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Differences in the utilization of physical therapy for outpatients with non-specific shoulder pain labels and specific shoulder pain labels | BMC Health Services Research
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Fiscal policy and growth in Europe

Keynote speech by Christine Lagarde, President of the ECB, in the session “Central Banks in a Changing World” at the European Meeting of the Trilateral Commission in Vienna, Austria

Vienna, 22 November 2025

It is a pleasure to be here in Vienna.

The relationship between central banks and governments has evolved substantially over the centuries.

Historically, central banks were often created to provide governments with financing.^[1] But if monetary history teaches us one lesson, it is that central banks kept under the thumb of the state tend to generate inflation.

This insight emerged only gradually.

In the early 19th century, Napoleon Bonaparte – who founded the Banque de France – is said to have acknowledged that a central bank should serve the state, but not be excessively dominated by it.^[2] Well, that was a start at least.

Over time, however, and especially in the second half of the 20th century, recognition grew that the more operationally independent a central bank became, the lower and less volatile inflation outcomes were. This relationship is well established in the empirical literature.^[3]

But there is always the concern that a short-sighted government may be tempted to try to force the hand of a central bank to finance its debt – despite the lessons of history.

This concern tends to surface when public debt is elevated, as it is today in a number of jurisdictions.

Indeed, this afternoon’s session asks the question of whether central banks may someday face a regime of fiscal dominance – in which governments burdened with large current or future spending needs compel them to provide finance regardless of the inflationary consequences.

Today, I will begin by looking at Europe’s experience with monetary–fiscal interactions in recent years. I will then turn to the fiscal challenges ahead and discuss the ways in which Europe can mobilise its flexibility and collective strength to support higher growth.

The experience of monetary policy and fiscal policy in recent years

When we look at the policy actions taken in the euro area in recent years, the narrative of fiscal dominance does not hold.

During the pandemic, monetary policy and fiscal policy worked hand in hand to help lift the economy out of the state of emergency.

The ECB carried out large-scale bond purchases to safeguard price stability, while governments increased debt to finance furlough schemes and other support instruments.^[4]

Together, these measures were successful in stabilising the economy and putting the conditions in place for a fast recovery. Real activity in the euro area returned to its pre-pandemic level within seven quarters, compared with 29 quarters after the global financial crisis.^[5]

But they also left Europe with higher debt levels. At its peak in early 2021, public debt as a share of euro area GDP had risen by around 15 percentage points relative to its pre-pandemic level.^[6]

Yet the ability of monetary policy to pursue its mandate in full independence has not been constrained by fiscal policy.

This was clearly demonstrated when, confronted with the largest inflation shock in a generation, we increased rates at a record pace – the sharpest tightening of monetary policy in our history.^[7] Inflation fell dramatically and, today, is close to our 2% target.

We also reduced the size of our balance sheet through quantitative tightening, reinforcing the stance of our monetary policy.^[8] Our monetary policy securities portfolio has already declined by over €1.1 trillion from its peak.^[9]

At the same time, there has also been a significant improvement in primary balances.

After dropping sharply in 2020 owing to the pandemic, the euro area primary balance improved by more than 4 percentage points of GDP by 2024, albeit with considerable variation across Member States.^[10]

Perhaps most importantly, the ECB’s independence is unchallenged. We have one of the strongest and most clearly defined forms of central bank independence in the world, firmly anchored in the EU Treaties.

A different kind of fiscal challenge in the euro area

In fact, when I think about monetary-fiscal interactions, I see a different type of problem in Europe.

Public debt levels in the euro area remain elevated and need to come down. But the main challenge I see is not that governments widely fail to respect the fiscal rules.

Rather, it is that governments need to place greater emphasis on spending that supports potential growth and key strategic priorities while consolidating their budgets.

For example, the new EU fiscal rules give countries the opportunity to extend their fiscal adjustment period to as long as seven years if they commit to public investment and structural reforms that strengthen productivity and long-term growth.

