Lagarde says Trump represents ‘a threat’ to Europe

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Donald Trump’s potential election as US president is “clearly a threat” to Europe judging by the policies in his first term in office, European Central Bank president Christine Lagarde has said.

Lagarde’s comments in an interview with France 2 on Thursday broke with the tradition for central bank bosses to steer clear of politics. However, her comments encapsulated the rising anxiety among European leaders about the prospect of a Trump victory in November’s election.

The ECB president said a return of Trump to the White House next year was likely to put the US at odds with Europe in several areas, including trade protectionism, military support for Nato and the fight against climate change.

“If we learn lessons from history, from looking at the way he led the first four years of his mandate, it is clearly a threat,” Lagarde said.

“It is enough to look at trade tariffs, the commitment to Nato, the fight against climate change,” she said, adding: “In these three areas alone, in the past, US interests were not aligned with those of Europe.”

Asked if Trump’s presidency could leave Europe alone in supporting Ukraine against Russia’s full-scale invasion, Lagarde said this was unlikely “because in the US Congress there are a number of elected members who are deeply hostile to Russia’s horrific war against Ukraine and who will continue to finance and support Ukraine”.

Lagarde, who was a minister in the French government before she became head of the IMF in 2011 and then ECB president, dismissed rumours that she might leave the ECB before her eight-year term expires in 2027 to rejoin politics.

Addressing a rumour that she had been asked to join the reshuffled French government as foreign minister, she said she would not leave the ECB when it was still in the middle of its battle against inflation “even to become Queen of Prussia”.

The 68-year-old said the “hardest and worst bit” of the recent inflation surge was over and that the next move by the ECB, barring a fresh shock, was likely to be a cut in interest rates — but she refused to say when that was likely to happen. 

She said the ECB was “in the process of winning the battle” against inflation, which has fallen from a eurozone record of 10.6 per cent in October 2022 to 2.9 per cent last month, but remains above the central bank’s target of 2 per cent.

Attacks by Houthi rebels on shipping in the Red Sea have caused many oil tankers and container ships to avoid the area and opt instead for a longer — and more costly — voyage around the Horn of Africa. Lagarde, speaking before reports of a potential military response by the US and UK on Thursday evening, said the situation for now “seems under control” and was unlikely to have a “major impact” on prices to the same extent as the supply bottlenecks during the Covid-19 pandemic.