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European Central Bank President Christine Lagarde has emphasized the importance of Europe’s strong domestic market and single market to counter potential Trump’s return to the White House. She stated that the best defense against Trump’s return is an attack, which would require a deep, single market.
The reelection of US President Joe Biden is expected to maintain the current status quo, while Trump’s nomination could reduce economic and political support. Lagarde suggested that Europe should invest more in its capital markets to fund investments, such as the green transition.
The possibility of Trump winning a second term in the White House has been a topic of discussion among political and business leaders in Switzerland. Trump has been critical of Europe’s economic dependence on the US, including within NATO. He has also expressed plans to withdraw US funding for Ukraine, which he considers a European issue.
Lagarde and German Finance Minister Christian Linder agreed that market investment is the best route for Europe to improve its self-sufficiency, especially in the face of hefty US subsidies for green projects.
Linder noted that Europe’s competitive disadvantage compared to the US is not subsidies but the function of its private capital market. He added that such investment would help Europe foster a stronger transatlantic relationship, particularly with more euroskeptic leadership on the other side of the pond.
