ECB's Lane: fiscal policy to turn into economic drag

Societe Generale SA

08/10/2026 11:35

FRANKFURT, Oct 8 (Reuters) - The euro zone economy is being boosted by AI-related investment but much less so than in the United States, while fiscal policy is likely to be a drag in the coming years, European Central Bank chief economic Philip Lane said on Thursday. 
"It is boosting the European economy but it's not the overwhelming, first order, dominant mechanism as in the US and to some extent in China," Lane said about AI investment at a Societe Generale conference. 
While the European economy performed surprisingly well this year, Lane also said support from fiscal policy was waning and that the ECB expected fiscal tightening next year and in 2028. 

 (Reporting by Balazs Koranyi
Editing by Gareth Jones)
 ((Balazs.Koranyi@thomsonreuters.com; +49 30 220 133 623; Reuters Messaging: balazs.koranyi.thomsonreuters.com@reuters.net))