Vujčić urges deeper integration to protect Europe's openness
Cutting EU internal barriers by 2 percent could offset a projected 0.7 percentage point US tariff hit to euro area GDP over 2025-2027, said European Central Bank Vice-President Boris Vujčić. He urged deeper integration rather than retreating from global trade.
Fragmentation leaves investment exposed
Speaking at the Central Bank of Ireland's Financial System Conference in Dublin, Vujčić linked integration to shock absorption.
Markets and fiscal transfers absorb around 70 percent of US state-level output shocks, against 30 percent in the euro area; euro area capital markets absorb only 5-10 percent.
During COVID-19, exposed European firms with mainly domestic shareholders cut investment 20 percent more than internationally owned peers.
Upper-bound ECB estimates put internal trade barriers at tariff equivalents of 67 percent for goods and 95 percent for services.
Since 2014, equity frictions fell 12 percentage points within the euro area versus 25 with the US.
US venture capital funds invest six times as much as EU funds.
Banking union still lacks insurance
Vujčić backed Commissioner Albuquerque's savings and investments union agenda, covering banking and capital markets.
He called for European deposit insurance, consistent bank crisis management, harmonised creditor hierarchies and insolvency rules, and free movement of capital and liquidity within cross-border banking groups.
He also urged withholding-tax harmonisation.
The digital euro would reduce reliance on non-European retail payment providers; Pontes, launched in September, supports European wholesale digital payments infrastructure.
Openness needs shock absorbers
For Vujčić, retreating from trade concentrates rather than removes risk.
The EU imports 57 percent of its energy and almost all its oil and gas, making renewables and interconnections central to resilience.
His argument puts risk sharing, not national insulation, at the centre of Europe's response.