Bluffing assertion dismissed by Trichet
Stepping Up Europe's Game in the U.S. Trade Tussle
Europe is squaring off against the U.S. in a high-stakes trade standoff. As former President of the European Central Bank, Jean-Claude Trichet says, it's crucial that Old World sticks up for itself. Here's his take on the situation, straight from Piazza Affari in Milan:
Hitting Back at U.S. Trade Policies - Europe's Play
"Europe's already a formidable force in commercial negotiations, given how competence is shared at the European level. This gives us a significant negotiating advantage. But let's not mince words: we've got to defend our interests with guts. So far, I think we've handled things pretty well. But there's more to the story..."
The Trade Dialogue - Tariffs and "Samarium"
"When folks discuss trade, they often focus on the goods trade deficit. But let's not forget that the U.S. enjoys a surplus in services. This calls for a more nuanced argument when negotiating with the Americans. In politics, perception is king, and the manufacturing sector is a sensitive issue for voters."
Digging Deeper into Services and Gathering Momentum
"If we want to make our case, we need to put our best foot forward and consider all our options. Yes, including the digital services sector. The American focus on manufactured goods is tied to domestic political dynamics, but we need a broader, more consistent approach."
The Elephant in the Room - Financial Risks
"Banks are strong and well-capitalized today, but it's the non-bank financial sector that's raising eyebrows. We're lagging behind when it comes to private equity funds, large capital managers that manage trillions of dollars. This discrepancy creates a potential time bomb."
Another Problem on the Horizon? You Bet!
"The international community is aware of the issue. The Basel committee is working on it, but progress has been slow. And there's another factor to consider."
Debt - The Ghost of Crises Past
"The world's total debt, including public and private sectors, is higher than before the Lehman Brothers crash. The turmoil of the past serves as a grim reminder that excessive debt remains a threat. That's why we can't let our guard down."
The Great Debate - Is Deglobalization a Reality or a Myth?
"Sure, let's set aside Trump's antics for a moment. Even without him, the idea of reining in excessive globalization has gained traction. The pandemic demonstrated the fragility of global supply chains, from medicine shortages to critical supply disruptions. Add ongoing geopolitical conflicts to the mix, and it's clear this slowdown in globalization is more than just a rhetorical shift."
The Path to a European Banking Union - One Step at a Time
"The EU remains a far cry from a unified banking market, despite creating the single market, internal market, and single currency. The European project was born to achieve the economies of scale enjoyed by the U.S., yet today we have a single market for cars, but not for banks. This is just plain absurd."
Waking Up to the New Reality - Time to Act
"It's high time we break down these barriers and create a true single banking market. And don't forget another crucial step: establishing a complete union of the capital markets. Let's be frank: Europe can't afford to drag its heels any longer."
- Europe's strength in business negotiations, bolstered by shared competence at the European level, is crucial in the face of escalating trade tensions, such as those with the U.S.
- In the ongoing debate about globalization, it's evident that Europe needs to address weaknesses in its non-bank financial sector, particularly private equity funds, to prevent potential financial risks and remain competitive in the general news landscape.
