Lagarde urges European unity to counter geopolitical pressures

Addressing an audience at the Bode Museum, Lagarde outlined three distinct choices facing European policymakers amid rising geopolitical competition.

She dismissed the notion of accepting managed decline as a consumer of foreign technologies, warning that such dependency would erode Europe's social model.

Lagarde also rejected calls for individual member states to pursue separate national strategies, noting that middle powers must combine forces to resist outside pressure.

She cited former German Chancellor Konrad Adenauer, who argued that dispersed European forces count for little in world affairs.

To secure sovereignty, Lagarde stressed that Europe must scale up its collective strengths.

Lagarde highlighted key policy projects needed to reinforce autonomy, specifically pointing to the savings and investments union and the digital euro.

Channelling Europe's domestic savings into strategic investment remains essential to address structural vulnerabilities in energy markets and defence.

“In parallel, the digital euro will help preserve our monetary sovereignty in a world where we can no longer afford to depend so heavily on others,” Lagarde said.

She concluded by invoking Alexander von Humboldt's motto that difficult tasks are never impossible.