{"id":38409,"date":"2025-11-21T09:17:01","date_gmt":"2025-11-21T09:17:01","guid":{"rendered":"https:\/\/financialrush.com\/?p=38409"},"modified":"2025-11-21T09:17:01","modified_gmt":"2025-11-21T09:17:01","slug":"christine-lagarde-warns-european-growth-is-linked-to-disappearing-world","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=38409","title":{"rendered":"Christine Lagarde warns European growth is linked to \u2018disappearing\u2019 world"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Simply sign up to the <!-- -->Eurozone economy<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=3054af60-228d-4a7b-b28e-7b7470d16453&amp;concept-id=248d873c-6689-4764-bede-cab061889217\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Europe\u2019s economic prosperity is \u201cgeared towards a world that is gradually disappearing\u201d, Christine Lagarde said on Friday, imploring the bloc\u2019s policymakers to finally overcome \u201cyears of inaction\u201d.<\/p>\n<p>In a scathing speech, the president of the European Central Bank warned that Europe\u2019s \u201cold growth model\u201d had become outdated, as its dependence on exports had become a \u201cvulnerability\u201d.<\/p>\n<p>Making the keynote address at the European Banking Congress in Frankfurt, <a href=\"https:\/\/www.ft.com\/stream\/69c34f58-5ddf-4e89-97cb-86bf48511711\" title=\"\" data-trackable=\"link\">Lagarde<\/a> 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<p>\u201cIn reality, they have not grown at all,\u201d she said.<\/p>\n<p>Without directly mentioning Germany, she said that \u201ccountries with large manufacturing sectors\u201d had faced \u201ca prolonged slump in industrial production\u201d. In Germany, the bloc\u2019s largest economy, manufacturing output fell to 2005 levels over the summer, <a href=\"https:\/\/www.ft.com\/content\/239eed1b-a268-42ec-861e-fc3047f47c32\" title=\"\" data-trackable=\"link\">with carmakers and the wider engineering sector falling into crisis<\/a>.<\/p>\n<p>Lagarde urged 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<p>Across the Euro area, growth this year has been slightly stronger than central bankers and most analysts expected. In the third quarter, GDP grew at twice the expected pace as French output expanded at its fastest rate since 2023.<\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title o3-type-body-highlight\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image js-teaser\" data-id=\"7415ec5e-1559-47f7-bba6-068ff55bdc84\">\n<div class=\"o-teaser__image-container js-teaser-image-container\"><a href=\"https:\/\/www.ft.com\/content\/7415ec5e-1559-47f7-bba6-068ff55bdc84\" data-trackable=\"image-link\" data-trackable-context-story-link=\"image-link\" tabindex=\"-1\" aria-hidden=\"true\"><\/p>\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:2289\/1287\"><\/div>\n<p><\/a><\/div>\n<\/div>\n<\/aside>\n<p>After a series of eight cuts in interest rates since mid-2024, which halved borrowing costs to 2 per cent, the <a href=\"https:\/\/www.ft.com\/stream\/60da3242-e372-44d6-8b46-b497ef106d88\" title=\"\" data-trackable=\"link\">ECB<\/a> has kept monetary policy unchanged since June.<\/p>\n<p>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<p>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 \u2014 and lost growth \u2014 would not just be disappointing. It would be irresponsible,\u201d she said.<\/p>\n<p>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.<\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/3054af60-228d-4a7b-b28e-7b7470d16453\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Stay informed with free updates Simply sign up to the Eurozone economy myFT Digest &#8212; delivered directly to&hellip;\n","protected":false},"author":6,"featured_media":38410,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-38409","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/38409","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38409"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/38409\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/38410"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}