Lagarde Is Counting on Meloni’s Italy to Meet Terms of EU Aid

(Bloomberg) -- The European Central Bank is counting on Italy to keep pushing through reforms required in return for Recovery Fund cash designed to retool its economy, according to President Christine Lagarde.

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“Our hope from a monetary policy standpoint is that those measures will be delivered upon,” she told European Parliament lawmakers on Monday. “It’s a great opportunity to demonstrate that from the fiscal and structural standpoint, there can be a strong determination to pull Italy into that improved economic situation going forward.”

Lagarde sought to avoid talking about the political situation in Italy, where Giorgia Meloni took office as prime minister last month at the helm of a right-wing coalition. Her remarks still hinted at concern that reform progress in the euro zone’s third-biggest economy might halt or even backslide now that the ECB president’s predecessor, Mario Draghi, is no longer premier.

“Significant progress had been made in the last couple of years in particular in terms of structural reforms, in terms of improvement to the productivity of the Italian economy, as a result enhancing its potential output,” she said. “Those structural measures hopefully will be there for the longlasting period that will be necessary to prove their efficiency for the economy.”

The ECB president did offer some initial words of warmth to Meloni.

“It is very fitting and timely that Italy has for the first time a female prime minister and I wish her the best success in the endeavor to actually drive the Italian economy toward a successful path,” she said.

--With assistance from Bastian Benrath, Bryce Baschuk, Jana Randow and Alexander Weber.

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