"Crisis". The word keeps coming up in the mouths of experts. This Thursday, it was the IMF's Managing Director, nothing less, who used it. For Christine Lagarde, the eurozone is not sufficiently prepared to face the next crisis. She urged to strengthen the banking system.
"The currency union is more resilient than ten years ago. But it is not resilient enough" to emerge unscathed from "unexpected economic storms," she stated at a conference organized by the Banque de France (BdF), issuing a warning all the more serious as the global economic outlook is deteriorating.
Christine Lagarde recalled that the eurozone braved a massive storm during the global financial crisis, and another a short while later in the euro area sovereign debt crisis. "These events left painful economic scars on many households and companies, sowing the seeds of economic disparity across member countries and within," she said.
"Its banking system is safer, but not safe enough," Lagarde added, stressing that "some can rightfully argue that Europe has been slow to produce a fully developed financial ecosystem," calling it "young and incomplete".
Last February, Christine Lagarde warned that the clouds piling up in the global economic sky could trigger a "storm".