Panel remarks by Christine Lagarde, President of the ECB, at the International Business Council of the World Economic Forum

Geneva, 19 August 2026

Europe’s post-war growth model rested on three mutually reinforcing pillars. Today, all three are weakening as the international environment changes.

The first pillar was expanding global trade.

Europe became one of the world’s most open economies – roughly twice as open to trade as the United States – and benefited greatly from globalisation.^[1] But expanding trade can no longer be taken for granted. Last year alone, more than 2,500 trade restrictions were implemented globally.^[2]

The second pillar was Europe’s strength in mid-tech manufacturing, supported in part by access to relatively cheap energy.

That advantage is also being eroded. China has been steadily moving up the value chain. The country now competes directly with the euro area in close to 40% of the sectors in which we have a comparative advantage, compared with…