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ECB’s Lagarde calls for a strong Europe in the face of Trump’s possible return

by SuperiorInvest

European Central Bank (ECB) President Christine Lagarde attends a session on the closing day of the annual meeting of the World Economic Forum (WEF) in Davos, January 19, 2024.

Fabrice Coffrini | afp | fake images

The president of the European Central Bank, Christine Lagarde, stated on Friday that Europe must be “strong at home” and go on the offensive in the face of a possible return of Donald Trump to the White House.

“The best defense, if we want to look at it, is attack,” Lagarde said at the World Economic Forum in Davos, responding to comments about the prospects for Europe after the upcoming US elections.

“To attack properly, it is necessary to be strong at home. Being strong means having a strong and deep market. Having a truly single market,” he added.

Europe faces an uncertain future in its relationship with its closest international ally, following the US vote.

The re-election of US President Joe Biden would likely maintain the status quo, while a victory for Trump, the favorite to win the Republican nomination, could reduce economic and political support.

With this in mind, Lagarde said Europe should invest more in its capital markets to finance investments, such as in the green transition.

The possibility of Trump winning a second term in the White House has been a hot topic at the meeting of political and business leaders in Switzerland this week.

During his first term, Trump often criticized Europe’s economic dependence on the United States, even within NATO. He has since talked about withdrawing US funding from Ukraine, which he considers a European issue.

Lagarde spoke on a Bloomberg panel alongside German Finance Minister Christian Linder, who agreed that market investment is the best route for Europe to improve its self-sufficiency. This is especially important in the face of heavy US subsidies for green projects, he noted.

“We have to avoid a race for subsidies. We cannot afford to [it]Linder said, noting that it was unclear whether that support would continue under a new Republican administration. “Our competitive disadvantage compared to the U.S. is not subsidies but the function of our private capital market.”

Linder added that such an investment would help Europe foster a stronger transatlantic relationship, particularly with more Eurosceptic leadership across the pond.

“Being an attractive and eye-level partner in terms of the economic situation and in terms of fair burden sharing under the NATO roof, is the best thing we can do to maintain a good partnership with United States,” he said. saying.

Correction: This story has been updated to better reflect Christine Lagarde’s comments in context.

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