European Central Bank president Christine Lagarde sounded the alarm about the structural weaknesses of the European economy in an interview with the French newspaper Le Monde.

According to the European official, the technological gap between Europe and the US may widen in the coming years due to the advent and development of artificial intelligence.

A gap which, as he mentions, is due to the complexity of the laws in force in Europe, the bureaucratic anchorages and the weaknesses of the European financial system.

Christine Lagarde is in favor of simplifying the legislative framework that exists in Europe regarding the development of artificial intelligence, noting that due to the complex European legislative framework, many European companies choose to relocate to the US.

He also notes that in the US there are mechanisms for activating pension funds, as well as other financial mechanisms that orient savers towards sectors of future economic growth.

To this end, he states that the unification of the European capital markets is necessary, noting that Europeans should limit their national sovereignty by making “the best they have public.”

Asked about the fact that from the European loan of 750 billion euros decided in 2020 only half of the money has been disbursed, Lagarde says that the same problem existed during the Greek crisis between 2010 and 2015 where the national administrations were not in a position to manage the funding that then existed. Something that, as he notes, is largely due to European bureaucratic anchorages.

Regarding the risk of increased protectionism in the US, in the event of Donald Trump’s victory, the European official, avoiding taking a position in favor of one or the other candidate, notes that in the event of a fragmentation of international trade, there could be a slowdown in international economic activity which could reach 9% of global GDP.

At the same time, however, he does not consider, under the current conditions, the return of recession in Europe in 2025 or 2026, nor the return of double-digit inflation, as happened two years ago, to be possible.

In conclusion, Christine Lagarde does not rule out a further reduction in European interest rates, while she does not consider, in the foreseeable future, the development of a payment system by the BRICS countries capable of bypassing the dollar.