When it comes to artificial intelligence, Europe is vastly behind the US and China technologically.

But in terms of productivity gains associated with workplace usage of AI, Europe is “not lagging behind,” Christine Lagarde, president of the European Central Bank (ECB), told the European Parliament on Thursday (26 February).

“Europe is equally moving and equally benefiting from those productivity increases, including in the SME sector, that’s what our data and our surveys are telling us,” she told MEPs of the economy committee. 

Cautioning that the data is only just “beginning” to show productivity gains, she said these gains appear similar across US and EU markets, even though financial investment patterns differ.

While the US dominates funding for the development of frontier AI systems, Europe is seemingly keeping pace with the uptake of existing tools across firms and sectors. 

“We’re seeing significant investment in Europe as well for the diffusion of artificial intelligence in multiple sectors of the economy,” said Lagarde. 

According to AI investment data published by the OECD in February, three-quarters of all AI venture capital in 2025 $194bn [€165bn] is allocated to firms in the US, while the EU pulled in $15.8 billion trailed by China’s $13.9bn. 

Job losses?

Lagarde also said that the bank would “look very carefully” for signs that the adoption of AI would result in job losses.

So far, “we are not yet seeing the waves of redundancies that are feared,” but “we will be extremely attentive going forward.”

This follows comments made by US federal reserve governor Michael Barr, who warned a gathering of economists and analysts last week that rapid AI advances could produce a “jobless boom” that could leave many people “essentially unemployable.” 

He also urged policymakers to prepare and be “clear-eyed” about labour market risks as generative AI expands.

“We don’t know yet what the impact on the labour market will be but we are looking very carefully,” Lagarde said. 

Heightened uncertainty 

But she also admitted that rapid technological change adds to the challenge of designing the right monetary policy. 

“The speed at which these technologies develop and update is incredible,” she said.

Whether the effects are “good or bad,” she added, the need for legislators to adjust to this level of change is historically “new.”

In this spirit, Greek centre-left MEP Nikos Papandreou asked whether the bank’s cautious, data-driven, “meeting-by-meeting” approach can still safeguard price stability amid new technologies, geopolitical turmoil, and a worsening climate crisis.

Lagarde, however, insisted the approach remains “perfectly legitimate.”

“Some argue that we should stop being so reliant on data and focus more on anticipating developments we cannot be certain about,” she said.

But she added that she was “really convinced” that by staying data-dependent, the central bank remains “agile” and able to adapt to fast-changing risks as they unfold.