Christine Lagarde: Governance at a turning point

Speech by Ms Christine Lagarde, President of the European Central Bank, at the Académie des sciences morales et politiques, Paris, 4 December 2023.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
06 December 2023

I am honoured to speak to you today as part of your prestigious academic programme on the many aspects of good governance – a crucial issue in these uncertain and challenging times.

I feel particularly honoured to be speaking to such bright and capable minds, in this iconic meeting place for the scientific, literary and artistic elite of our nation.

The Institut de France is often aptly referred to as a parliament of the learned world. By guaranteeing the independence of knowledge, it offers an open space where all kinds of knowledge intersect, allowing scientific, literary and artistic work to take place freely. In this way, the Institute stands for the protection of liberties and the need for integration[1], two aspects of good governance.

In my view, these aspects also apply to governance in a broader sense, particularly regarding individuals and governments. And they are especially important for supranational governance, as there is often a tension between the need for closer integration – which is likely to advance prosperity – and the wish for greater protection of liberties.

In fact, it's this tension that leads to rules-based systems and institutions emerging as countries work together voluntarily to forge supranational governance structures. And as international cooperation becomes stronger and more complex, supranational governance must also be strengthened to support it.

But in recent decades we have also seen an imbalance emerge between the authority delegated to supranational governance and its legitimacy in the eyes of citizens. That is partly because supranational governance, by promoting the expansion of economic integration, has also contributed to weakening its own legitimacy.

Today, this lack of legitimacy brings us to a turning point where we must either deepen supranational governance or accept its decline. However, I am confident that we can find a way forward by meeting three essential conditions.

First, by aligning governance with, and focusing it on, people's priorities. This is what I will call the function.

Next, by using the right forms of governance to effectively respond to people's concerns. I will refer to this as the form.

And finally, by striving to fulfil that function and serve the public, with what I will describe as courageous and accountable leadership.