Lagarde’s deja vu
When the European Central Bank held its first retreat in the Portuguese hilltop resort of Sintra in 2014, the euro region was experiencing a nervous lull in its debt turmoil following the global financial crisis.
At the time, Greece's leftist party Syriza was heading toward winning power and starting a bitter confrontation with the bloc the next year that almost saw that country leave the single currency.
The conference's first speaker then was Christine Lagarde, who was chief of the International Monetary Fund. She began her speech by quoting the French writer Victor Hugo:
"Emergencies have always been necessary to progress. It was darkness which produced the lamp. It was fog that produced the compass. It was hunger that drove us to exploration. And it took a depression to teach us the real value of a job."
Those bleak words still echo a decade later. As Lagarde, now president of the ECB, again delivers the event's inaugural speech later today, politics linger very much in the foreground, and the danger of financial turbulence — or even emergencies — is lurking.
Her own country, France, is in the midst of a bitter election to choose a new National Assembly. Last month, investors worried that the outcome could lead to more public spending started demanding the highest premium on the country's bonds since 2012.
The results so far suggest that Marine Le Pen's National Rally is poised to win the biggest number of seats, albeit short of a majority needed to govern. While that's reassured fiscally focused markets that big changes in policy aren't about to happen, it's not much of a comfort either.
With Brussels already reprimanding France over its big deficits, a confrontation seems ever closer. If that ultimately provokes market turmoil, it could be Lagarde's job to clean up the mess.
That's one reason why Sintra's talks on multiple topics ranging from inflation and biodiversity to productivity may turn out to be a distraction for many officials from the real-world events going on in France.
French Budget
Funnily enough, fiscal policy — part of the specter overshadowing the whole ECB event — doesn't feature on the formal agenda.
Outside the room however, Lagarde — a former French finance minister — is likely to be closely watching events back in Paris, with an eye on the budgetary consequences.
Back in 2014, Lagarde couldn't have imagined that she would end up one day filling the shoes of her host, former ECB President Mario Draghi. But in her speech then, she did muse on the unknowns facing the global economy, in terms that might haunt her today.
"Standing on these shores—at the edge of Europe's frontier before the vast Atlantic, naturally makes you want to explore. Just as it must have been in the 15th century, when brave adventurers like Vasco da Gama wondered what might lie ahead — monster or wonder?"
The Week Ahead
US employers probably tempered their hiring while wage growth moderated in June, representing another favorable development for Jerome Powell and his Fed colleagues seeking more confirmation that inflation is slowing.
Payrolls in the world's largest economy are projected to have increased by about 190,000, according to a Bloomberg survey of economists ahead of Friday's report. That's a step down from a surprising robust 272,000 gain in May employment. The jobless rate probably held at 4%.
Elsewhere, the second half will kick off with a packed week. Chinese business survey data and euro-zone inflation are among the highlights, and elections in France and the UK will also focus investors.
Need-to-Know Research
Eliminating 'de minimis' shipments of goods into the US would hit the poorest hardest.
One billion shipments valued at $54.5 billion entered the US last year under rules that allow up to $800 in imports per person per day to enter duty-free and with minimal customs requirements, so-called 'de minimis.'
Eliminating that entry route would disproportionately hurt poor and minority households, according to a paper titled The Value of De Minimis Imports.
At the time, Greece's leftist party Syriza was heading toward winning power and starting a bitter confrontation with the bloc the next year that almost saw that country leave the single currency.
The conference's first speaker then was Christine Lagarde, who was chief of the International Monetary Fund. She began her speech by quoting the French writer Victor Hugo:
"Emergencies have always been necessary to progress. It was darkness which produced the lamp. It was fog that produced the compass. It was hunger that drove us to exploration. And it took a depression to teach us the real value of a job."
Those bleak words still echo a decade later. As Lagarde, now president of the ECB, again delivers the event's inaugural speech later today, politics linger very much in the foreground, and the danger of financial turbulence — or even emergencies — is lurking.
Her own country, France, is in the midst of a bitter election to choose a new National Assembly. Last month, investors worried that the outcome could lead to more public spending started demanding the highest premium on the country's bonds since 2012.
The results so far suggest that Marine Le Pen's National Rally is poised to win the biggest number of seats, albeit short of a majority needed to govern. While that's reassured fiscally focused markets that big changes in policy aren't about to happen, it's not much of a comfort either.
With Brussels already reprimanding France over its big deficits, a confrontation seems ever closer. If that ultimately provokes market turmoil, it could be Lagarde's job to clean up the mess.
That's one reason why Sintra's talks on multiple topics ranging from inflation and biodiversity to productivity may turn out to be a distraction for many officials from the real-world events going on in France.
French Budget
Funnily enough, fiscal policy — part of the specter overshadowing the whole ECB event — doesn't feature on the formal agenda.
Outside the room however, Lagarde — a former French finance minister — is likely to be closely watching events back in Paris, with an eye on the budgetary consequences.
Back in 2014, Lagarde couldn't have imagined that she would end up one day filling the shoes of her host, former ECB President Mario Draghi. But in her speech then, she did muse on the unknowns facing the global economy, in terms that might haunt her today.
"Standing on these shores—at the edge of Europe's frontier before the vast Atlantic, naturally makes you want to explore. Just as it must have been in the 15th century, when brave adventurers like Vasco da Gama wondered what might lie ahead — monster or wonder?"
The Week Ahead
US employers probably tempered their hiring while wage growth moderated in June, representing another favorable development for Jerome Powell and his Fed colleagues seeking more confirmation that inflation is slowing.
Payrolls in the world's largest economy are projected to have increased by about 190,000, according to a Bloomberg survey of economists ahead of Friday's report. That's a step down from a surprising robust 272,000 gain in May employment. The jobless rate probably held at 4%.
Elsewhere, the second half will kick off with a packed week. Chinese business survey data and euro-zone inflation are among the highlights, and elections in France and the UK will also focus investors.
Need-to-Know Research
Eliminating 'de minimis' shipments of goods into the US would hit the poorest hardest.
One billion shipments valued at $54.5 billion entered the US last year under rules that allow up to $800 in imports per person per day to enter duty-free and with minimal customs requirements, so-called 'de minimis.'
Eliminating that entry route would disproportionately hurt poor and minority households, according to a paper titled The Value of De Minimis Imports.
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