Ahead of Trump's Election... ECB President Faces 'Major Challenges' Including Digital Euro

ECB President Sets Inflation Stability and Digitalization as Goals

Eurozone Ahead of Trump's Inauguration... Inflation Concerns Grow

Christine Lagarde, President of the European Central Bank (ECB), stated in her New Year's message that "there are very important challenges ahead for the ECB this year."

On the 1st (local time), President Lagarde presented the review of monetary policy strategy, the introduction of the digital euro, and the redesign of euro banknotes as major tasks for the ECB this year through a video of about 2 minutes on social media. President Lagarde said, "We made significant progress in lowering inflation last year," and "I hope this year will be a year where we achieve our goals as expected and according to our strategy." She added, "We will continue to strive to keep inflation stable at the medium-term target of 2%."

Regarding the introduction of the digital euro, a Central Bank Digital Currency (CBDC) with the same value as physical currency, President Lagarde explained, "We are currently in the preparation stage and waiting for legislation," and "Once the bill is passed, we will decide whether to proceed." She added that the redesign of euro banknotes is also planned but will not be completed within this year.

Ahead of the inauguration of U.S. President Donald Trump on the 20th, concerns about the possibility of intensified inflation in the Eurozone (20 countries using the euro) are growing. President Lagarde warned last month, "The risk of trade friction could weaken exports and the global economy, putting a burden on Eurozone growth," and "If trade conflicts intensify, the Eurozone's inflation outlook will become even more uncertain." Political instability is also increasing due to the collapse of coalitions in Germany and France.

Reporter Da-yeon Lim allopen@hankyung.com