But only seven out of 20 euro area countries have chosen this path.^[11]

This can lead to a situation that has been called “fiscal stagnation”, where the measures taken to consolidate public finances weaken growth potential, leading to still more need for consolidation, in what can become a vicious circle.^[12]

All this matters for central banks – not because of fiscal dominance in the classical sense – but because it can trap the economy in a low-growth equilibrium. This can make the central bank’s job harder in various ways.

A scenario of persistently low productivity growth, for instance, can put downward pressure on the natural rate of interest. That can limit how far central banks can cut rates, as we saw during the pre-pandemic era. At the same time, weak potential growth can also keep inflation higher than it would otherwise be.

By contrast, a scenario of stronger productivity growth can make the central bank’s job easier. In ageing societies, for example, faster productivity growth may moreover be key to compensate for shrinking labour supply and avoid upward wage pressures.

Now, one of the main reasons that governments are deprioritising productive spending over current spending is the pressure to sustain Europe’s social model and support ageing societies in the short run.

Yet it is precisely this productive spending that will enable Europe to generate the productivity gains needed to sustain its social model and its ageing population in the long run.

The goal should be to foster a virtuous circle in which productive spending raises productivity growth. Higher productivity, in turn, strengthens potential growth. That would put Europe’s social model on a stronger and more sustainable economic footing.

Mobilising Europe’s flexibility and collective strength

I see three ways in which Europe can rise to the challenge of achieving this goal.

First, countries should use the flexibility that the fiscal rules allow.

For example, if Member States reallocated just 1% of GDP more of existing public spending to research and development and another 1% to education, the productivity and growth gains could be sizeable: one study finds that, together, these shifts could boost output by around 6% over the long run.^[13]

This should mean that, by the end of the seven-year adjustment period, government debt would be on a more sustainable path supported by higher potential growth, not higher taxes or cuts to productive expenditure.

Second, Europe should deploy its collective resources more efficiently.

Rather than each government reallocating existing national spending in isolation, we should explore ways to pool resources in high-multiplier areas where there are cross-border benefits and clear returns to scale can be achieved.

As it happens, these are often strategic areas where Europe must strengthen its capabilities anyway – such as research and development to drive innovation and defence to deter hostile actors.

We know what is possible when Europe puts its mind to it.

An example of this is the European Organization for Nuclear Research – CERN – established back in the 1950s.

By pooling national resources, European countries were able to pursue high-energy physics research at a scale and over time spans that individual countries could not have financed alone.^[14]

This joint initiative has produced major breakthroughs, notably the creation of the World Wide Web, as well as technological advancements in medical imaging and autonomous driving with artificial intelligence.

More recently, in March this year, the European Commission launched Readiness 2030, an initiative that helps to pool defence procurement across EU countries.

Under the initiative, €150 billion will be mobilised for investments in pan-European capability domains – such as air and missile defence, artillery systems, and anti-drone systems.^[15]

Third, there is strong potential to use EU budget instruments to mobilise private capital.

Europe faces unprecedented investment needs to finance the green, digital and defence transitions. Together, these are estimated to require an additional €1.2 trillion of spending per year between now and 2031.^[16]

These vast amounts cannot be borne by the public sector alone, so private investment will need to contribute substantially. While deeper capital-market integration is essential to unlock this private investment, well-designed EU programmes can play an important complementary role.

For instance, ECB research finds that the European Structural and Investment (ESI) funds – de facto the EU’s primary investment vehicle – generate significant crowding-in effects. Every euro of ESI funding has been matched by €1.10 of private investment.^[17]

Further ECB analysis shows that ESI-funded firms steadily increased their capital stock and experienced long-lasting gains in productivity.^[18]

Leveraging the synergies between targeted public investment and private finance will likely prove critical if Europe is to meet its investment needs and boost potential growth.

If Member States and the EU make full use of these three opportunities, Europe could combine the best of both worlds: strengthening productivity growth while preserving its social model.

In parallel, it would also reduce the risk of fiscal dominance emerging in the future.

Conclusion

Let me conclude.

The composer Johann Strauss II is said to have remarked “If only I had more time; the ideas come faster than I can write them down.”

