IMF’s Georgieva tells Europe to ‘get your act together’
As new rumors about a US-Europe trade war intensified on Tuesday, IMF Managing Director Kristalina Georgieva issued a stern warning to European leaders: “Take action.”
US President Donald Trump announced on Saturday that his eight European allies would face tariffs starting at 10% on February 1 and rising to 25% on June 1 if a deal is not reached that allows Washington to “buy” Greenland, a semi-autonomous territory that is part of Denmark.
Trump said the proposed tariffs would target Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands and Finland. European leaders oppose tariffs and call for more dialogue with US
On Tuesday, Trump also threatened to impose 200 percent tariffs on French wine and champagne following the impeachment of French President Emmanuel Macron. reported Reluctance to participate in the “Peace Board” in Gaza.
Speaking to CNBC’s Steve Sedgwick and Karen Tso at the World Economic Forum’s flagship conference in Davos, Switzerland, Georgieva urged policymakers to take a pragmatic approach to implementing country-specific tariffs — but acknowledged that Europe is not using its economic power to gain advantage on the global geopolitical stage.
“we exist [the] “The record has called on Europeans many times to complete the single market and focus on their own internal competitiveness,” he said. “Europe is lagging behind in terms of productivity. “Europe has lagged behind in enabling small companies to become giants, and this needs to change.”
He argued that there are four things European leaders must do to realize the continent’s economic potential: finalize the capital markets union, complete the energy union, make it easier for employers to source labor across the EU, and invest in research and innovation.
“Make Europe’s money work for Europe now, and 300 billion euros ($351.75 billion) of Europe’s savings will be in the United States,” Georgieva told CNBC. “This [also] It is impossible to compete with 27 different energy systems, [and] “If you cross the border from Germany to France, you cannot work there.”
“They know [they need to do] “But they’re a little slow to do that,” he added of the continent’s policymakers. “Europeans, if you’re watching, take action.”
‘A new and independent Europe’
There are European leaders He called Trump’s threats of new tariffs “unacceptable” and was reportedly considering countermeasures as France reportedly pressured the European Union to use its strongest economic counterthreat, known as the “Anti-Coercion Instrument”.
Europe can no longer rely on the old world order and must remain independent as geopolitical shocks continue, European Commission President Ursula von der Leyen said on Tuesday.
“If this change is permanent, Europe must also change permanently,” he said in his opening speech at the forum on Tuesday.
She said it was easy to be nostalgic about the old world order but that this was unhelpful, noting: “It is time to seize this opportunity and build a new independent Europe,” she said.
“This new Europe is already emerging,” he said.
Trump said Tuesday morning that he had agreed to meet with European officials in Davos to discuss Greenland targets.
On Monday, the IMF slightly raised its forecasts for the global economy, saying it expects global growth to reach 3.3% this year and 3.2% in 2027.
“One of the factors in the escalation is that the impact of the tariffs is muted. There was no end to end of the trade war, and it would be great if we continued that way,” Georgieva told CNBC on Tuesday. “This would be good for the world economy. It would be good for individual countries, too.”
Stating that countries will now calibrate the costs and benefits of action regarding trading instruments, Georgieva called on officials and market observers to “maintain a calm attitude”.
“A lot of people were very excited about tariffs last year, and many were predicting a recession,” he said. “It didn’t happen. Why didn’t it happen?” [it] to be? Because economic logic came into play.”
— CNBC’s Holly Ellyatt contributed to this report.
