Lagarde criticises Germany for low spending

Incoming European Central Bank chief Christine Lagarde on Wednesday took aim at Germany and other thrifty eurozone members running budgetary surpluses, saying they should increase their spending to shore up slowing growth. Lagarde told France's RTL radio that whereas eurozone members had successfully coordinated their fiscal policies to save the bloc during the 2008-2009 sovereign debt crisis, "since then the countries which have budgetary space have not really made the necessary efforts."

She argued that "countries with chronic budget surpluses like the Netherlands and Germany", needed to loosen their purse strings to redress the "imbalances" in bloc, by investing more in infrastructure, education and innovation. The comments are a possible indication of the assertive stance that France's Lagarde, a hugely respected figure who was IMF chief from 2011-2019 but has no previous central banking experience, plans to take in the key job. For the past five years, Germany, Europe's biggest economy, has consistently posted budget surpluses, testament to the strict fiscal discipline of Chancellor Angela Merkel's government.