In the midst of economic turbulence, ECB President Christine Lagarde finds herself under immense pressure to make a pivotal decision. Economists across the Eurozone, along with policymakers, particularly those in debt-ridden Southern European nations, and banking institutions, are urging swift action to lower interest rates. Currently standing at 4%, experts predict that by the end of 2025, this rate will plummet to 2.25%. Lagarde and her team at the ECB are acutely aware of the stakes involved. In a bid to compete with the Federal Reserve and the Bank of Japan, they must demonstrate resilience and avoid any signs of weakness. Lowering interest rates swiftly is perceived as a crucial step to shield Europe's banking system from harm. Yet, this move also carries significant implications for capital flows, potentially accelerating existing trends. Lagarde revealed that the Eurozone suffered a staggering loss of 250 billion euros in foreign capital last year alone.

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