Letter from the ECB President to Mr Fabio de Masi, MEP, on the economic outlook and monetary policy

Day two of the ECB-IMF Conference on Fiscal Policy and EMU Governance is now underway. Sessions focus on public debt perceptions, fiscal narratives and the fiscal implications of geopolitical tensions and war.

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By complementing cash with a digital euro, we would ensure you can pay for anything, anywhere with central bank money, Executive Board member Piero Cipollone tells @NikkeiAsia. The financial system is changing and Europe needs its own digital payment option.

The ECB-IMF Conference on Fiscal Policy and EMU Governance kicks off at 9:00 CET. Today’s sessions cover fiscal stagnation, sovereign risk and monetary-fiscal interactions, followed by a panel on priorities for European fiscal policies.

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@Lagarde President @Lagarde's introductory statement in charts

Introductory statement by President Christine @Lagarde at the hearing of the Committee on Economic and Monetary Affairs of the European Parliament

Lagarde: It is essential to create the right conditions for Europe’s sources of economic strength to reach their full potential, most notably by making the Single Market truly single.

Lagarde: Effective monetary policy transmission across the euro area is crucial for delivering on our price stability mandate. We have developed tools to safeguard the smooth transmission of our monetary policy.

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Lagarde: We expect inflation to stay close to our target in the coming months.

Lagarde: The economy grew by 0.2% in the third quarter of 2025, supported by robust domestic demand. Economic activity should benefit from higher household spending and a resilient labour market, where labour force participation is at its highest since the start of the euro.

President Christine @Lagarde: Technological, geopolitical and structural changes have redefined our economic landscape in recent years. These shifts underscore the need to improve Europe’s resilience and competitiveness, and build lasting economic strength.

Live now: President @Lagarde speaks before the Committee on Economic and Monetary Affairs of the @Europarl_EN and answers questions from its members. Follow here https://t.co/ONr37ss3Sm @EP_Economics

The ECB-IMF Conference on Fiscal Policy and EMU Governance takes place tomorrow in Frankfurt. Academics, central bankers and market experts will discuss fiscal stagnation, sovereign risk and how monetary and fiscal policies interact.

Chief Economist Philip R Lane discusses the appropriate monetary policy response to deviations of inflation from the ECB’s symmetric two per cent medium-term target. He also outlines some analytical perspectives on the interplay between the exchange rate and monetary policy.

How did euro area bank interest rates evolve in October? How do they compare with September’s figures? Find out more in the press release https://t.co/FaS0iybqFN

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Tune in at 14:30 CET to watch President Christine @Lagarde speak before the Economic and Monetary Affairs Committee of the @Europarl_EN and answer questions from its members. Follow the webcast here https://t.co/ONr37ss3Sm @EP_Economics

The euro area economy is resilient to shocks, Vice-President Luis de Guindos tells @elperiodico. A lack of transparency and supervision in the non-bank sector can pose a risk. A single, integrated vision is essential to safeguard financial stability.

Geopolitical tensions such as the war in Ukraine have shaken Europe’s economies. Understanding the economic impact of such shocks is crucial for monetary policy. This ECB Blog post presents a news-based indicator that tracks country-level geopolitical risk.

Structural challenges like geopolitical fragmentation, demographic shifts, technological change and cyber threats shape the risk landscape for banks. We must remain vigilant and continue to improve our supervisory practices, says Supervisory Board member Patrick Montagner.