2024-11-06 19:33:00
By Le Figaro with AFP
Published
yesterday at 7:42 p.m.,
updated at 8:33 p.m.
François Villeroy de Galhau fears “more protectionism”, “more inflation” and “less growth” under the Trump administration. He calls for “European remobilization”, particularly in terms of savings.
Donald Trump’s victory “increases risks for the global economy”said Wednesday the governor of the Bank of France, François Villeroy de Galhau, emphasizing the need for “European remobilization”. “I believe that the result of the American election increases both the risks for the global economy and the need for European remobilization”commented the governor during a conference in Lyon.
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”underlined the central banker. He also noted a likely higher US budget deficit and increased uncertainty, which also risks weighing on growth. “The American election must sound the European awakening” After “a long numbness”commented François Villeroy de Galhau, emphasizing that “Europe is approaching this new situation with obvious weaknesses”whose “technological delay” and the “political division”.
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Why the election of Donald Trump is “not good news” for the French and European economy
Being “more American”
Tuesday evening, during an event organized by the insurer Axa, he had already called on Europeans to be “more Americans”that’s to say “know how to look at our assets and our strengths, and not just our weaknesses”. “We have strengths”he stressed, listing “our businesses”, “our financial resources” et «nos talents» and deploring the “tendency, in our media and political debate (…) to talk infinitely more about our weaknesses” only assets.
Savings constitute in particular “a very strong resource in Europe” but of which “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 “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 thus facilitate investments, has struggled to see the light of day for years within the European Union, due in particular to differences between France and Germany on its terms.
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**Interview with François Villeroy de Galhau, Governor of the Bank of France**
**Interviewer:** Thank you for joining us today, Mr. Villeroy de Galhau. Recent reports indicate that Donald Trump’s victory in the U.S. presidential election has ramifications for the global economy. Can you elaborate on what these risks entail?
**Villeroy de Galhau:** Thank you for having me. Yes, I believe Trump’s victory indeed increases risks for the global economy. Primarily, we are likely to see a rise in protectionist policies in the U.S., which could exacerbate inflation not just there, but globally. This scenario is complicated further by the potential for a larger U.S. budget deficit and heightened uncertainty, both of which can negatively impact overall growth worldwide.
**Interviewer:** You mentioned the idea of “European remobilization.” What should Europe do in response to these developments?
**Villeroy de Galhau:** The American election results should act as a wake-up call for Europe. We need to mobilize economically and politically. We must address our technological lag and political divisions to solidify our position in a changing global landscape. This means investing in innovation and improving our economic policies to withstand the challenges posed by a more protectionist U.S.
**Interviewer:** With inflation and potential economic strain looming, how can countries prepare for these changes?
**Villeroy de Galhau:** Countries must adopt a multifaceted approach—enhancing domestic production capabilities, diversifying supply chains, and advocating for open trade while preparing for turbulence. Additionally, unity in Europe is crucial; collectively, we can better navigate these risks than individually.
**Interviewer:** What message would you like to convey to European leaders in light of the recent election outcome?
**Villeroy de Galhau:** I urge European leaders to recognize the urgency of the situation. We need to overcome our ”long numbness” and respond proactively to protect our economies and citizens from the impending challenges posed by a Trump administration. It’s a call to action for vigilance, solidarity, and strategic planning.
**Interviewer:** Thank you, Mr. Villeroy de Galhau, for sharing your insights with us today.
**Villeroy de Galhau:** Thank you for having me. It’s crucial we stay focused on these issues.