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ECB next president speaks to European deputies

UNITED STATES, WASHINGTON (OBSERVATORY) — The next president of the European Central Bank (ECB), Christine Lagarde, will face her first public test on Wednesday before the European Parliament in a period of economic turmoil.

The European MPs will hear from 0830 GMT and for two and a half hours to the current director of the International Monetary Fund, who is supposed to take over as head of the European Monetary Agency on November 1.

The MPs’ voting in the evening will be formal as they have no power to block her appointment, but are expected to criticize the march of the French lady, who has been a trade lawyer and has entered the political arena with a series of financial crises since 2008.

Lagarde was director of the US law firm, Baker Mckenzie, until 2005, and was appointed by the former French president as foreign trade minister and finance minister in 2011, before taking over the IMF’s presidency in the last eight years.

All this although it did not work in any central bank, unlike those who held the position before them and other candidates for the post.

During the session, Lagarde will have to “convincingly demonstrate that she has the necessary cash experience” to fill the post, said German Conservative MP Markus Verber.

Lagarde, 63, will take over from Mario Draghi, who has made his mark on the Frankfurt-based institution by crafting new tools to save a single currency or boost the region’s economy.

Lagarde’s stated desire to “achieve consensus” within the board of governors of the European financial institution will face a rapid test. The 25-member council seems divided on the positions to take in the face of a slowing euro-zone economy.

The former French minister sees in a document presented to parliament on Thursday that her predecessor Mario Draghi is right to continue monetary generosity, although the European Central Bank failed to reach an inflation target of just under 2 percent.

But it maintains that it is keen to follow the “implications” of monetary policy on the “banking sector” whose low interest rates limit its return, and on “financial stability in general.”

But this would not be enough to allay criticism from Germany, especially of Germany, for a policy considered “too generous,” liberal MP Nicolas Pere told AFP.

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