Europe’s new growth model: turning size into scale

Christine Lagarde, President of the European Central Bank, delivered the acceptance speech for the 2026 Paul A. Volcker Lifetime Achievement Award at the 42nd Annual NABE Economic Policy Conference in Washington DC, United States.

She reflected on the influence of individuals versus institutions in shaping history, citing Paul Volcker’s decisive actions in the 1980s that transformed central banking and emphasized the importance of culture and conviction in maintaining independence.

Lagarde highlighted Europe’s decision-making structure, noting that despite its size, the ECB’s Governing Council’s diversity strengthens its independence and resilience, especially during crises such as the pandemic and energy shocks.

She discussed Europe’s evolving capacity to act on structural issues, including demand composition, supply-side innovations, and internal market reforms. Recent shifts show increased domestic demand, investment in defense, infrastructure, and digital sectors, and a move towards greater market integration.

Lagarde emphasized that small policy changes could unlock significant growth potential, citing examples of intra-EU trade, capital market reforms, and the importance of acting at scale. She concluded that Europe’s ability to adapt and innovate is within reach, and decisive action is increasingly possible without crisis pressure.

She reaffirmed confidence that Europe can address its longstanding structural weaknesses through collective effort and reform, moving beyond rules-bound limitations to achieve sustained growth and resilience.

For more information, visit the original source at ECB official website.