Christine Lagarde warns of Europe’s energy dependence, price hikes and the need to accelerate the green transition for sustainable growth.
At a time of intense geopolitical pressures and energy instability, Christine Lagarde sounds the alarm on the future of the European economy, highlighting the deep structural problems caused by dependence on fossil fuels. The head of the ECB points out that the current energy model not only burdens households and businesses through increased prices, but also undermines Europe’s long-term competitiveness, making it urgent to accelerate investment in renewable energy sources, strengthening energy independence and adopting more efficient policies that balance growth with climate sustainability.
The energy regime in Europe is “clearly unsustainable”, European Central Bank (ECB) President Christine Lagarde warned today, as the continent suffers the large increase in the price of fossil fuel energy, which is largely imported.
The dangerous dependence
Europe “imports around 60% of its energy, almost entirely from fossil fuels”, a dependence whose economic cost is once again being shown, Christine Lagarde underlines in a speech delivered in Frankfurt at the opening of a conference co-organised by the ECB, the private University of Frankfurt and the Cetex research centre in London.
In this context, which puts a burden on households and businesses, alternative energy sources “offer the most obvious route” to reducing the arbitrage between the key objectives of European energy policy, namely security of supply, environmental sustainability and affordability, according to Lagarde.
Internal ECB analyses show that European countries whose electricity generation relies more on non-fossil sources, such as Spain and Portugal, were better protected from rising gas prices.
The world needs “impartial” analysis
But, according to the central banker, “the way we approach the transition is also important.”
This involves “finding the most cost-effective pathways at the economic level” to promote both growth and decarbonisation.
Since the Paris climate agreement was signed in 2015, with the goal of limiting global warming to 2°C or even 1.5°C compared to pre-industrial times, the world has experienced the decade “the warmest on record”, Lagarde recalled.
It appears, according to Lagarde, that “the overall response, on the part of governments as well as societies as a whole, has fallen short of what the situation demands.”
One of the reasons is that “climate change – a phenomenon imposed regardless of political positions – has become a partisan issue in its own right,” Lagarde stressed.
People therefore need an “impartial” analysis in order “to select relevant information ignoring unnecessary noise and to help those making political decisions as well as citizens understand the signals and what is at stake.”
</html