I have no doubt that the beauty of this city was a constant source of inspiration to this famously creative son of Vienna.

We all do what we can with the time given to us – and Strauss, it is fair to say, used his exceptionally well. I have used the time given to me this afternoon to offer several ideas on how Europe can best leverage its flexibility and collective strength to support higher growth.

Crucially, each idea is within the realm of possibility – as there are already important precedents that demonstrate what is possible. Just as Strauss transformed inspiration into enduring works, Europe too can turn these opportunities into the growth needed to sustain its social model.

Thank you.

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Pinterest is leaning hard into AI. The strategy appears to be backfiring

New York
—

Abigail Wendling, 23, uses Pinterest to curate everything in her life, from recipes to wallpapers. At least until she saw a one-eyed cat when searching for a wallpaper. In another instance, a search for healthy recipes turned up a puzzling image showing a slice of cooked chicken with seasonings sprinkled inside it.

These posts were created by generative AI, which is quickly overtaking the photo-first platform. Pinterest, like other social media platforms, has grappled with a flood of AI slop since the launch of ChatGPT’s Sora video generation tool in 2024. The company has taken proactive steps to curb the content for users who don’t want it.

But the presence of generative AI has struck a chord with Pinterest’s creative community, with users telling CNN that they feel unheard as the company’s C-Suite goes all in on the burgeoning technology.

“It makes me want to put my phone down and do something else,” said Wendling, who also uses Instagram and TikTok. “I would say Pinterest has the most AI-generated photos and videos out of every social media app I’m using right now … I have to look over everything with a microscope now.”

Diving headfirst into AI has been a priority for Pinterest CEO Bill Ready, who took over the company in 2022. The former Venmo and Braintree leader has rebranded Pinterest “from a platform of window shopping” to “an AI-powered visual-first shopping assistant” in its latest earnings call this month. And it’s not alone: Pinterest joins Google, OpenAI and Amazon in a push to revamp the online shopping experience with AI.

Pinterest logged 600 million global monthly active users, half of which are Gen Z and many of whom use it for shopping inspiration. Its third-quarter revenue recently grew 17% year-over-year to $1 billion.

Artificial intelligence, a technology that Silicon Valley is racing to adapt and monetize, is at “the heart of the Pinterest experience,” he said.

What that means for Pinterest users is the stress of trying to navigate AI slop, more advertisements and less content they want to see on the platform, users told CNN.

“I want to see art that a human being has put time and effort into, not some gorge spit out by someone who typed a few words into an image generator,” Amber Thurman, a 41-year-old Pinterest user from Illinois, said to CNN.

Over the past year, Pinterest has responded to user complaints. It rolled out a “tuner” last month to adjust how much AI content users want to see and was an early adoptor in labeling Gen AI images on its platform earlier this year.

“While many people enjoy GenAI content on Pinterest, we know some want to see less of it,” a Pinterest spokesperson said in an email to CNN, adding: “Pinterest prioritizes high-quality content and what is inspirational to our users – whether it’s AI-generated or not.”

However, Pinterest users who spoke to CNN said they no longer recognize the app they signed up for and argue that the platform hasn’t kept up with the daily flood of AI content. The tools to limit AI, they argue, aren’t enough.

“There’s not a precise ability for any platform to catch 100% of what is AI-generated,” Ready said in the earnings call.

Pinterest once served as a haven from fast-talking commentary on TikTok, life updates from former classmates on Instagram and relatives arguing over politics on Facebook.

Founder Ben Silbermann told CNN in 2019 that the platform’s primary goal was to inspire users. Users curated mood boards and pinned cookie recipes. Creatives and artists flocked to the app to find real-life design inspiration.

The Pinterest app in February 2017, before it got rebranded as a shopping platform.

But in 2025, tech giants are racing to capitalize on a technology that some have called as impactful as the smartphone or the internet itself. And that includes finding new ways to monetize. AI.Meta, for example, will soon start using user conversations with its AI assistant to inform targeted ads.

For Pinterest, its future hinges on AI-powered shopping. Its algorithm pinpoints products for users based on their searches in the app.

