During an online meeting of G7 finance ministers, European Central Bank (ECB) President Christine Lagarde engaged in an open dispute with US Secretary of State Scott Bessent, dismissing his optimism about the short-term economic consequences of the war with Iran, APA reports citing Bloomberg.
According to his sources, Bessent downplayed the damage from the war and called the closure of the Strait of Hormuz temporary. Lagarde, however, countered, stating that the consequences would be felt long-term, as too much had already been destroyed.
The disagreements, the agency notes, reflect growing tensions between the US and Europe, which is suffering disproportionately from rising energy prices and shipping disruptions. The ECB's baseline scenario projects inflation peaking at 6.3% with severe energy disruptions persisting until the end of 2026.
