Germany and France join forces to combat “Trump effect”

The president of the German central bank, the Bundesbank, and the governor of the Bank of France are calling for a union of forces and the recovery of the Franco-German axis, to nullify the effects of the new Trump administration.

In a set read this Friday at the European Banking Congress, in Frankfurt, those responsible for the central banks of Germany and France ensured that changes in US economic policy – ​​with the recent appointment of Donald Trump – will do increase the challenges for Europe.

Joachim Nagel and François Villeroy de Galhau highlighted the negative effects of protectionism on price stability and growth and that a more relaxed fiscal policy could increase long-term interest rates.

In this context, they point out that the Franco-German dialogue is “more necessary than ever”after having weakened in recent years due to the internal political instability of the two countries.

“It is true that our countries sometimes have different opinions in fields such as security, trade and energy, but the more threatening the world becomes, the more The most important thing is to resolve our differences and defend what unites us“, they stated.

In his intervention, German Joachim Nagel warned that the economic implications of Trump’s entry into the White House could go “far beyond the financial sphere”.

The French governor stated that, despite being a risk to the global economy, the Trump’s election could be seen as a way to carry out reforms in Europe.

The German official warned that Trump, with the imposition of tariffs as a way of reinforcing North American protectionism, could reignite “international conflicts and further harm the multilateral order”, as well as causing significant losses in the US gross domestic product (GDP). .

De Galhau pointed out that the BC is “very confident” that it will sustainably achieve the 2% inflation target and that this can be done sooner than expected.

Nagel scored that monitoring the European economy must be done meeting by meeting and avoid speculating on future economic policy steps.