ECB Governing Council Member: Europe's Adherence to Old Economic Model is 'Naive'

On May 4, ECB Governing Council member Weidmann stated that Europe naively believes that the free economic model can survive in the global transformation driven by the United States. He pointed out that EU policymakers are still pursuing goals such as open markets and limited state aid, but these goals no longer reflect the geopolitical reality shaped by Trump’s ‘America First’ policy. ‘Trade openness and strict state aid rules are feasible in a rules-based world,’ Weidmann said. ‘But that world has disappeared, and if you cling too tightly to a world that is no longer there, you are being too naive.’ The core of his argument is that Europe has failed to internalize the fact that the global economy has moved away from a fair competitive environment. He noted that U.S. protectionist policies have reshaped this landscape. ‘The world has changed, and we cannot keep doing the same things, giving the same answers, when those issues have failed to some extent in the past.’ (Jinshi)