ECB Vice-President Luis de Guindos struck a cautiously hopeful tone on Europe’s ability to manage rising global trade tensions, suggesting that markets tend to overreact in the short term but eventually recalibrate.
Speaking at an event in Spain, de Guindos noted that despite the sharp volatility triggered by the US tariff escalation, market liquidity remains intact.
Despite the pressure, de Guindos said he was “relatively optimistic” about Europe’s ability to weather the storm, calling the situation a “wake-up call” to pursue greater economic and military autonomy.
De Guindos stressed the importance of negotiating with the U.S. “with a cool head”.
Separately, Greek ECB Governing Council member Yannis Stournaras offered a more cautious view, warning that a renewed surge in inflation or rising inflation expectations could disrupt ECB’s path to monetary policy normalization.
“Tariffs imposed on one country’s imports would affect other countries participating in the global chains, even if no countermeasures were imposed,” Stournaras added.
