Lagarde says inflation crisis came from 'nowhere', describes Putin as 'a terrifying man'

THE INFLATION CRISIS has come from “pretty much nowhere” according to the European Central Bank president Christine Lagarde, while describing Russia’s Vladimir Putin as a “terrifying man”.

Speaking on the Late Late Show on RTÉ, Largarde said the “energy crisis is causing massive inflation” which she said was why the ECB has been raising 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”. 

The ECB applied another interest rate hike aimed at controlling spiraling inflation, increasing rates at the fastest pace in the euro currency’s history.

The 25-member governing council raised its interest rate benchmarks by three-quarters of a percentage point at a meeting yesterday in Frankfurt and matching its record increase from last month in the process.

Lagarde told host Ryan Tubridy that the combination of a “very speedy recovery” from the pandemic and “the energy crisis caused by Mr Putin” had plunged Europe into the current crisis. 

She added that it had come “pretty much from nowhere”.

When asked if she thinks of ordinary citizens impacted by the bank’s measures, she said she thinks “first and foremost” of them: “And inflation is just terrible for all of us, but it’s particularly bad for those who have low incomes because they get hit for us and those who have high incomes.”

On Putin’s invasion of Ukraine, she said it was an “unjustifiable way to invade another country” and is an attempt to “cause chaos and to destroy as much of Europe as he can”.

She recalled meeting the Russian leader in times before the war, describing him as an “unbelievably” well briefed person. 

“I think it had to do with his intelligence and spying (in his) previous life where you have to learn everything by heart and you don’t trust anybody, but he wouldn’t necessarily look at you in the eyes,” she said, describing his tendancy to suddenly look at her with “flashing freezing eyes” as the “terrifying aspect” about him. 

Asked how she views the Irish economy now, she said that over the past 40 years it has been “a great, great success” despite the recession.

She later fondly recalled the late Irish Finance Minister Brian Lenihan from their dealings during the bailout  - as his counterpart in France’s government – as a “dedicated leader” at the time of the economic crisis.

Additional reporting by PA