{"id":193007,"date":"2025-11-21T18:21:20","date_gmt":"2025-11-21T18:21:20","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/193007\/"},"modified":"2025-11-21T18:21:20","modified_gmt":"2025-11-21T18:21:20","slug":"christine-lagarde-warns-european-growth-is-linked-to-disappearing-world-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/193007\/","title":{"rendered":"Christine Lagarde warns European growth is linked to \u2018disappearing\u2019 world \u2013 The Irish Times"},"content":{"rendered":"

Europe\u2019s economic prosperity is \u201cgeared towards a world that is gradually disappearing\u201d, Christine Lagarde <\/a>said on Friday, imploring the bloc\u2019s policymakers to finally overcome \u201cyears of inaction\u201d.<\/p>\n

In a scathing speech, the president of the European Central Bank <\/a>(ECB) warned that Europe\u2019s \u201cold growth model\u201d had become outdated, as its dependence on exports had become a \u201cvulnerability\u201d.<\/p>\n

Making the keynote address at the European Banking Congress in Frankfurt, Lagarde pointed to a two-year-old ECB forecast that predicted that euro area exports would grow by about 8 per cent by mid-2025.<\/p>\n

\u201cIn reality, they have not grown at all,\u201d she said.<\/p>\n

Without directly mentioning Germany, she said that \u201ccountries with large manufacturing sectors\u201d had faced \u201ca prolonged slump in industrial production\u201d. <\/p>\n

In Germany, the bloc\u2019s largest economy, manufacturing output fell to 2005 levels over the summer, with carmakers and the wider engineering sector falling into crisis.<\/p>\n

[\u00a0ECB vice-president says true single market for goods key to simplifying business rulesOpens in new window<\/a>\u00a0]<\/p>\n

Bundesbank president Joachim Nagel painted a less negative picture in a speech later on Friday at the same conference. While Europe had fallen behind the US in terms of productivity growth and \u201ccould and should do better\u201d, Mr Nagel stressed that \u201ca closer look suggests that Europe\u2019s standard of living compared to the US has developed less badly\u201d. He insisted that Europe\u2019s position \u201cmay not be as dire as it is often portrayed to be\u201d.<\/p>\n

Ms Lagarde urged European Union (EU) policymakers to respond by strengthening the domestic economy, which she said was already showing \u201clatent strengths\u201d. \u201cOur experience this year has shown that a resilient domestic economy can shield Europe against global turbulence,\u201d she said.<\/p>\n

\"\"How AI is beginning to wreak havoc in the jobs market <\/p>\n

Across the euro area, growth this year has been slightly stronger than central bankers and most analysts had expected. In the third quarter, GDP grew at twice the expected pace, as French output expanded at its fastest rate since 2023.<\/p>\n

After a series of eight cuts in interest rates since mid-2024, which halved borrowing costs to 2 per cent, the ECB has kept monetary policy unchanged since June.<\/p>\n

Ms Lagarde called on policymakers to double down on existing domestic strengths by removing internal barriers to trade, pointing to a forthcoming ECB analysis showing that current hurdles were equivalent to a 100 per cent tariff on services and a 65 per cent tariff on goods.<\/p>\n

Ms Lagarde accused policymakers of squandering the past six years, during which \u201cour internal market has stood still\u201d, and warned of a slide into slow but steady decline. \u201cAnother six years of inaction \u2013 and lost growth \u2013 would not just be disappointing. It would be irresponsible,\u201d she said.<\/p>\n

Europe\u2019s economic weaknesses \u201cdo not trigger dramatic crises\u201d but \u201cerode growth quietly, as each new shock nudges us on to a slightly lower trajectory\u201d, Lagarde said. Over time, she said, this added up to a \u201cmaterial\u201d setback to growth and productivity. \u2013 Copyright The Financial Times Limited 2025<\/p>\n","protected":false},"excerpt":{"rendered":"Europe\u2019s economic prosperity is \u201cgeared towards a world that is gradually disappearing\u201d, Christine Lagarde said on Friday, imploring…\n","protected":false},"author":2,"featured_media":193008,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[79,179,18,789,19,17,12817],"class_list":{"0":"post-193007","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-eire","11":"tag-horizontal","12":"tag-ie","13":"tag-ireland","14":"tag-portrait"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115589080189040133","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/193007","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=193007"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/193007\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/193008"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=193007"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=193007"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=193007"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}