There commercial war Between the USA and the EU it will have a evident impact on the Economy of the Eurozone and throws a shadow of uncertainty about future prospects and on those that the ECB can or have to do in the near future. This is what the President Christine Lagardein an audition to the Economy and Monetary Affairs Commission of the European Parliament, today in conjunction with the publication of the usual monthly bulletin of the Eurotower.
Lagarde warns: half point impact on GDP and inflation
The president of the ECB explained that a commercial war with the United States would cost about half a percentage point of growth and would cause half an inflation point more. “ECB analyzes suggest that U.S. duties at 25% on imports from Europe they would lower the economic growth of the euro area of about 0.3 points percentages in the first year, “explained Lagarde adding that European reprisals to USA duties would further increase this effect a half a percentage point“.
For the ECB, the bulk of the impact It would focus in the first yearafter the adoption of the duties, and then decrease over time. At the same time, the inflation prospects “would become much more uncertain”, but “reprisals and the weakening of the euro” would translate into a lower demand for European goods, in the short term, and in a Increase in the half -point percentage point inflation. “This effect would ease in the medium term”.
In case of a commercial war, the ECB believes that a Increase in the Etrse Mario With the rest of the world it could more than counterbalance the losses From duties and “only the countries that were oriented to isolationist policies would be destined to lose”. “The response to the current changes in the United States policies should be more integration,” he reiterated.
Lagarde then addressed the theme of monetary policyremembering that it is guided by price stability, but inflation will not prevent Eurotower from pursuing its mandate, led by the motto “Whatever it Takes” launched by Draghi.
ECE ready to face uncertainty with flexibility
The ECB for now does not change setting and, confirming a expansive policymaintains extremely setting flexible and anchored to data macroeconomic. This was confirmed by the monthly eurotower bulletin.
At the meeting of March 6, 2025, the Board of Directors decided to reduce the three Rates of the ECB reference rates by 25 basis points. The decision – underlines – was based on the updated evaluation of the inflation prospects, the dynamics of the underlying inflation and the intensity of the transmission of monetary policy “.
The Board of Directors is “determined to ensure that inflation stabilizes durably on the goal of the 2 percent in the medium term“And, given the uncertainty that characterizes the current scenario, confirms that a” approach guided by data “will follow, according to which the decisions will be defined as” from time to time “.
Inflation in line with target: Motto Draghi is back
In particular, the Interest races decisions will be based on evaluation of “inflation prospects”. The bulletin also indicates that the latest predictions of the ECB staff were slightly upward magazinesas a result of the increase in the price of energy, but the experts report that the cross -country inflation continues to decrease, in a context in which the pressure on labor costs are loosened, and that longer term inflation continues to place themselves mainly around the 2 percent target.
The Board of Directors “does not intend to bind yourself to a particular route of the rates “and it is said”ready to adapt all the tools he has As part of its mandate to ensure that inflation stabilizes durablely on its medium -term objective and to preserve the orderly functioning of the mechanism of transmission of monetary policy “.
