ECB lowers interest due to collective bargaining competition for the economy
ECB lowers interest due to collective bargaining competition for the economy
The European Central Bank (ECB) reduced its main zone by a quarter percent on Thursday to react to the growing trade conflicts that triggered a global trade war through the tariffs of US President Donald Trump.
economic prospects deteriorate
Although the 20 countries that use the euro have built up a “resilience compared to global shocks”, the “view for the (economic) growth has deteriorated due to the increasing trade conflicts,” the ECB explained in a message.
warnings of the consequences of tariffs
The central bank belongs to a number of global economic and financial players who warn that tariffs could put a strain on the economy and damage both large companies and normal consumers. Similar warnings have already been carried out by Rel = "nofollow" target = "_ blank" href = "https://www.cnn.com/2025/04/16/business/tatiffs-wto-global-trade-economy-intl/index.html"> World trade organization , US-Notenbank boss Jerome Powell and other
Christine Lagarde on investment -inhibiting factors
In a press conference, the President of the ECB, Christine Lagarde, commented: "Disruptions in international trade, tensions on the financial markets and geopolitical uncertainties put a strain on company investments. If consumers become more careful with regard to the future, they could reduce their expenses."
frequent interest reductions
The interest rate of the ECB to 2.25 %, which was expected widely, has been the seventh in the past twelve months.
economic effects of the trade war
Yael Selfin, chief economist at the consulting firm KPMG, explained that the trade war - characterized by a flood of tariffs, breaks, new tariffs and other delays - could lead to an oversupply of products because the trade fells into the stick. "The consequences of trade disorders could create a global abundance of industrial products that could push the prices for goods into deflationary areas," added Selfin.
US Federal Reserve keeps interest stable
In contrast to the ECB, the US Federal Reserve kept the interest stable at its last meeting in March, and the civil servants, including the chairman Jerome Powell, have indicated that the uncertainty in retail will leave the interest rates unchanged for a while.Donald Trump's criticism of Jerome Powell
On Wednesday, Powell said at a appearance in Chicago that Trump's measures represented "very fundamental changes in policy" and gave his significant warning about the effects of tariffs on the US economy, the largest in the world.
Support for Powell by Lagarde
Trump criticized the approach of the two central banks on Thursday by accusing Powell of not reducing interest rates. "Jerome Powell from the Fed, who is always too late and wrong, published a report yesterday that was another, typical, complete 'chaos'!" So Trump. "Powell's departure cannot come quickly enough!"
In her press conference on Thursday, however,Lagarde came behind Powell: "I have great respect for my valued colleague and friend Jay Powell." She emphasized that it was crucial that central banks remain regardless of state influence or interventions. She pointed out that every country that wants to join the euro zone must prove that it can maintain this independence both legally and in practice. "For us here, the independence of the central banks is fundamental," she said.
This story has been updated with further information and context.
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