Lagarde Urges Global Efforts to Avert Economic Conflict
(MENAFN) In a thought-provoking address delivered in Beijing, European Central Bank (ECB) President Christine Lagarde underscored the pressing importance of continuous international collaboration to address intensifying trade frictions.
She warned that without such collective efforts, the global economic framework risks severe and shared disruption.
Speaking at an event hosted by the People’s Bank of China (PBoC), Lagarde stressed that "one-sided adjustments" have repeatedly failed to resolve international disputes.
According to a statement from the ECB, such approaches frequently result in unexpected and expensive repercussions.
Lagarde drew historical parallels, referencing the "tariff wars" that contributed to the Great Depression of 1929.
She cautioned that "coercive trade policies" are unlikely to offer lasting solutions to current global tensions. Instead, she proposed that achieving resolution might require all parties to "make concessions" to end the ongoing trade discord.
She also addressed the surge in government subsidies influencing global trade, noting that such measures have more than tripled since 2014.
While acknowledging China's significant role, Lagarde clarified that this trend extends beyond China, with many nations—particularly developing ones—adopting similar strategies.
Furthermore, Lagarde reflected on the profound transformation of the world economy in recent years, marked by rising trade disputes and a geopolitical environment that obstructs unified action.
Despite diminished motivations for collaboration, she warned that the "costs of failing to do so have now increased significantly," suggesting that the consequences of inaction are more serious than ever.
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