Lagarde Calls for Public Spending Cuts to Fuel EU AI Investment

European Central Bank (ECB) president Christine Lagarde has called for reducing certain public spending items to invest in artificial intelligence (AI) and defense. She emphasized that countries must make these adjustments without unbalancing their accounts.

Lagarde did not specify which specific areas of public expenditure should be reduced, stating only 'I won't say anything more, as you can imagine.'

She also mentioned the European Commission's fiscal rules provide for 'flexibility valves' to allow countries temporary leeway to redirect their accounts.