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In first speech as ECB president, Lagarde lauds key critic

In first speech as ECB president, Lagarde lauds key critic
European Central Bank's President Christine Lagarde arrives at the ECBs headquarter in Frankfurt, Germany, November 4, 2019. REUTERS/Ralph Orlowski -
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RALPH ORLOWSKI(Reuters)
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BERLIN (Reuters) – European Central Bank President Christine Lagarde showered praise on one of the bank’s top critics on Monday, using her first speech since taking over at the ECB to signal a willingness to work with all sides.

In a speech that did not touch on monetary policy, Lagarde honoured former German Finance Minister Wolfgang Schaeuble’s commitment to a united Europe and his statesmanship since the fall of the Berlin Wall, which allowed a divided Germany to reunite.

Schaeuble, now the President of the Bundestag, often criticised the ECB when finance minister and the two Germans on the ECB’s Governing Council regularly opposed former ECB chief Mario Drahgi’s loose monetary policy.

Although Lagarde avoided the issue of the bank’s long-running feud with Germany, her decision to speak in Berlin days after taking office on Nov. 1 is likely to be seen as a symbolic olive branch and a signal that she is willing to mend ties.

Germany has long accused the ECB, the central bank for the 19-country euro zone, of hurting German savers by keeping interest rates too low.

The ECB has argued that if only Germany invested more instead of running budget surpluses year after year, economic growth would accelerate and rates could rise more quickly.

While Lagarde has not discussed monetary policy in detail since she was appointed in the summer, initial hints suggest she plans no major changes until the ECB can conduct a broad review of its policy, target and tools.

(Reporting by Michael Nienaber and Reinhard Becker; Writing by Balazs Koranyi; Editing by Catherine Evans and David Clarke)

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