be dominated by good news coming from services and consumption. so do you think that the ecb ’ s very accommodative september package is still justified? there ’ s no doubt that, compared with 2017, there ’ s been a sustained slowdown, but in the euro area we don ’ t see a recession. the bigger issue is that the european economy has been growing more slowly than we hoped. it ’ s a disappointing performance, but not a negative one. we expect that there will be forces that help the recovery over the next year or two, including our monetary policy, which is going to contribute because it is leading to lower lending rates to firms and households. our baseline scenario is a recovery in economic performance, but we have been consistent in highlighting that there ’ s also downside risk. the oecd said recently that donald trump ’ s erratic trade wars might be the main reason for the global downturn, because they discourage investments. it ’ s a significant factor that has been here for nearly