Europe’s economy is geared towards a disappearing world, says ECB’s Lagarde
Europe’s economy is “geared towards a world that is gradually disappearing”, according to a warning from Christine Lagarde that the EU needs reforms to spur growth.The president of the European Central Bank (ECB) said the EU’s dependence on international trade had left it vulnerable, as major partners had turned away from the trade that made the bloc’s exporters wealthy.Donald Trump has led a global turn towards protectionism and against globalisation, with steep tariffs imposed on almost every trading partner.At the same time, China has used its dominance of production of certain critical materials and products to exert pressure.Lagarde argued that Europe was vulnerable because of a “dependency on third countries for our security and the supply of critical raw materials”.
She cited China’s control of the supply of rare earth metals that are crucial in electric motors and wind turbines, as well as the “choke point” of power chips made by Nexperia in China that threatened to shut down production across the global car industry.Speaking at the European Banking Congress in Frankfurt, Germany, Lagarde said Europe had failed to address its own problems.Policymakers had instead allowed its weaknesses to “erode growth quietly, as each new shock nudges us onto a slightly lower trajectory”.“Our internal market has stood still, especially in the areas that will shape future growth, like digital technology and artificial intelligence, as well as the areas that will finance it, such as capital markets,” she said.Europe also faced a “vicious circle” of its own savers allocating money to US stocks, helping the American economy to advance faster than the EU and leaving “stagnating productivity at home and growing dependence on others”, she said.
Lagarde did highlight some European strengths as well, including a resilient labour market, increasing digital investment, and government spending, particularly on defence in response to Russia’s invasion of Ukraine, that has counteracted economic slowdown.Part of Lagarde’s prescription for recovery was lowering barriers to services and goods trade between EU countries.Those barriers are equivalent to a 100% tariff on services and 65% on goods, according to ECB analysis.Lowering those barriers to the same level as the Netherlands – a relatively open economy – would fully make up for the hit from US tariffs, she said.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionShe called for mutual recognition of regulated companies, allowing them to sell across Europe when authorised by any one country.
She also said the EU should adopt qualified majority voting on tax, preventing any single member state from vetoing changes.She argued that benefits would include allowing the harmonisation of VAT, making it easier for smaller European companies to gain access to the whole EU market without having to comply with 27 different tax regimes.
Your Guardian sport weekend: more Ashes drama, F1 in Vegas and the north London derby
Ashes series in Australia mostly unfold through the night for England’s followers at home, meaning keeping up with the series start to finish is strictly for the hardcore. For our Australian readers, though, you’ll be fine. In Perth play begins at 2.30am GMT/10.30am AWST and is scheduled to end at 9
England’s fab five bully Australia’s finest with faultless display of raw aggression | Simon Burnton
After freewheeling at increasing pace for 16 giddy months, the Ashes hypemobile had to run out of road. But instead of letting it come to a juddering halt, the 22 players somehow managed to conjure a fresh acceleration.It is implausible for something as anticipated as this not to produce disappointment, as anyone who follows England knows far too well. Those memories will have flooded miserably back when Zak Crawley nicked the sixth ball of the day to slip. His wicket marked the start of not only the sudden whoosh of optimism leaking from the English balloon, but of a day of 19 wickets, bowling of impeccable quality (with exceptions) and absurd entertainment
Alastair Cook and Becky Ives make best of TNT Sports’ shonky Ashes production | Barney Ronay
Presenter Ives was breezy, while Cook fronted everything like the last ceremonial horse of some dying cavalry unitYou know what they say. Never judge a pitch until both teams have batted really badly on it. You know what they say. Over here you bat long, bat hard, bat short, bat soft. You know what they say, the Ashes in Australia is all about a hybrid maverick production with a fan-first identity
Wounded Wallabies on brink of unwanted 67-year record as French test awaits
As recently as August, the Wallabies humiliated rugby’s No 1 side, back-to-back world champions South Africa, in Johannesburg. They then smashed the pride of the northern hemisphere, the British & Irish Lions, in Sydney. By going all-in and not settling for a draw with Argentina, they won that Test – and with it, a nation’s heart.“The Wallabies are back”, we proclaimed. And indeed they are – back in the doldrums
Golovkin to be elected World Boxing president and lead buildup to 2028 Olympics
The former world middleweight champion Gennady Golovkin is to be elected president of World Boxing and lead the sport as it heads towards the Los Angeles 2028 Olympics.Golovkin, who won Olympic silver in Athens in 2004 and went on to make the most world title defences in middleweight history, is the only presidential candidate approved by the sport’s independent vetting panel for Sunday’s election. As a result he will take charge of World Boxing, which became the governing body for amateur Olympic boxing this year.That role used to be held by the International Boxing Association but it was banished by the International Olympic Committee in 2023 after a series of judging, corruption and governance scandals.In his manifesto, the 43-year-old Golovkin, whose initial term runs until 2027, promised to restore trust in the sport and secure boxing’s long-term place in the Olympic programme, starting with Los Angeles 2028
Brydon Carse hails ‘relentless’ England pace attack after thrilling Ashes start
Brydon Carse hailed England’s pace attack after an extraordinary first day of the Ashes, when 19 wickets fell, ended with Australia nine down and 123 runs on the board.After winning the toss England were bowled out for 172, with Mitchell Starc outstanding in claiming seven for 58. But while Carse admitted their total was under par, he said the mood in the tourists’ dressing room – and that displayed by their captain, Ben Stokes – never dipped.“He was always positive, always full of enthusiasm and very simple messaging. That’s the way that he has always dealt with the side,” Carse said
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