the governor of the Bank of France calls on the EU to “muscle up” against Trump

François Villeroy de Galhau called on Europe to “get its act together” and stop “self-flagellation”. Otherwise, he believes that the EU could find itself “on the sidelines of the global economic match”

The governor of the Bank of France, François Villeroy de Galhau, called this Wednesday on Europeans to unite after the election of Donald Trump as president of the United States, in particular France and Germany, otherwise at the risk of remain “on the sidelines of the global economic match”.

“Europe must wake up,” declared François Villeroy de Galhau on France Inter. “This was true before the election of Donald Trump, but it is even more true today,” he added. “If I had to summarize the European road map, I would first say that Europe must recover. And let’s stop self-flagellation,” continued the governor.

“We have assets in Europe. (…) Europe must also come together” and “strengthen itself”, he developed, citing recommendations from the recent report by the former head of the Italian government Mario Draghi: “have more of a single market, mobilize our savings and simplify” too many and “too complicated” standards. “On the other hand, if we are separated, and in particular France and Germany, that means that we will remain sitting on the sidelines of the global economic match,” warned François Villeroy de Galhau.

“Strong uncertainties among entrepreneurs”

Concerning the French economy, the governor of the Bank of France estimated that “the landscape is neither black nor uniformly rosy”, stressing that “the economy confirms a certain resilience month after month”. However, he reported “strong uncertainties among entrepreneurs around the budgetary and tax debate in France, then now future American policy”.

While large industrial sectors, such as the automobile or chemicals industry, are announcing numerous job cuts, François Villeroy de Galhau has not expressed any significant concern for the job market. He predicted “a small rise in unemployment” due to the economic slowdown, to around 7.5% or 8%, before a decline “towards 7% (…) probably around the turning point of 2025-2026”. He stressed that the French economy had created some 2 million jobs over the past ten years.

On the price front, he estimated, “inflation will remain moderate” – it was 1.2% in October in France over one year, according to provisional figures from INSEE. “This also means that prices are now growing less quickly than wages and that we, at the (European, Editor’s note) Central Bank, will be able to lower interest rates,” he said. The decision will be made by the ECB Governing Council, which is due to meet on December 12, after three rate cuts decided since June.