Iz nove publikacije, naročene s strani ECON komisije v evropskem parlamentu: Europe’s policy options in the face of Trump’s global economic reordering (marec 2025).

In this paper, we propose and analyse four scenarios of a second Trump administration’s economic policy and its impact on Europe, ranging all the way from moderate tariffs to full trade war, a full multilateral breakdown with the US leaving the IMF down to a more cooperative exchange rate realignment agreement. We assess two trade scenarios quantitatively and outline broader policy shocks and their economic consequences. Our findings highlight significant challenges for the ECB, requiring responses to trade disruptions, financial instability, and potential global economic reordering. We offer specific policy recommendations for the ECB to navigate these uncertainties.

Conslusions

Trump’s economic policies pose serious risks of trade and financial disruption. An escalating trade war, coupled with retaliatory measures and global exchange rate volatility, could severely impact the economic outlook. The ECB would be forced into uncharted territory, balancing inflationary pressures with slowing growth, creating difficult trade-offs and heightened uncertainty.

A period of economic turmoil could eventually lead to a new global economic agreement. If the crisis leads to international policy coordination, the EU may need to undertake major adjustments to its macroeconomic policy mix, including exchange rate strategy. In its 25-year history, neither the EU nor the ECB has negotiated such an agreement, meaning they would have to establish new policy coordination mechanisms and activate treaty provisions on exchange rate policy for the first time.

A worst-case scenario could see the collapse of the multilateral order, forcing Europe into a greater global financial role. If the US were to withdraw from the WTO and IMF, it could trigger a systemic shift akin to the breakdown of Bretton Woods in the 1970s. This would require European institutions to take on greater responsibility for global financial stability. The ECB, in particular, would need to expand its swap and repo operations, acting as a liquidity provider on a much broader scale, including to non-EU and non-bank actors.

The ECB must prepare for multiple economic and financial contingencies. The central bank will need to refine its inflation-targeting framework to account for external shocks, carefully calibrate its balance sheet reduction to avoid excessive financial tightening, and strengthen its financial backstops. It may also need to deepen coordination with EU fiscal authorities, particularly if a large-scale macroeconomic adjustment becomes necessary. In a scenario where the US politicises dollar liquidity or retreats from multilateral institutions, the ECB could face new responsibilities in stabilising global financial markets – requiring a strategic expansion of its crisis-management toolkit.

The ECB and European institutions must urgently prepare for these uncertain but increasingly probable scenarios.