European Central Bank (ECB) President Christine Lagarde said on Friday that the pandemic provides an opportunity to harness new technologies, and urged policymakers and the industry to support innovation and invest in education, areas that benefit sustainable growth in the long run.
Lagarde made the remarks at the 30th Frankfurt European Banking Congress, which took up the theme “towards a new sustainable growth model”.
Lagarde said Europe would face many challenges in the coming years arising from both the pandemic and long-run trends, including increasing debt levels, demographic aging, digitalization and climate change.
The pandemic has accelerated a wider and more common use of digital technology, Lagarde said. To achieve sustainable growth in the long run, it will be vital for Europe to harness the opportunities offered by new technologies, she noted.
To further unleash Europe’s potential in innovation, Lagarde said, governments need to remove barriers for innovative firms and allow them to take full advantage of the Single Market and achieve economies of scale.
In addition, the financial sector should play a role in offering early-stage financing, and the public sector could also help to link research and teaching more closely with innovation ecosystem, she added.
For education, Lagarde suggested that a lot could be done to improve Europe’s educational structure. A key near-term challenge could be the re-skilling and “upskilling” of the existing workforce, which could also be done with the help of technology, she said.
The ECB president called for decisive policy actions to achieve these long-term goals, noting “those policies lie beyond the remit of monetary policy, but will certainly affect the environment in which central banks operate.”
The European Banking Congress is an annual forum that brings together top policymakers and the banking and financial industry in Europe. The event falls on the last day of the Euro Finance Week, which took place online this year due to the pandemic.