The role of president of the European Central Bank (ECB) is vitally important for the prudent management of the euro. A tricky task when it is used in nineteen countries with widely-divergent economies.
Until last week the role was filled by Mario Draghi and under his management trillions of extra euros were created and mainly used to fund government borrowing and EU industries through buying their bonds. This was intended to have the effect of getting businesses to expand.
On Friday Christine Lagarde started her eight year term as ECB president – and set out with a commitment for further euro printing. But that was arranged by Draghi before he left. An unusual move in the circumstances – and one that was opposed by seven of the twenty-five strong governing council. A body that reflects that basic problem with the EU – the differences between the financial policies needed in, for example, Greece and Germany. It is also a body that Mde. Lagarde will need for help – since she lacks any central bank experience herself.
But that never stopped her at the IMF so the chances are that the euro will not fall into terminal decline – despite various predictions in recent years. Just as long as the Germans can keep their economy buoyant … and stick with the euro.