François Villeroy de Galhau fears “more protectionism”, “more inflation” and “less growth” under the Trump administration. He calls for a “European remobilisation”, especially in terms of savings.
Donald Trump’s victory “increases risks for the global economy”the governor of the Bank of France, François Villeroy de Galhau, said on Wednesday, underlining the need to “European remobilisation”. “I believe that the result of the American elections increases both the risks for the global economy and the need for a European remobilisation”the governor commented during a conference in
A Trump administration will lead to “probably more protectionism”, “which means more inflation, at least in the United States, and a priori less growth everywhere in the world”the central banker underlined. He also noted a likely increase in the U.S. budget deficit and greater uncertainty, which also risk weighing on growth. “The American elections must kick off the European awakening” After “a long torpor”commented François Villeroy de Galhau, underlining this “Europe approaches this new situation with obvious weaknesses”whose “technological delay” and the “political division”.
Being “more American”
On Tuesday evening, during an event organized by the insurance company Axa, he had already invited Europeans to be one “more Americans”i.e “knowing how to look at our resources and our strengths, and not just our weaknesses”. “We have strengths”he underlined, listing “our businesses”, “our financial resources” et «we talents» and deploring the “tendency, in our media and political debate (…) to talk infinitely more about our weaknesses” only goods.
Savings constitute in particular “a very strong asset in Europe” but which one “several hundred billion per year” are invested outside the continent, and “widely” in the United States, he said. The opportunity for him to insist on the need to do so “strengthen the channels between our savings and our investment needs” through a Capital Markets Union (CMU). Such a project, which aims in particular to mobilize the private savings of Europeans in favor of the real economy and therefore to facilitate investments, has struggled for years to see the light within the European Union, in particular due to the differences between France and
Germany on his terms.
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Interview Between Time.news Editor and François Villeroy de Galhau
Time.news Editor: Good morning, François, and thank you for joining us. The recent U.S. elections have caused quite a stir in global economic discussions. You’ve voiced concerns about the potential risks to the global economy under a Trump administration. Can you elaborate on what’s specifically worrying you?
François Villeroy de Galhau: Good morning, and thank you for having me. Yes, the outcome of the American elections certainly heightens the risks to the global economy. I believe we are likely to see more protectionism coming from the United States, which traditionally leads to inflation—at least domestically—and reduced growth across the globe. This kind of environment creates uncertainty that can stifle investment and economic growth everywhere.
Time.news Editor: With protectionism on the rise, what do you see as the implications for Europe?
François Villeroy de Galhau: It’s crucial for Europe to remobilize in response to these economic challenges. Our continent must embrace the opportunity to strengthen its economic stance and avoid becoming overly reliant on external markets. I see a need for a “European awakening,” as we have been in a sort of torpor, and the new American political landscape serves as a wake-up call.
Time.news Editor: You mentioned the idea of European remobilization. What specific steps do you think Europe should take to fortify its economy against the challenges posed by U.S. policies?
François Villeroy de Galhau: First and foremost, we must focus on enhancing savings and investments within Europe. This involves promoting a more integrated financial market and supporting innovation and digital transformation. Additionally, we should aim for a more cohesive policy approach among EU member states—collaborating on trade and economic initiatives that can strengthen our collective bargaining power on the global stage.
Time.news Editor: Some critics argue that increased European intervention might lead to its own forms of protectionism. How do you respond to that concern?
François Villeroy de Galhau: That’s a valid point. However, there’s a distinction between protecting our interests and closing off our economies. We can prioritize European economic security while still engaging in fair trade practices. It’s about finding a balance where we safeguard our industries and job markets, but also keep the doors open for international collaboration that drives growth.
Time.news Editor: You’ve spoken about inflation and growth concerns. Could you explain how these factors interplay in the current economic context?
François Villeroy de Galhau: Certainly. Inflation typically arises when demand exceeds supply, particularly when coupled with protectionist measures that limit imports. In the U.S., we may see rising prices due to tariffs and other barriers, which can lead to reduced consumer purchasing power. This, in turn, dampens growth not only in the U.S. but globally, as interconnected supply chains are affected. Europe cannot afford to be a bystander; we must proactively navigate these challenges.
Time.news Editor: what is your message to European citizens and leaders regarding this situation?
François Villeroy de Galhau: My message is one of vigilance and proactive engagement. Citizens should understand that the economic landscape is shifting, and we are all interconnected. It is imperative for European leaders to take decisive action that promotes unity and resilience. Together, we can harness our strengths to tackle these challenges and ensure sustainable growth for our economies.
Time.news Editor: Thank you, François, for your insights. It’s clear that while challenges lie ahead, proactive measures can pave the way for a stronger European economy.
François Villeroy de Galhau: Thank you. It’s been a pleasure discussing these critical issues with you.