Eurozone News
LAST UPDATE: June 11, 2025
Trade war resolution may require concessions from all, ECB’s Lagarde says
ECB President Christine Lagarde stated that resolving global trade tensions would require compromise by all major economies.
Insight
Her remarks stress the need for multilateral cooperation to avoid a deeper fragmentation of the global trading system. Lagarde linked prolonged trade frictions to rising inflation volatility and slowing growth. She emphasized that central banks cannot alone solve trade-related disruptions. The message calls for a shift from protectionism toward collaborative solutions through global institutions like the WTO and IMF.
Being a Bully on Trade Won’t Work Longer Term, Lagarde Warns
ECB’s Christine Lagarde warned that coercive or aggressive trade tactics are unsustainable in the long term.
Insight
Her critique of transactional diplomacy targets tariff-driven policies promoted by the Trump administration. Lagarde argued such tactics invite retaliation and disrupt supply chains, causing unintended inflationary consequences. The speech reinforces the ECB’s support for stable, rule-based international trade. It also strengthens the call for greater alignment between fiscal and monetary frameworks in trade disputes.
ECB’s Wage Tracker Signals Pay Growth Will Plunge This Year
The ECB’s internal wage tracker shows a sharp projected drop in eurozone pay growth in 2025.
Insight
Falling wage growth could alleviate inflation pressure, enabling the ECB to maintain or lower rates. However, weaker wages may slow consumption, pressuring economic activity. The divergence between employment gains and stagnant pay suggests slack remains in the labor market. This dynamic complicates forward guidance and risks entrenching lower inflation expectations.
ECB Can Wait Until September to Even Discuss Next Rate Move, Vujcic Says
ECB policymaker Boris Vujčić said discussions on further rate cuts can be postponed until after the summer.
Insight
Vujčić’s comment reflects a cautious and data-dependent stance in ECB policymaking. His timeline implies that the June rate cut was sufficient for now, barring economic shocks. This signals a shift toward stability and reinforces ECB’s intention to proceed incrementally. Market participants may recalibrate expectations for near-term monetary easing, awaiting wage and inflation data in Q3.
ECB’s latest rate cut will help inflation back to 2%, Lane says
ECB Chief Economist Philip Lane stated that the central bank’s latest rate cut will help inflation return to its 2% target by preventing a prolonged dip below.
Insight
Lane’s comments underline the ECB’s data-driven strategy, aiming to reinforce the view that the recent rate cut is not the start of aggressive easing but part of a finely calibrated response to mild deflationary risks. By mitigating persistent inflation undershoots, the ECB aims to maintain credibility and avoid creating a deflationary cycle (reuters.com).
ECB’s Kazaks says some fine‑tuning rate cuts ‘quite likely’
ECB’s Martins Kazaks said that future rate cuts would likely be small “fine-tuning” moves, assuming inflation continues near the 2% target.
Insight
His remarks suggest the ECB is approaching a pause in its rate-cut cycle, signaling readiness to make minor adjustments but ruling out broad cuts. This measured approach reflects confidence in hitting the inflation target while preserving policy flexibility amid trade and growth uncertainties .
