Keynote speech by Christine Lagarde, President of the ECB, at the Bank of Finland’s 4th International Monetary Policy Conference

Helsinki, 30 September 2025

Here in Finland, the idea that economics cannot be separated from geopolitics is hardly new. During the early 1990s, as the Soviet Union collapsed, Finland lost more than 10% of its GDP when trade with its eastern neighbour suddenly evaporated.^[1]

Few countries know better the costs of ignoring geopolitical realities.

Today, the rest of Europe is facing a similar reckoning. We find ourselves in a new world – one where policymakers can no longer confine themselves to traditional economic and financial variables. Now, we must factor “geoeconomics” into our analyses.

The term was coined in 1990 by Edward Luttwak, who described geoeconomics as “the admixture of the logic of conflict with the methods of commerce”. It is not protectionism in the old sense of sheltering vulnerable industries. Instead, it is trade deployed as…