Customs dispute
ECB President wants stronger euros than response to Trump
Donald Trump’s erratic policy keeps the world in suspense. ECB President Lagarde sees considerable risks to the economy in the customs dispute – and wants to use the turbulence as an opportunity.
ECB President Christine Lagarde sees a great economic threat to the USA with the USA and advocates a stronger euro. The world order that has existed for decades is currently “shaken to its foundations,” said Lagarde in a speech at the Hertie School in Berlin.
“In the place of multilateral cooperation, zeroummenschen and bilateral power games have taken,” she criticized, without the US President Donald Trump and his latest customs threat to the EU. “Now it says: Protectionism instead of openness”.
Even the supremacy of the dollar as the cornerstone of the system prevails. This turning point could recover risks for Europe, where exports almost made a fifth of the value creation and secured 30 million jobs.
Lagarde: stronger euro opportunity for Europe
At the same time, new opportunities arose, said Lagarde. “In view of the current change, the time seems to be ripe for a greater international role of the euro.” Around 20 percent of foreign exchange reserves worldwide would be kept in euros, $ 58 percent. Since Trump announced his global customs package, the dollar has been under pressure. The euro is as strong compared to the dollar than in over three years.
“A strengthening of the international role of the euro can have a positive effect on the euro area,” said Lagarde. So loans in the EU could become cheaper, which is based on internal demand. In addition, exchange rate fluctuations would then have fewer consequences, since more trade in euros successes, and Europe is better immune to sanctions.
Needing needs on several levels
In order to strengthen the global status of the euro, Europe must become stronger on several levels: geopolitical, economical and legally. Europe needs more trade agreements and must catch up militarily, Lagarde demands. In addition, the EU should become a first -class goal for international capital by completing the internal market and deepening the capital market. Thirdly, Europe must “defend the rule of law and act as a political unity so that we can withstand pressure from outside”.
dpa
Source: Stern
