ECB President Christine Lagarde said in an interview that “both within the euro area and globally, the biggest threat is a downturn in trade resulting from a range of uncertainties, primarily affecting manufacturing and hampering investment. his range of uncertainties, in addition to geopolitical risks and issues relating to climate change, includes ongoing trade tensions and Brexit.”
Also, the biggest challenge surrounding Brexit is “yet to come”. That is the issue of reaching a EU-UK trade deal within the 11-month transition period. She added, “the economic and financial impact of Brexit will depend on the details of that agreement – if indeed one can be reached – during that short period of time.”
On European policy, Lagarde said there are “three elements” to the policy mix: monetary policy, fiscal policy and structural reforms. Greater cooperation between competent authorities, without infringing on the independence of their roles, would make it possible to optimise the multiplier effects of their decisions.
