ECB’s Stournaras: Tariffs to Lead to Weaker Growth in Europe

5 September 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras on Friday said that the US was making a major error in imposing tariffs on trade partners and that weaker growth in Europe would be one consequence.

In an interview with Greek business newspaper Imerisia, Stournaras, who heads the Bank of Greece, said that “it is a very important mistake on the part of the United States to want to impose tariffs.”

History and theory clearly showed tariffs to be ineffective, with the possible exception of the period 125 years ago when some nations sought to protect infant industries, he said.

“Today, however, it is absurd for the world champion of technology to have tariffs,” he said. “This creates a big problem, especially in America itself but also in the rest of the world. In America it will be expressed mainly by stagflation, while in Europe and the rest of the world that accepts the tariffs, I would say with weak economic growth.”

Europe had essentially “retreated” by not retaliating in the interest of “stability to protect European businesses and households,” he said.

Though “not optimal”, the trade deal reached with the US would not harm Greece much, given limited Greek exports to the US, he said.

“Of course, it will affect it indirectly because we have tourism, we have shipping and this is greatly influenced by global developments,” he said.

The Greek economy was doing well, Stournaras said.

“In an international environment full of uncertainty, it has the third highest rate of economic growth in Europe,” he said. “It is reducing its public debt by 10pp this year. The banks are doing well. There are no financial stability problems like we used to have, so we are doing well.”

Relatively high Greek economic growth was sustainable, he said.