In its latest quarter, the number of people clicking on advertiser links grew by 40% compared to the year before and has increased by more than five times in the last three years, according to earnings reports. The company is doubling down on that momentum by introducing more AI features, such as a shopping assistant users can converse with that acts as “a best friend,” the company said.

However, some long-time users are not buying Pinterest as a shopping ad.

Hailey Cole, a 31-year-old creative director from California, began using Pinterest’s competitor Cosmos for design inspiration recently. She said she’s never purchased anything from the platform and is worried that Pinterest’s AI content may be stealing intellectual property, as she said it happened to her. Pinterest’s policy states it will take down accounts of those who repeatedly infringe on copyright or intellectual property.

“I’ve heard the CEO say (Pinterest is a shopping app); I don’t know where he came up with that… I think that’s him more just envisioning or manifesting,” Cole said.

Wendling said she worries about authenticity on Pinterest. With the sheer amount of fake content on the platform, even if she sees something she likes, she said she would go to another site and buy it.

Users will have to “live with both” slop and new technology as companies work to monetize the technology, Jose Marichal, a professor of political science at California Lutheran University, told CNN.

Pinterest’s leaders certainly are.

Over time, AI will follow a similar trajectory to Photoshop, Ready said. “Almost every piece of content you see will have been at a minimum edited by AI in some form or another.”

But that approach could jeopardize the authentic feel that drives users to the platform in the first place.

The Pinterest website in July 2023. Pinterest users who spoke to CNN in 2025 said they no longer recognize the app they signed up for.

AI-generated posts often lead to off-platform websites that profit off affiliate marketing, Casey Fiesler, associate professor of information science at the University of Colorado Boulder, told CNN.

For example, one of the first search results for “chocolate chip cookie recipe” on Pinterest led to a photo of the dessert. The post linked to a different site that was riddled with ads and had an AI-generated image of a chef. The recipe itself matched almost exactly to a ChatGPT query asking for “the best chocolate chip cookie recipe ever.”

On an algorithm-driven social media site, the one thing that users can control is their own engagement with AI content. Even leaving a hate comment or sending it to a friend as a joke can signal to the algorithm that you want to see more of that content, Fiesler said.

Media literacy is also more important than ever as users will need to sniff out slop on their own.

“These platforms are looking to gain short-term metrics, but they are degrading user experience and long-term trust,” said Tony Sampson, senior academic at the University of Essex.

So far, the users that spoke to CNN have been cutting down on their Pinterest usage. While some are moving to new apps like Cosmos, others are finding themselves back on older sites like Tumblr.

“For something like Pinterest in particular, I imagine it makes people a little sad,” Fiesler said. “They used to see a lot of human-created content that they found inspiring, and now it’s just a lot of very non-human, perhaps not inspiring content.”

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Scientists track recent solar flare disruptions in Earth's ionosphere – Phys.org

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The Sun Just Unleashed…

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Differences in the utilization of physical therapy for outpatients with non-specific shoulder pain labels and specific shoulder pain labels | BMC Health Services Research

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Ocular manifestations of primary thrombotic microangiopathies : a descriptive systematic review | BMC Ophthalmology

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Fiscal policy and growth in Europe

Keynote speech by Christine Lagarde, President of the ECB, in the session “Central Banks in a Changing World” at the European Meeting of the Trilateral Commission in Vienna, Austria

The experience of monetary policy and fiscal policy in recent years

A different kind of fiscal challenge in the euro area

Mobilising Europe’s flexibility and collective strength

Conclusion

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Women Likely to Be Retraumatised by ECT: Disturbing Findings from a New Survey

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Tobias Jesso Jr. on ‘Shine,’ Justin Bieber and the aftermath of ‘Goon’

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Pinterest is leaning hard into AI. The strategy appears to be backfiring

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Scientists track recent solar flare disruptions in Earth's ionosphere – Phys.org

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Our cofounder credited in fake citation; ‘Substantial’ undisclosed COIs in psychiatry research; an AI threat to online surveys – Retraction Watch

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