{"id":275496,"date":"2025-11-21T13:57:07","date_gmt":"2025-11-21T13:57:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/275496\/"},"modified":"2025-11-21T13:57:07","modified_gmt":"2025-11-21T13:57:07","slug":"europes-economy-is-geared-towards-a-disappearing-world-says-ecbs-lagarde-european-central-bank","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/275496\/","title":{"rendered":"Europe\u2019s economy is geared towards a disappearing world, says ECB\u2019s Lagarde | European Central Bank"},"content":{"rendered":"

Europe\u2019s economy is \u201cgeared towards a world that is gradually disappearing\u201d, according to a warning from Christine Lagarde<\/a> that the EU needs reforms to spur growth.<\/p>\n

The president of the European Central Bank<\/a> (ECB) said the EU\u2019s dependence on international trade had left it vulnerable, as major partners had turned away from the trade that made the bloc\u2019s exporters wealthy.<\/p>\n

Donald Trump has led a global turn towards protectionism<\/a> and against globalisation, with steep tariffs imposed on almost every trading partner. At the same time, China has used its dominance of production of certain critical materials and products to exert pressure.<\/p>\n

Lagarde argued that Europe was vulnerable because of a \u201cdependency on third countries for our security and the supply of critical raw materials\u201d. She cited China\u2019s control of the supply of rare earth metals<\/a> that are crucial in electric motors and wind turbines, as well as the \u201cchoke point\u201d of power chips made by Nexperia in China<\/a> that threatened to shut down production across the global car industry.<\/p>\n

Speaking at the European Banking Congress in Frankfurt, Germany, Lagarde said Europe<\/a> had failed to address its own problems. Policymakers had instead allowed its weaknesses to \u201cerode growth quietly, as each new shock nudges us onto a slightly lower trajectory\u201d.<\/p>\n

\u201cOur internal market has stood still, especially in the areas that will shape future growth, like digital technology and artificial intelligence, as well as the areas that will finance it, such as capital markets,\u201d she said.<\/p>\n

Europe also faced a \u201cvicious circle\u201d of its own savers allocating money to US stocks, helping the American economy to advance faster than the EU and leaving \u201cstagnating productivity at home and growing dependence on others\u201d, she said.<\/p>\n

Lagarde did highlight some European strengths as well, including a resilient labour market, increasing digital investment, and government spending, particularly on defence<\/a> in response to Russia\u2019s invasion of Ukraine, that has counteracted economic slowdown.<\/p>\n

Part of Lagarde\u2019s prescription for recovery was lowering barriers to services and goods trade between EU countries. Those barriers are equivalent to a 100% tariff on services and 65% on goods, according to ECB analysis. Lowering those barriers to the same level as the Netherlands \u2013 a relatively open economy \u2013 would fully make up for the hit from US tariffs, she said.<\/p>\n

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She called for mutual recognition of regulated companies, allowing them to sell across Europe when authorised by any one country. She also said the EU should adopt qualified majority voting on tax, preventing any single member state from vetoing changes.<\/p>\n

She argued that benefits would include allowing the harmonisation of VAT, making it easier for smaller European companies to gain access to the whole EU market without having to comply with 27 different tax regimes.<\/p>\n","protected":false},"excerpt":{"rendered":"Europe\u2019s economy is \u201cgeared towards a world that is gradually disappearing\u201d, according to a warning from Christine Lagarde…\n","protected":false},"author":2,"featured_media":275497,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-275496","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/275496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=275496"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/275496\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/275497"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=275496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=275496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=275496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}