ECB Executive Board member Isabel Schnabel emphasized in a speech that while interest rate cuts could help “mitigate economic weakness”, they are not a cure-all for the deeper “structural crises” facing Eurozone.
She pointed to persistent issues such as high energy prices, declining competitiveness, and labor shortages, which continue to weigh on the region’s economic outlook.
Schnabel acknowledged the growing pressures facing Europe’s economy, particularly in light of Donald Trump’s return to the White House and his trade policies.
“The export-led growth model needs to be reconsidered in the face of this increasing geopolitical fragmentation,” she stated.
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