Overview
- In a Frankfurt speech to the European Banking Congress, ECB President Christine Lagarde said Europe has grown more vulnerable to external shocks and must accelerate integration.
- ECB analysis puts internal Single Market frictions at tariff equivalents of about 100% for services and 65% for goods, underscoring lost productivity and scale.
- Lagarde urged three steps to unlock growth: shift more areas to qualified majority voting, create a pan‑European corporate law '28th regime', and revive mutual recognition.
- She argued Europe’s export‑led model has faltered under US tariff hikes, Russia’s war in Ukraine, and tougher Chinese competition, while the bloc lags in digital and AI.
- Recent fiscal outlays for defense and infrastructure, especially in Germany, were described as timely boosts to activity but not substitutes for structural reforms.