ECB chief urges EU to unlock “untapped potential” of internal market

European Central Bank (ECB) President Christine Lagarde has urged Europe to intensify efforts to unlock the unused potential of its internal market, arguing that the message is even more urgent today than when she first delivered it in 2019, before Russia’s full-scale war on Ukraine and the second presidency of US President Donald Trump.

Speaking at the annual European Banking Congress in Frankfurt, Lagarde said the ECB estimates that internal barriers within the EU’s services and goods markets remain significant, amounting to the equivalent of tariffs of roughly 100 per cent and 65 per cent, respectively, Caliber.Az reports, citing Politico. 

Lagarde acknowledged that such barriers cannot be removed entirely but outlined three key steps she believes would strengthen the EU’s economic capacity. She called for an overhaul of EU governance that would see the bloc move toward qualified majority voting to prevent legislation from being blocked by individual national vetoes. 

She also urged the adoption of a pan-European “28th regime” for corporate law and the revival of the principle of mutual recognition to ensure the free movement of goods and services within the Single Market.

The ECB president also praised European policymakers for increasing investment in strategic sectors, citing progress in defense and infrastructure spending. 

“The fiscal packages now being implemented for defence and infrastructure – especially here in Germany – are coming at the right time for Europe and will have a measurable effect on growth,” she said.

By Sabina Mammadli