christine lagarde : challenges along europe ’ s road speech by ms christine lagarde, president of the european central bank, at the international conference to mark the 30th anniversary of banka slovenije, ljubljana, 11 may 2022 * * * it is a pleasure to be in ljubljana today to discuss “ the road already travelled and contemporary challenges ”. europe can learn a great deal from the journey of slovenia in recent decades. the country has faced and overcome serious challenges over the years : its independence from yugoslavia ; joining the eu ; adopting the euro ; overcoming the crisis that erupted in 2013 ; and now the pandemic overlayered with russian war against ukraine. but time and again, slovenia has risen to the challenge and excelled. it has become an integral part of european value chains, with intra - eu trade accounting for over two - thirds of slovenia ’ s exports. it has shown resilience in the face of difficulty : for instance, its economy bounced back from the 2013 crisis to post robust growth rates before the pandemic. what proved crucial was slovenia ’ s steadfast commitment to its goal, as well as its flexibility to travel the journey towards the heart of europe. commitment and flexibility are the two yardsticks that i will apply to two challenging episodes that the whole of europe, and particularly the euro area including slovenia, has faced in the last decade. in that period, europe has faced repeated shocks, each one different. in this respect, we can sympathise with the words of the great slovene poet, france preseren. he once wrote of a man “ who from fate receives but blow on blow ”. throughout all these challenges, we at the ecb have remained committed to always fulfilling our mandate, whatever the circumstances. but, within our mandate, we have shown the necessary degree of flexibility. and so has europe. let us focus on each of the two episodes : first, the euro area crisis and the long phase of too - low inflation that it spawned ; and second, more recently, the return of a phase of higher inflation. from crisis to low - for - long inflation the great financial crisis and the sovereign debt crisis delivered a much greater shock to the euro area than to other major economies. this was so because those crises had revealed – and exacerbated – the underlying weaknesses in the institutional architecture of the union. in particular, we saw that a monetary union cannot be stable – and a currency truly single –

coordinated position in terms of the fiscal policy instruments employed by the eu in response to this huge crisis. the economic impact will be enormous. we just hope that it will be temporary. we have to take all the necessary measures to ensure that our economic fabric is not destroyed, to ensure that businesses that are solvent can survive and that once this urgent health crisis is over, they can return to normal. you have talked about a temporary crisis, a sort of pause. the spanish government has talked about the same thing. but do you think this is how things will turn out or do you think the economic consequences for europe could be more severe for longer? this will depend on how long the health crisis lasts and, to be honest, i wouldn ’ t dare to guess how long it might last. what happened in china is a leading indicator. what ’ s happening to us now happened two months ago in china and now they are starting to get back to normal. obviously this is something that gives us hope : we can get through this. from an economic perspective, we have to look for instruments to get us through this period at the lowest economic cost and, of course, with no financial cost from a debt market perspective. 1 / 1 bis central bankers'speeches