ECB President Lagarde told the IMF's International Monetary and Financial
Committee that fiscal sustainability remains a key pillar of macro stability.
She said high-debt countries should pursue fiscal consolidation, reprioritize
spending and improve public finance efficiency to rebuild buffers. Any fiscal
measures to address the energy shock should be temporary, targeted and tailored.
On the euro-area outlook, Lagarde said growth risks are tilted to the downside
while inflation risks are tilted to the upside, and that the energy shock is too
large to ignore but cautious, measured responses remain appropriate to control
inflation.
