Lagarde argued that Europe was vulnerable because of a dependency on third countries for our security and the supply of critical raw materials. She cited China's control of the supply of rare earth metals that are crucial in electric motors and wind turbines, as well as the choke point of power chips made by Nexperia in China that threatened to shut down production across the global car industry.
Its GDP growth rate of almost 3% in 2024 put it ahead of the overall EU rate of 1%, as well as the bloc's two largest economies France and Germany. France recorded a rate of 1.2% while Germany suffered a -0.2% contraction. The signs for 2025 are also positive. Poland recorded growth of 0.8% in the second quarter, the fifth best rate in the EU.
The launch of a 10-year eurobond by the European Commission on June 15, 2021, symbolized a shift in the EU's approach towards joint debt issuance and economic collaboration.
Trump's tariff threat of up to 30% on EU imports is projected to tip Europe into recession by late 2025, with analysts highlighting the heavy reliance of European exporters on the U.S. market, especially in key sectors like autos and pharmaceuticals.