ECB’s Escrivá: Some of the Worst-Case Scenarios Are Materialising

9 April 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member José Luis Escrivá said that some of the worst-case scenarios that had been identified were already materialising.

In an interview with the FT, Escrivá, who heads the Banco de España, said that US tariffs were triggering a ‘very significant negative shock on economic activity’.

The precise impact of trade tensions was ‘still uncertain’, but the ECB was ‘monitoring it closely’, he said.

These policies could potentially call into question the US dollar’s status as a reserve currency and safe haven, according to Escrivá.

‘Economic agents and authorities everywhere are now reassessing what the latest US policies mean for many of those elements, and there are reasons to doubt that some of them will continue to play such a relevant global role in the future’, he said.

In the meantime, Europe could offer ‘a very large economic area and a solid currency’, he said.

Markets were functioning in an ‘orderly’ manner for now, he said, which confirmed the ‘impression that the system is far more resilient than it used to be.’