Lagarde Warns Energy Crisis Poses Immediate Threat to European Economy

European Central Bank President Christine Lagarde has warned of an immediate threat to the European economy due to the energy crisis linked to the Middle East conflict. In a recent interview, she said that crises are no longer isolated events but interconnected and mutually reinforcing. The current energy shock is affecting both prices and economic growth, while the geopolitical situation surrounding it is rapidly changing.

Lagarde pointed out that Europe's three major pillars - cheap energy from Russia, access to China's large market for European exports, and the U.S. security umbrella - are all under pressure. Russian energy supplies have been cut off, China has become a competitor to European producers in advanced markets, and uncertainty surrounding the U.S. security commitment is raising questions about the European model.

The ECB cannot resolve the underlying energy supply problem, but it can prevent a supply shock from becoming entrenched across the economy and driving inflation higher. Lagarde said that maintaining price stability remains the ECB's priority, and she monitors economic activity closely before making decisions.