European Central Bank raised rates to fight inflation, but understands burden it puts on people, says Lagarde

ECB president tells Late Late Show she remembers bailout phone calls with Brian Lenihan ‘with emotion’

The European Central Bank doesn’t raise interest rates “out of pleasure” and understands it puts a burden on people, its president Christine Lagarde has said.

Ms Lagarde said the ECB raised interest rates again on Thursday to “fight inflation” and that she understood it was particularly hard for those with certain mortgages.

Speaking on RTÉ's Late Late Show on Friday, Ms Lagarde said inflation had come from “nowhere” and that Europe had previously been fighting deflation. She said inflation had come as a result of a “very speedy recovery” and the energy crisis caused by Vladimir Putin’s war on Ukraine.

Ms Lagarde said the president of Russia was trying to “cause chaos and to destroy as much of Europe as he can”.


“This energy crisis is causing massive inflation, which we have to defeat. So that’s why we have to raise interest rates, because we want to tame inflation, bring it back to a reasonable level so that the cost of living is not as high as it is for people,” she said.

Ms Lagarde said ordinary working people were at the forefront of her thoughts but that equally “we just have to do what we have to do”.

“The mission of the European Central Bank is not just to be the custodian of the euro for everybody in Europe, but it is also to fight inflation so that we have price stability,” she said.

“This is our mantra, this is our mission, this is our mandate and inflation is just terrible for all of us. But it’s particularly bad for those who have low incomes because they get hit worse than those who have high incomes.”

Ms Lagarde also said she remembered calls during the bailout with the former minister for finance Brian Lenihan “with emotion” and described him as a “very nice man”.

“Those were very tense and very difficult days where he had to make and we all had to make really difficult decisions on the spur of the moment because finance was just wiping away from the scene and we had to just stop things and sometimes we made the right decisions and sometimes they were as good as they could be in those days,” she said.

Ms Lagarde also said that 50 years on from Ireland joining the European Union, it had been a “story of success, of prosperity”.

“Yes, there were crises. Yes, there were times when things went a bit too fast and had to just stop, slow down and people took a hit on occasions but overall, if you look at the 50 years, it’s been a great success,” she said.

“I think that Ireland, joining Europe, and being part of the family has been just a tremendous result.”

The ECB president also recalled meeting Mr Putin a number of years ago and described him as “a terrifying person”.

“I’m sure that he has changed enormously because he was not as sick as he is today,” she said. “I’m sorry to say that but that’s what I think.

“He was this unbelievably, super briefed person. So he knew his files inside out, didn’t need his papers, didn’t need anybody to prepare him beforehand. He knew it all and I think it had to do with his intelligence and spying, [in a] previous life where you have to learn everything by heart and you don’t trust anybody,” she said.

“But he wouldn’t necessarily look at you in the eyes. He would just look at the table or look wherever and then suddenly his eyes would, you know, go to you and he had this sort of flashing, freezing eyes. So that’s what I’m saying, that just terrifying aspect about him. In those days he was a different person.”

She added that anybody who “is behaving in that way has to be driven by evil forces”.

Sarah Burns

Sarah Burns

Sarah Burns is a reporter for The Irish Times