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OPINION 26 maltatoday | SUNDAY • 28 JULY 2019 Central Link: Born in 2006, downsized and implemented now The new ECB guard: What to expect CHRISTINE Lagarde, a lawyer by profes- sion and previously the IMF Managing Director, will become the European Central Bank's first female president in November 2019. She will join a six-strong executive board which includes some relatively new faces. When Mario Draghi, the outgoing ECB President, took over from Jean Claude Trichet in 2011, the global and European economic picture was quite different from today's. Following the 2007-08 financial and economic crisis and a loom- ing European debt crisis which threat- ened the monetary union's existence, the ECB (whose responsibilities include setting the eurozone interest rate and en- suring the stability of the banking system) was asked to take a bigger role and step in through accommodating monetary policy to ease the pain. This "whatever it takes" approach led to a co-ordinated stimulus programme of quantitative easing (buying assets such as bonds from commercial banks) and an ultra-low interest rate policy. Though this European policy has not delivered the same level of impact as those of the Fed in the US, the crisis was averted and the European economies recovered most of the lost ground following the recession. At the same time, Draghi's time was also marked by increasing banking regulation and integration – the effects of the great recession and the sovereign debt crisis gave rise to the introduction of stress tests and monitoring mechanisms over systematically significant banks as the mandate and tools of the regulators have been expanded in order to address similar risks in the future. Though economic times have changed, the challenges remain. Her nomination was not widely expected since Lagarde will be the first ECB president without any direct experience of setting CB policy. Presiding over the ECB is viewed as a tough task given the requirement to oversee 19 eurozone economies. Moreover, the role of the ECB is not only to implement policy, but also to con- vince the markets of its ability to make true on its promises. In this regard, the ECB has become similar to the US Fed. This can be seen in the importance given to policy meetings and announcements and the market reaction in this respect. Broadly speaking, the challenges can be categorised into two – growth and integration. Specifically, one of the first challenges is to get the eurozone growing again. Eurozone growth has been rather moderate – plus 0.4% in the first quarter of 2019 compared to the previous trimes- ter or 1.2% growth compared to 2018. The US-China trade war has dragged down international trade volumes, which has had a knock-on effect in export- intensive industries of Europe such as the German carmakers. In terms of economic growth, Lagarde is expected to retain the current ECB policy path. In the short term, this should give markets confidence and assurance of continued support. However, she will have little firepower to do more and go beyond measures already in place given that the interest rates are already at record lows (e.g. zero and -0.4% for bank deposits). Theoretically, she could take the main interest rate into negative territory or deploy more unconventional policies, such as expanding quantitative easing. The latter is somewhat restricted by the bank's self-imposed limits. Hence, boosting demand significantly means either expanding the monetary toolkit or persuading EU governments to enact fiscal stimulus. In this regard, the ECB has been arguing for the use of more tax and spending measures to stimulate the eurozone economy. And then there is inflation which, after years of stimulus, is stubbornly below the ECB target of just under 2%. Another challenge relates to further integration within the eurozone, which remains an unfinished monetary and political union, suffering from deep divi- sions between member states over the ap- WHEN economist Gordon Cordina reviewed the costs and benefits of seven of our major road projects he concluded that Malta will get €7 back for every €1 we are spending on our road projects. But with the Central Link project this return on investment would go up to €16. Cordina's workings are based on the fiscal value of spending less time in traffic and earlier arrival times – thus having more quality time with our fami- lies, more time to work, less fuel costs and less accident costs. And of course, less air pollution. In the context of the present debate this serene logical approach to a prob- lem may not be appreciated. The arguments over how much land is being lost and the trees that will be uprooted dominate the media scene. Yet, it is important to underline that this action is needed if we are to move on. If we choose to do nothing we will face gridlock and with it the inescapable truth of a crisis. Today, most people want to use their private car, they depend on it and they know that the roads are clogged. In 2006, this road was planned, now that we are implementing a project which was left on the backburner for 15 years we are facing the flak. We do not take criticism lightly but neither does it mean that we stop in our tracks and halt what we are doing. The project today uses far less land than was envisaged in 2006 under another administration. To be precise, the project uses 57% less land than that planned in 2006. The project has been updated several times and this has primarily taken place after listening to stakeholders' concerns and taking their concerns into consid- eration. Central Link Project is the most sus- tainable solution to the traffic crisis that is hitting central Malta. The project's approval has irked sections of the pub- lic, with some critics condemning it due to the uprooting of trees and the use of land outside existing roads, including agricultural fields. There has also been a fair share of exaggerated and fake news, namely the suggestion that we would be removing the Aleppo Pine trees (znuber) from Saqqajja Hill and the western part of Mdina Road, all the way to the Our Lady of Victory Chapel. This is not true. In fact, along this stretch of road, we will only be removing three trees and planting 200 new ones, including 125 mature Aleppo Pine trees. And whilst we will be removing or transplanting other trees along the rest of the route towards Mriehel, finally, when the project is completed, Attard and Balzan will have 285 more mature indigenous trees than they have now. Hundreds of other trees will be plant- ed in other parts of Malta, as compen- sation for the project's environmental impacts. There is consensus that Attard faces a traffic problem that needs to be tackled. We may disagree on how this should be done, but we cannot postpone decisions any longer. Central Link will see seven kilometres of additional lanes built along the arte- rial route between the roundabout at the foot of Saqqajja Hill, in Ta' Qali, up until the traffic lights junction opposite the Malta Financial Services Authority in Mriehel. If one drives from the direction of Mriehel, you are passing through a road with four lanes. Once you leave the Saqqajja roundabout, where the project is going to end, you also have a road with four lanes. But the whole stretch of road in between has only two lanes. This is a recipe for the classic bottle- neck. This project will allow traffic that has been pushed into the residential roads in the heart of Attard, Balzan and Lija to continue going straight through. These narrow residential roads will be freed from traffic pollution and accident risks, commuters along this new arte- rial route will cut travel times by half. We will also reduce particulate matter pollution by up to 66% and nitrogen Aaron Farrugia Frederick Azzopardi