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ECB's Lagarde says European economy needs 'deep review' to face new world order - Finance news and analysis from Global Banking & Finance Review
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ECB's Lagarde says European economy needs 'deep review' to face new world order

Published by Global Banking & Finance Review

Posted on January 21, 2026

1 min read

· Last updated: January 21, 2026

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European economies monetary policy financial markets

Lagarde Calls for Comprehensive Review of European Economy Amid New Global Order

Economic Review in the Context of Global Changes

PARIS, Jan 21 (Reuters) - The European economy needs a "deep review" to face "the dawn of a new international order", European Central Bank President Christine Lagarde told French radio RTL on Wednesday.

Impact of U.S. Tariffs on Europe

Lagarde said she only expected a slight inflationary effect from U.S. tariffs, with a stronger impact on Germany than on France, but she added European countries would be much stronger if they scrapped non-tariff trade barriers within the bloc.

Lagarde's Insights on Inflation

Trump vowed on Saturday to implement a wave of increasing tariffs from February 1 on EU members Denmark, Sweden, France, Germany, the Netherlands and Finland, along with Britain and Norway, until the U.S. is allowed to buy Greenland, a step major EU states decried as blackmail.

(Reporting by Inti Landauro and Alessandro Parodi, Editing by Dominique Vidalon)

Key Takeaways

  • Christine Lagarde calls for a deep review of the European economy.
  • The review is needed to adapt to a new international order.
  • Lagarde expects slight inflationary effects from US tariffs.
  • Germany is more impacted by tariffs than France.
  • Removing EU trade barriers could strengthen European countries.

Frequently Asked Questions

What is inflation?
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy running smoothly.
What is monetary policy?
Monetary policy is the process by which a central bank manages the supply of money, often targeting interest rates to achieve macroeconomic objectives such as controlling inflation and stabilizing currency.

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