ECB’s Lagarde: Removing High Uncertainty Should Be Main Objective

22 May 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde said Thursday that lessening the uncertainty surrounding global trade should be the major objective of policymakers.

In an interview with Canadian Broadcasting Corporation during the G7 meetings of finance ministers and central bankers taking place in Canada, Lagarde said that ‘while it’s fairly obvious that international trade will never be the same again, it’s also pretty clear that there will be further negotiations, that there will be further movements on the part of all partners in the trade in order to probably reduce the major imbalances that we have at the moment and that we have had for a long time.’

The announcement of US tariffs on April 2 had ‘also launched a complete review of relationships, of trust, of diversification of sources and destination of both products and services’, she said.

Previously, global commerce had been characterised by ‘free-movement, open-market trade’, but this was now ‘clearly changing’, she said.

A reduction in uncertainty would be in the interest of everyone independent of the ultimate decision on tariffs, she said.

‘[W]hat we are seeing in our economies in Europe is a concern, an anxiety on the part of economic actors about the rules of the game, about the framework within which they will operate’, she said. ‘And as a result of that, their natural reaction is hold, freeze, wait, don’t invest, don’t lay off but don’t hire, either.’

This ‘standstill of our economies is necessarily bad news when it comes to growth, when it comes to jobs, when it comes to development of activities, innovation, productivity’, she said.

Removing uncertainty should thus be the dominant ‘collective objective’, followed by the attempt to flesh out the new system of trade, she said.