Speaking at the European Parliament plenary in Strasbourg, ECB President Christine Lagarde reaffirmed the importance of central bank independence while stressing the ECB’s accountability to democratic institutions. She warned that growing geopolitical tensions and global policy uncertainty are reshaping Europe’s economic environment, making stability and resilience more crucial than ever.
Lagarde said euro area inflation has eased significantly, standing at 1.7% in January, and is expected to stabilise at the ECB’s 2% medium-term target. According to ECB projections, inflation is forecast to average 1.9% in 2026, 1.8% in 2027 and 2.0% in 2028. Economic growth has remained resilient, with the euro area economy expanding by 1.5% in 2025. In light of this outlook, the ECB has kept interest rates unchanged, continuing a data-dependent, meeting-by-meeting approach.
Beyond price stability, Lagarde highlighted the ECB’s role in strengthening Europe’s competitiveness. She underlined the importance of preserving cash while advancing plans for a digital euro, which would offer high privacy standards, offline functionality and lower costs for merchants, while reducing reliance on non-European payment providers. She called on the European Parliament to make progress on the digital euro legislation.
Lagarde also outlined initiatives to support tokenised central bank money, including projects to enable settlement of distributed ledger-based wholesale transactions and to foster an integrated European digital asset market. In addition, she welcomed proposals to simplify Europe’s regulatory and supervisory framework to reduce unnecessary complexity while safeguarding financial stability.
She concluded by welcoming Bulgaria as the 21st member of the euro area, calling the euro a symbol of stability and successful European integration, and emphasised the need for continued dialogue between the ECB, lawmakers and EU citizens.
