Lagarde also breaks with Trump: ‘We need a Plan B, or more. Trust has been eroded.’

Brussels – “We have reached a point where we must look to a Plan B, or multiple Plan Bs.” Little more needs to be said. The speech by European Central Bank President Christine Lagarde at the World Economic Forum in Davos could well end here. Her summary of this historic moment requires little explanation: the world has changed. Not irreversibly, but alternatives are needed while we wait to see if it will be possible to return to the old global order. 

Lagarde looks at the international context, which she sees as profoundly different. She reflects above all on how Donald Trump is interpreting the role of President of the United States, and cannot help but invite us to draw the appropriate conclusions. She offers her conclusions to the audience at the World Economic Forum: “I am not convinced that we should talk about a rupture” with the past, with long-standing allies, with the relationships forged so far, with the way politics is done. However, alternatives are needed because, as the European Union, “from an economic and business point of view, we are interdependent,” and this risks being a weakness. 

In effect, the ECB president is endorsing the work of European Commission President Ursula von der Leyen, who has understood the situation and sees the trade agreements with Mercosur and Mexico as tools to break this interdependence and to create the plan Bs needed. Lagarde also shares the approach of marginalizing Trump in the eyes of the American public, as von der Leyen has already done by drawing a distinction between society and the political class, and as French President Emmanuel Macron did when he said not to trust the occupant of the White House. However, the head of the ECB is keen to stress that she has “great confidence in and great affection for the American people.”

 However, it is necessary to move forward, look elsewhere, and change attitude towards long-standing partners. “I think trust has been eroded a little, perhaps a lot,” and this cannot be ignored. “However, our duty, in the spirit of dialogue, is certainly to rebuild what may have been compromised.”