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François Villeroy de Galhau fears “more protectionism”, “more inflation” and “less growth” under the Trump administration. He calls for a “European remobilization”, particularly in the area of savings.
Donald Trump’s victory “increases risks for the global economy”the Governor of the Banque de France, François Villeroy de Galhau, said on Wednesday, stressing the need for a “European remobilization. “I believe that the outcome of the US election increases both the risks for the global economy and the need for a European remobilization.”commented the governor at a conference in Lyon.
A Trump administration will “probably more protectionism”, “which means more inflation, at least in the United States, and a priori less growth everywhere in the world”.stressed the central banker. He also pointed to a likely higher US budget deficit and increased uncertainty, which could also weigh on growth. “The American election should be a wake-up call for Europe”. after “a long numbness”commented François Villeroy de Galhau, stressing that “Europe is approaching this new situation with obvious weaknesses”.whose “technological lag” and the “political division”.
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Being “more American
On Tuesday evening, at an event organized by insurer Axa, he had already called on Europeans to be “more American”. “more American”i.e. “knowing how to look at our assets and strengths, and not just our weaknesses”.. “We have strengths”he stressed, listing “our companies, “our financial resources” and “our talents and deploring the “tendency, in our media and political debate (…) to talk infinitely more about our weaknesses” than about our strengths.
Savings include “a very strong resource in Europe”. but which “several hundred billion per year” are invested outside the continent, and “largely” in the United States, he said. This was an 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 to mobilize Europeans’ private savings in favor of the real economy and thus facilitate investment, has been struggling to see the light of day for years within the European Union, not least because of differences of opinion between France and Germany on its modalities.