The European Central Bank opens a new chapter in its history. Mario Draghi has completed his 8-year term as President and has been succeeded by former IMF Managing Director Christine Lagarde. Passing the reins of power is taking place in the troubled time. Mario Draghi is frequently accused of inefficient policy decisions which are partly to blame for economic weakness in the euro area. On the plus side, the regulator with Draghi at the helm survived a few crises and a period of stagnation. “Today, we are in a situation where low interest rates are not delivering the same degree of stimulus as in the past, because the rate of return on investment in the economy has fallen. Monetary policy can still achieve its objective, but it can do so faster and with fewer side effects if fiscal policies are aligned with it,» he said in his farewell speech in Frankfurt. In any case, Mario Draghi will be memorable as the policymaker who was ready for any unconventional fiscal measure to save the euro.

The new ECB leader does not mean the termination of the ongoing monetary policy and new forward guidance. Experts are certain that Christine Lagarde will not be able and will not find it appropriate to deviate from the stance adopted by Mario Draghi. The thing is that the ex-President was targeted by some colleagues in the Governing Council. So, the newly-appointed President will have to deal with disagreement within the ranks. Meanwhile, she is likely to focus on interaction with the leaders of the countries in the euro bloc. She aims to convince them of introducing stimulus measures like increasing public spending on vital infrastructure projects.