Europe can import desperate talent from Trump’s America, says Lagarde

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Following the election of Donald Trump, Europe may be able to attract “talent” from across the Atlantic, the president of the European Central Bank has called for the continent to become more aware of its economic strength.

Christine Lagarde says Europe needs to be better at keeping its talent and savings at home, while the new US administration’s decision to freeze funding for former President Joe Biden’s deflationary law could remove one of the incentives to invest in the US.

Without directly mentioning Trump, the French central bank indicated that some American residents may be attracted to Europe during the US inauguration.

We need to keep the talent at home. We have to keep the savings at home. “Perhaps it is not the time to import the few talents that are being dumped from the coast for one reason or another,” she said.

Lagarde’s speech came on the closing day of the World Economic Forum in Davos, where investors and executives highlighted the contrast between positive sentiment on the US economy and weak growth prospects in Europe.

Speaking alongside Lagarde, BlackRock CEO Larry Fink said he believed there was too much pessimism in Europe and that perhaps it was time to return to the continent.

Lagarde said that while the EU faces “existential risks”, this should be a wake-up call for leaders to take action to strengthen the union.

A positive scorecard for the eurozone included a relatively low general government deficit of 3 percent of GDP and a “strong belief” that inflation at 2.4 percent was more likely to moderate rather than reaccelerate.

Lagarde acknowledged that some executives are “not very good” about European prospects, but argued that the continent can respond to economic challenges if its leaders “really step up.”

Among the changes likely to benefit Europe, Trump’s decision to end funding under the Inflation Act has served as an important enticement for European companies looking to set up manufacturing projects in the US.

European politicians in Davos also argue that Trump’s promise to end trade barriers opens up an opportunity for the bloc to strengthen its relations with other countries around the world. According to Lagarde, Europeans learned after the Second World War that “you can’t go it alone” and instead sit at the table and cooperate.

“What is happening abroad is a challenge, but it is a great opportunity to look again and decide whether Europe is a key player,” Lagarde said. I would argue that he has the talent, and he has the potential and ambition.

Fink, despite the hope that the investment case for Europe has grown, Europe is a “myth” because the single market is incomplete, including financial services.

Lagarde disagreed. “Europe is not a myth. Not a basket case. It’s a great opportunity for transformation.”